Robert Fry – Ambassador of Canada to Argentina & Paraguay
Robert Fry, ambassador of Canada to Argentina and Paraguay, discusses the potential for bilateral trade as a consequence of the latest political changes in Argentina, the role of Canadian companies in the energy industry, and how the embassy helps the Canadian business community take advantage of investment opportunities in Argentina.
You have been the ambassador of Canada to Argentina for over a year now. Could you give an overview to our international readers of the evolution of the relationship between the two countries?
Since the election of President Macri in December 2015, the government has undertaken several actions that have returned Argentina to international capital markets and increased trade attractiveness.
During the last three years trade between Canada and Argentina has stagnated and doing business in Argentina has been really tough. This situation has been caused by the economic limitations imposed by the former government, such as restrictions on taking profits out of Argentina, the artificially fixed currency, and import bureaucracy. As a consequence, several Canadian companies have closed their business in Argentina.
However, since the election of President Macri in December 2015, the government has undertaken several actions that have returned Argentina to international capital markets and increased trade attractiveness. These include the payment of sovereign bondholders and currency liberalization. The current government is following a model that Canada believes in and, through this model, Argentina should reassert itself as a trading country leveraging its natural resources and its huge variety of commodities.
Canadian companies are cooperating well with their Argentinian counterparts in nuclear energy, mining, oil and gas, and agriculture. For example, Canadian companies are the biggest investors in mining here, with over USD 13 billion of investments.
How would you describe the collaboration between Canadian and Argentinian companies?
Argentina is the second largest economy in South America and, in my opinion, has the potential to be much bigger. There are other countries within the region that are catching up with Argentina such as such as Chile or Colombia. The current trade between Argentina and Canada is around USD 2.2 billion with an Argentinian surplus of approximately USD 1.4 billion.
Argentinian and Canadian companies can really complement each other in the development of their businesses. Canadian companies are specialized in technology, services, and training. In the mining and oil and gas industries Canadian companies are really well recognized for their sustainable services. In nuclear energy, Canadian companies are providing Argentina with the technology needed to build nuclear reactors.
Expanding on the oil and gas area, Canada does not have any huge energy companies present in Argentina but there are several small and medium sized enterprises that are running their business really well in the territory. I am proud to say that Canadian companies have a presence in all stages of the oil and gas value chain such as well drilling, fracking, and pipe technology. Canadian companies are not necessarily that big in terms of size but are really well regarded in their field in terms of quality.
Argentinian oil and gas companies are building partnerships with their Canadian counterparts in order to develop technology and know-how. What is your perspective on the mutual benefits of these collaborations?
Canadian companies partner with local companies in order to build a win-win relationship. We are proud of the Canadian way of business and also looking to add value and create benefits for the Argentinian economy. Canadian oil and gas companies bring technology and share it with local partners in order to build and increase the industry’s capacity and capability. This praxis is being applied to oil and gas but also to other industries such as nuclear energy; the current Argentinian nuclear production and export capacity is due in part to partnerships with Canadian companies.
From the Canadian Embassy we push our companies to operate under this mindset of corporate social responsibility in which running the business is as important as adding value to the entire local community.
Neuquén represents the second largest unconventional reserves in the world; what are your thoughts on Canadian companies’ footprints there?
There are a lot of Canadian business interests in Neuquén as a result of the discovery of Vaca Muerta and the fact that the current subsidized price per barrel is higher than the international one, which makes the opportunity even more attractive for oil and gas investments.
When I had the pleasure to visit Neuquén in November 2015 and met the former and the current governor of the province, it really helped me to understand what is going on at the ground level and the oil and gas operations that are being carried out. I was really impressed with the infrastructure that the government and companies are developing there. It is quite obvious that there is a long road to travel in this regard, but they are advancing in the correct direction.
In addition, the government is highly involved and committed to the development of the Neuquén basin. During my visit we had a round table with all the Canadian companies with a presence in Neuquén such as Madalena, Calfrac, Crown Point, Packers Plus, Zenith Energy, Ensign and Enerflex, amongst others in order to discuss directly with the provincial government about the next steps to improve the business scenario, maintain the current players, and attract new ones.
I am proud to confirm that Canadian companies are running their business there in the most environmentally friendly way through their technology; a great example of this is Calfrac.
What is the Canadian embassy doing in order to help the Canadian companies take advantage of the big opportunities in this field?
As the Canadian ambassador, part of my job is tailored to the facilitation of Canadian companies’ business; helping them to interact with the other industry stakeholders. In addition, I also represent their interests when I meet the government and discuss with ministers such as Juan José Aranguren, national minister of energy, the challenges that companies like Madalena or Calfrac are facing and the road of development to travel.
I am also working to bring back those Canadian companies that left Argentina in the past as a consequence of the business environment. From my point of view, now is a great time to invest in Argentina; indeed, if companies wait much longer, the cost of investment will be much higher. Argentina has resources and the current government is working hard to attract investments to exploit them.
How do you foresee the role of Canadian companies evolving in the energy development of Argentina?
I am quite optimistic for the future as a result of the changes made since the election of the current government. Indeed, since December 2015 we have been receiving many more calls than in the past from companies that are interested in investing or developing their activities in Argentina; this is a fact.
In my opinion, bilateral trade is going to grow as a consequence of the political actions, the entrepreneurial spirit of Argentines, the industrial base and the huge wealth that Argentina has in its land. In the mid-term, Canadian companies will enter Argentina in order to take advantage in the traditional Canadian industries of mining, oil and gas, and agriculture; but also in industries that Canadian companies do not yet have a big footprint such as technology and renewable energies.
As mentioned previously, Argentina is the second largest economy in South America and has the potential to be even larger; therefore I foresee Buenos Aires becoming a hub for companies, not only Canadian ones, in the south of the continent.