12 October 2013 – Argentina is studying authorizing crude imports from Nigeria to help counter a long decline in oil and natural gas output that has hurt its trade balance, two newspapers reported on Saturday, both citing an anonymous source with knowledge of the matter.
South America’s No. 2 economy has tough import barriers and strict currency controls meant to stem capital flight, making it tricky for oil companies to meet their needs.
The floated import measure is designed to optimize refining and reduce diesel and gasoline purchases.
It would also bolster the trade surplus, a crucial source of foreign currency for a country virtually shut out of debt markets since its 2002 default.
The plan under analysis mulls establishing a quota system to permit imports of Nigerian Bonny Light crude oil, daily La Nacion reported.
Argentina, estimated to hold 802 trillion cubic feet of natural gas trapped in shale rock and 27 billion barrels of oil, hasn’t imported oil in two decades, according to pro-government Pagina 12.
But a government commission agreed to review a request made by oil companies including Argentina’s Oil Combustibles, whose owner Cristobal Lopez is seen as close to president Cristina Fernandez.
The imports would bolster output at Oil Combustibles and Royal Dutch Shell’s respective San Lorenzo and Dock Sud refineries, which currently operate below capacity, Pagina 12 said.
It was not immediately possible to contact the government for comment.
Leftist Fernandez says her administration’s policies seek to shore up the Argentina economy and peso after the debt crisis 11 years ago that pushed millions of middle-class Argentines into poverty.
*Jorge Otaola; Alexandra Ulmer; Doina Chiacu – Reuters