Julián Rooney – President, British Chamber of Commerce, Argentina
Julián Rooney, president of the British Chamber of Commerce in Argentina, discusses the potential for bilateral trade as a consequence of recent political changes in Argentina, the role of British companies in the energy industry, and how the chamber helps British businesses take advantage of investment opportunities.
Could you please introduce to our international readers the main responsibilities and capabilities of the British Chamber?
We want to create a community where British and Argentinian companies find business synergies
The British Chamber of Commerce in Argentina connects businesses and companies through its comprehensive network of local British companies with operations in Argentina, British companies present in other Latin American countries, and local and international Argentinian companies. The main purpose is to be a platform of business development encouraging the relationship between them in order to take advantage of the existing investment opportunities in the Argentinian market.
We want to create a community where British and Argentinian companies find business synergies and increase the trade between the two countries through importing technology and equipment from UK, developing the support services to the different industries, and creating joint ventures between Argentinian and British companies.
The commercial balance between the two countries changed a lot between 2005 to 2014 as exports from Argentina grew from USD 436 million in 2005 to USD 972 million in 2014. Could you explain the reason for these numbers?
It is important to remember that these figures were computed in a totally different scenario where there were a lot of Argentinian international trade restrictions on importing and exporting operations. Since this international trade scenario has changed and now Argentina is more open to the international markets, I foresee a strong growth of business between UK and Argentina both in terms of imports and exports.
Nevertheless, I think there is still a long way to go and this is why the British Chamber of Commerce in Argentina (CCAB) is working hand in hand with the Argentinian Embassy in UK as well as with the British Embassy in Argentina and other institutions to continue advancing towards the development of the bilateral commercial activities.
We are also aligning our mission with provincial governments who are willing to attract investment and technology needed to increase the added value of the local activities, with focus on energy exploration and exploitation area, both in services and operations.
How have the business winds changed since the election of President Macri in December 2015?
As aforementioned, the current government has been strongly working towards the opening of Argentina to the international markets and, as a consequence, the investment scenario has changed drastically. As all the international trade restrictions that the former government put in place have disappeared, commercial activities have gained flexibility encouraging the entrance of new investments.
It has been an increase in the country’s attractiveness and therefore the number of British companies with operations in Argentina is increasing as well. Just to show you a fact of this trend, in the past we used to have two or three company visits per year and now we have this frequency every month.
It is worth to mention that this trend is really important for industries with long-term vision, such as oil and gas, where the payback of the investments is in 20 or more years because these changes are tailored to the present and future economic and social stability of the country.
Argentina is the second largest economy in South America and it still has a lot of potential to grow, partly as a result of the existing natural resources in its land, mainly energy resources.
Argentina has always had a tradition in the conventional oil and gas but with the recent discovery of Vaca Muerta, unconventional fields have gained a lot of interest within the British business community. Indeed, there is a lot of interest in exploration activities on the shale oil and gas run by British companies.
In my opinion the exploration activities in the oil and gas industry, especially in the unconventional field, will gain importance in coming years. The British Chamber has been closely involved in promoting these exploration activities in conventional or unconventional wells for the British companies during the last three years with the creation of the specific Energy Committee; however British oil and gas companies have been involved in this field for decades.
Through this specific Energy Committee we collaborate with the British and the Argentinian business community as well as with governments of the key oil and gas production provinces such as Neuquén or Chubut. I am proud to say that we have already received several visits from different British companies and we are also leveraging the success of this initiative through the Energy Industries Council (EIC) based in UK and UKTI.
Could you give our international readers some examples of British companies’ success stories within the Argentinian oil and gas industry?
We have leading companies such as BP, which owns 60 percent of Pan American Energy, and Shell. However, besides these two big players we have also small and medium sized British oil services companies that are performing really well in the Argentinian market.
Nevertheless, we are working towards the increase of success stories working in partnership with EIC and we expect to work with other specific chambers such as Aberdeen Chamber of Commerce in order to help the British companies to take advantage of the existing opportunities.
How have the British companies leveraged their oil and gas mature field technology to optimize conventional field exploitation in Argentina?
There are big similarities between the two economies regarding the conventional scenario as both of them are in the mature phase.
There are big similarities between the two economies regarding the conventional scenario as both of them are in the mature phase. Indeed, 80 percent of the oil and gas fields in Argentina are in their mature stage and the E&P companies with mature field operations are struggling to optimize its production but they need to keep exploiting them to maintain their level of oil and gas production.
In my opinion there is a big opportunity in this area as the British companies can find a lot of synergies between them and the E&P companies with operations in Argentina. There are also other big opportunities in the conventional field such as offshore operations (especially in the province of Tierra del Fuego).
Indeed, Aberdeen has a lot of expertise in both mature wells and offshore exploitation. Through the chamber we wish to foster the promotion of the investment opportunities related to the different types of conventional exploitation that Argentina offers in its territory.
Regarding unconventional hydrocarbons, what opportunities is Vaca Muerta offering to British companies and how is the chamber promoting these opportunities?
There are big opportunities in this field and the international oil and gas business community is aware of this new discovery and the big potential ahead. There are several British oil and gas services as well as British consulting firms with operations in the unconventional field.
The way we have been promoting these opportunities amongst the oil and gas business community is through the partnership that we are running with the different chambers (Argentinian Chamber of Commerce in London or Aberdeen Chamber of Commerce), EIC, UKTI, and the respective embassies of Argentina and Britain in both countries.
BP owns 60 percent of Pan American Energy, which is the second largest producer company in Argentina. What would you highlight about BP’s leadership in the development of the energy industry in Argentina?
BP’s leadership in the Argentinian oil and gas industry is conducted through its ownership of the 60 percent of Pan American Energy (PAE), which has 20 percent and 16 percent of the Argentinian market share of oil and gas respectively. These big figures position PAE as the largest private oil and gas producer company in Argentina.
The business of PAE in Argentina still has a lot of room to expand and besides having a strong presence in the conventional scenario they are also strongly investing in unconventional development, which is in the initial stage of its life cycle, in a similar way to other international companies.
In terms of performance, capability, and reputation, where would you like to take the British Chamber of Commerce in the next three years?
We have been following a strategic plan for the last three years in which we already predicted some of the current political and economic changes that have occurred. However, the changes have gone further and, therefore, we are setting a new strategic plan more in accordance with the current scenario and the future investment expectations.
I expect the Chamber to contribute to the business development of British companies in Argentina, fostering the entrance of British investments and the investments of Argentinian companies into the UK, and promoting a significant increase in trade both ways. In these regards, we are planning a road show in the UK scheduled in November of this year with the objective of promoting different areas of investment existing in Argentina, one of which is oil and gas.