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Energy SectorArgentina

April 2015



Table of Contents

I. Country Overview

1. Macroeconomic Indicators

2. Macroeconomic Forecasts

3. Energy Sector Highlights

4. Shale Development

5. Oil & Gas Rents as % of GDP

6. Primary Energy Consumption

7. Sector Forecasts

II. Oil Sector

1. Oil Sector Highlights

2. Proven Reserves of Crude Oil

3. Production & Consumption

4. Refining Capacity

III.Natural Gas Sector

1. Natural Gas Sector Highlights

2. Proven Reserves of Natural Gas

3. Natural Gas Production & Consumption

4. Natural Gas Imports & Exports

IV. Electricity Sector

1. Electricity Sector Highlights

2. Installed Power Capacities & Supply

3. Generation & Consumption

4. Final Consumption by Type

5. Low-Carbon Electricity Generation History

6. Renewable Energy – Capacities & Generation

V. Main Players

1. Top Oil and Natural Gas Producers

2. Yacimientos Petrolíferos Fiscales (YPF)

3. Pan American Energy (Sucursal Argentina) LLC

4. Petrobras Argentina S.A.

5. Companias Asociadas Petroleras SA - CAPEX SA



I. Country Overview



Source:

Comments

Macroeconomic Indicators

In Q3 2014, Argentina's economy suffered from a decline in exports (by 8.4% on annual basis), imports (by 15.2%) and private consumption (by 4.7%).

In early 2014, Argentina introduced a new inflation index, which measures prices nationwide. Prior to that, the index was based on Buenos Aires and the

surrounding metropolitan area, which was not deemed credible by IMF. Statistics for 2015 show a decrease of the inflation rate in annual terms: from 18%

in February to 16.5% in March.

Main Macroeconomic Indicators for Argentina

National Statistics & Census Institute, World Bank

Source 2009 2010 2011 2012 2013 2014

Population, million persons NSCI 40.13 40.79 41.26 41.73 42.20 42.67

GDP, current USD bn NSCI 378.04 462.35 558.60 605.72 621.04 538.53

GDP (constant 2004 ARS bn) NSCI 1,209.7 1,331.7 1,452.6 1,459.7 1,502.0 1,507.0

GDP Growth, % NSCI -0.48 10.08 9.08 0.49 2.90 0.33

Inflation (GDP Deflator), % WB 9.88 17.51 17.20 18.06 18.21 -

Oil rents, % of GDP WB 2.89 3.06 3.25 2.78 2.47 -

Annual average exchange rate, local/USD WB 3.71 3.90 4.11 4.54 5.46 8.08



Source:

Macroeconomic Forecasts

Real (2010) projected gross domestic product (bn USD)

Macroeconomic Forecasts for Argentina

Real Projected Gross Domestic Product Growth (%)

World Bank, IMF

2015f 2016f 2017f 2018f 2019f

GDP, current prices, USD bn 378.8 378.7 380.8 379.5 378.7

National currency per current international dollar, Implied PPP 5.2 6.3 7.8 9.5 11.8

Total investment, % of GDP 23.2 22.9 22.7 22.5 22.4

Volume of imports of goods and services, % change 1.4 3.0 2.5 2.7 3.0

Volume of exports of goods and services, % change 5.1 2.6 2.2 2.9 3.0

Unemployment rate, % of labor force 7.6 7.6 7.6 7.6 7.6

General government gross debt, % of GDP 58.2 55.3 55.8 54.7 54.2

Current account balance, bn USD -2.01 -2.03 -2.07 -2.00 -1.82

517.6 531.2 548.2 567.4 588.7 610.8 633.7657.4

682.1707.7

734.2

2015f 2016f 2017f 2018f 2019f 2020f 2021f 2022f 2023f 2024f 2025f -0.20

2.63

3.213.50

3.75 3.75 3.75 3.75 3.75 3.75 3.75

2015f 2016f 2017f 2018f 2019f 2020f 2021f 2022f 2023f 2024f 2025f



Energy Sector Highlights

The electricity mix is dominated by thermal power. By the end of 2015, more than two-thirds of the electricity will be generated from oil-, gas- and

coal-fired power plants. Hydropower is the second-largest power source. The government has expressed ambitions to expand its nuclear industry,

indicating a national goal of 15-18% of nuclear power in the electricity mix by 2025. The country has potential to develop non-hydropower

renewables, especially wind, but current policies do not point to any significant growth in the sector.

According to a global assessment conducted by the U.S. Energy Information Administration in 2013, Argentina has the second-largest technically

recoverable shale gas reserves in the world (estimated at 22.7 trillion cubic metres) and the fourth-largest technically recoverable shale oil reserves

(27 billion barrels).

Even though Argentina is positioned among the most attractive countries in terms of the resource potential, the financial viability of these

investments and reserve recovery efforts will depend on the prevailing domestic economic and regulatory conditions, as well as on the international

market prices of hydrocarbon products.

Argentina relies heavily on natural gas and oil, which comprise 51% and 35% of the primary energy mix respectively.

The drop in oil prices in the end of 2014 relieved consumers in the country, but presented budgetary and investment challenges. The import and

refining capacities in Argentina are at their maximum, catching up with rising consumption. Oil and gas revenues in the state budget have

diminished significantly: in 2014, they accounted for about 3% of the budget revenues, as opposed to over 8% in 2008.

Unconventional shale oil and gas reserves have already attracted investors’ interest.

Overview

Shale Prospects

Power Sector

Source: BP, World Bank, EIA



Source:

Favorable Environment

Recent Investments in Shale Oil & Gas Development

Vaca Muerta Highlights

Reuters, BMI Research, Morgan Stanley, Company data

Company Year USD mn Terms

Chevron 2013 1,600 First phase shale oil and gas development, drilling 100 wells in two fields in Vaca Muerta

Petro AP 2010 500 Exploration (five years)

ExxonMobil 2010 250 Exploration in Vaca Muerta

Apache 2013 200 Drilling Vaca Muerta

Petrolera Pampa 2013 151 Development of tight gas in Rincon del Mangrullo block (Neuquen Province)

Shell Argentina 2013 500 Boosting Test Drilling in the Vaca Muerta

Dow 2013 120 16 shale gas wells in Vaca Muerta

Wintershall 2014 109 50/50 joint venture with Gas y Petroleo del Neuquen; exploration and drilling of up to six wells

Shale Development

• Legislative support: The recent reform of the Hydrocarbons Law is

expected to have a positive effect on the shale oil and gas sector by

providing more fiscal and regulatory stability for the investors. There

is a special type of concession explicitly for "unconventional

hydrocarbon exploitation" with improved permitting terms.

• Easy geography: The Vaca Muerta field is located in an area where

associated infrastructure for development and transportation of

hydrocarbons is already available. Water stress in the region is low.

The surface is relatively flat. This is beneficial for drilling efficiency

and development costs.

• According to Morgan Stanley estimates, shale production costs per

barrel of oil equivalent from the Vaca Muerta formation are USD 85.

Only US production prices are lower.

• With over 250 wells drilled in Loma Campana, costs have been

reduced significantly, from USD 11 million to USD 7 million per well.

• YPF is working on lowering drilling costs, with potential to reach a

range of USD 4-7 million. Main drivers of cost reduction are the

increasing scale (400 producer wells by year-end 2015), switch to

‘walking’ rigs to improve drilling efficiency, and acquisition of sand

mines to replace expensive sand imports.



Comments

Source:

Oil & Gas Rents as % of GDP

Oil rents are a function of production output, international oil prices, and production costs. On the one hand, oil and natural gas production is has been

decreasing, oil prices have been falling. On the other hand, production costs are either stable for conventional exploration, or still high for unconventional

exploration.

Argentina Oil & Gas Rents, % of GDP Crude Oil Reserves Long-Term Forecast, mn bbl

EMIS Insight estimate, World Bank, BMI Research estimate

2,984.00

3,021.10

3,053.50

3,100.503,091.90

2019 2020 2021 2022 2023

3.4

1.51.1 0.9 0.7 0.7 0.4

4.8

2.93.1 3.3

2.8 2.52.5

2008 2009 2010 2011 2012 2013 2014

Oil rents (% of GDP) Natural gas rents (% of GDP)



Comments

Source:

Primary Energy Consumption

Per capita energy consumption in Argentina is second largest in Latin America after Venezuela. The energy mix of the country relies heavily on oil and gas

for respectively 35% and 51% of the primary energy mix. Hydropower is the main source of renewable energy.

The energy sector in Argentina is regulated by the Ministry of Federal Planning, Public Investment, and Services.

Primary Energy Consumption by Fuel, 2013 Energy Use Indicators, 2013

BP Statistical Review, World Bank

Energy use, mn toe 84.5

Energy use per capita, toe 2.04

Fossil fuel energy consumption, % 73.3%

Share of oil imported, % 12%

Energy imports (net importer), % 3.6%

CO2 emissions, total mn t 194.5Oil

34.8%

Coal0.8%

Natural gas51.1%

Nuclear1.7%

Hydropower10.9%

Renewables0.8%

Total: 84.5 mn toe



Source:

Sector Forecasts

Oil Sector Forecasts

Conventional oil fields are maturing, which puts pressure

on oil and natural gas imports.

Moderate forecasts for oil production growth may be

revisited in view of shale oil exploration and development.

Net exports of crude oil will increase gradually as

production in unconventional oil plays expands.

Argentina will maintain its position as a net importer of

refined petroleum products, as refining capacities are at

their maximum, and macroeconomic growth is expected

to drive consumption at a rate faster than projected

upstream development.

Increasing investments in the Vaca Muerta field will boost

natural gas production and decrease import demand,

nonetheless the gas trade deficit will not be overcome in

the next years.

Natural Gas Sector Forecasts

Comments

BMI Research, YPF

2015f 2016f 2017f 2018f 2019f

Crude oil reserves, mn bbl 2,801 2,851 2,899 2,943 2,984

Crude, NGPL & other liquids production,

thou bpd704.9 713 722.4 733 744.9

Crude & other liquids net export,

thou bpd175.4 175.6 176.9 179.4 180.2

Crude oil refining capacity, utilisation % 84.0 85.2 86.5 87.8 89.6

Refined petroleum products production,

thou bpd585.9 595.5 605.3 615.2 628.1

Motor gasoline consumption, thou bpd 199.1 202.0 208.1 213.3 218.6

2015f 2016f 2017f 2018f 2019f

Natural gas reserves,

bn cub m313.6 332.9 371.0 408.1 444.0

Natural gas reserves to production ratio,

years7.9 8.2 8.9 9.5 10.1

Dry natural gas consumption,

bn cub m46.8 47.9 49.3 50.7 52.3

Dry natural gas net exports,

bn cub m-9.9 -10.0 -10.0 -10.0 -9.9

LNG net exports,

bn cub m-3.8 -3.9 -4.0 -4.3 -4.9



II. Oil Sector



Oil Sector Highlights

The development of crude oil and natural gas resources in Argentina includes conventional onshore and offshore resources, as well as

unconventional shale plays. Offshore development has been slowed down, as ENARSA – the state company that own all offshore resources – does

not have enough financial and technical resources to develop them alone. The current low oil prices are also a factor to postpone shale oil and gas

development, as the cost of oil production in the Vaca Muerta formation is estimated at USD 80-85 per barrel.

Development

Reserves

Hydrocarbon Commission

Legislative Changes

The proven oil reserves of Argentina were estimated at 2.8 billion barrels in 2013, and the technically recoverable shale oil reserves were estimated

at 27 billion barrels. One of the most important deposits is the Vaca Muerta field, which requires significant investment in development. According

to officials of YPF, the largest state energy company, developing 15% of Vaca Muerta would be sufficient to stop the need for energy imports. A

number of foreign companies have already invested in exploration and test drilling.

The Hydrocarbons Commission was founded in 2012 to address market asymmetries in the oil and gas sector, to encourage new exploration and

production activities onshore and offshore, to expand oil refining capabilities, as well as to maintain adequate supply of fuel at reasonable prices. The

Commission determines the reference prices for oil and gas. All companies in the sector must be registered in the National Hydrocarbons

Investments Registry and must submit an annual investment plan for approval by the Commission.

In October 2014, the Argentine government approved amendments to the 1967 Hydrocarbons Law, which is designed to attract private investment in

the development of unconventional oil and gas resources and offshore deposits. The most important changes are: shortening the duration of

exploration permits, providing export tax reliefs for concessionaires that invest more than USD 250 million over a three-year period, and restricting

provincial governments from imposing new taxes. The exploitation period under a concession has been extended to 25 years for onshore

conventional sources, 30 years for offshore resources, and 35 years for unconventional oil and gas.



Source:

Proven Reserves of Crude Oil

Proven Reserves of Crude Oil by Basins, 2009-2013, mn bbl

Ministry of Federal Planning, Public Investment and Services

2009 2010 2011 2012 2013

Total for Argentina 2,511.5 2,524.2 2,478.2 2,354.2 2,333.9

Noroeste, including: 45.9 39.7 32.2 29.4 28.7

Salta 39.1 32.1 24.3 23.4 23.4

Jujuy 1.0 1.0 1.4 0.8 0.7

Formosa 5.7 6.6 6.5 5.2 4.7

Cuyana, including: 211.4 211.0 207.9 150.4 141.4

Mendoza Norte 211.4 211.0 207.9 150.4 141.4

Neuquina, including: 631.0 592.8 534.1 510.9 494.4

Mendoza Sur 127.5 113.9 116.5 105.7 100.6

Neuquén 335.0 301.2 263.3 255.0 262.0

Río Negro 105.8 61.9 61.7 89.6 72.7

La Pampa 62.7 115.9 92.6 60.7 59.0

Golfo San Jorge, including: 1,537.4 1,596.1 1,622.6 1,583.9 1,584.1

Chubut 1,082.6 1,101.0 1,092.3 1,057.1 1,052.7

Santa Cruz Norte 454.8 495.0 530.2 526.8 531.5

Austral, including: 85.8 84.6 81.4 79.6 85.2

Santa Cruz Sur (on shore) 21.2 18.5 17.5 13.9 14.1

Santa Cruz Sur (off shore) 12.6 14.6 13.3 17.9 18.2

Tierra del Fuego (on shore) 13.8 14.6 13.2 9.8 15.0

Tierra del Fuego (off shore) 18.5 17.3 15.7 15.6 14.3

Estado Nacional 19.6 19.6 21.8 22.4 23.6



Source:

Production & Consumption

Number of Active Rigs in Argentina, 2014-2015

Argentina Crude Oil Production & Consumption History, thou bpd

Comments

BP Statistical Review 2014, OPEC Annual Statistical Bulletin 2014

847 831910 899 900 868 839 838 813

772 743 722687 665 656

430 431 425 394 405 425 449 471523 535 525

571 585 613 636

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Production Consumption

9594

101103

105107 107

104105

101

104

113

106 106

112 • Consumption of crude oil reached almost 650,000 bpd in 2013,

following a slow and steady increase in the last decade. Maturing

conventional oil fields have not been able to catch up with the growth

in crude oil demand. Oil imports have been rising since 2009.

• Preliminary data for Q1 2015 estimates oil production at 5 million cub

m.

• Since 2014, Argentina has witnessed an increase in exploration and

drilling. Oil services firm Baker Hughes counted more than 100

operating rigs in the country.



Comments

Source:

Refining Capacity

National production of refined crude oil products has declined gradually by a total of 10% in the period 2009-2013. Refineries in Argentina operate at almost

full capacity (>95%). The loss of production is attributed mainly to lower quality of oil and to lower efficiency in oil processing.

While crude oil sales prices are declining in the international market, prices of refined products remain high, which makes imports expensive and leaves

fueling stations with shortages of diesel. The government and YPF have planned investments to increase the refining capacity.

YPF owns three refineries, holding 50.4% of the refining capacity in the country. Other large producers of refined crude oil products are Royal Dutch Shell,

Axion Energy in partnership with China National Offshore Oil Corporation Ltd (CNOOC, China's top offshore oil producer), and Oil Combustibles.

Refineries in Argentina as of December 2014 Major Products of Oil Refining, mn litres

Enerdata, Ministry of Federal Planning, Public Investment and Services

Refinery name Owner

Capacity

(thou bpd)

Campana Axion Energy / CNOOC 87

Dock Sud DAPSA 4

Lomas de Zamora DAPSA 8

San Lorenzo Oil Combustibles 50

Ricardo Eliçabe Petrobras 31

Renesa Refineria de Neuquen SA 3

Campo Duran Refinor SA 32

Buenos Aires - Dock Sud Shell 100

La Plata YPF SA 189

Lujan de Cuyo YPF SA 105

Plaza Huincul YPF SA 25

2009 2010 2011 2012 2013

Processed Crude Oil 33,572 34,542 34,383 30,812 30,584

Gasoil 12,009 12,139 12,092 11,978 11,681

Automotive Fuels 6,035 6,150 6,854 7,302 7,610

Fuel-oil 3,219 2,811 2,123 2,390 2,336

Aerokerosene 1,599 1,316 1,275 1,681 1,670

Lubricants 281 349 329 311 312

Diesel-oil 119 46 15 20 36

Kerosene 14 55 45 25 27



III. Natural Gas Sector



Natural Gas Sector Highlights

Argentina became a net natural gas importer in 2008. Gas imports have tripled since 2010, reaching 10 billion cub m in 2014. Pipeline imports are

mainly from Bolivia, while LNG sources are multiple. Since 2009, Argentina has been receiving LNG at a floating terminal with capacity of 4 bcma at

Bahia Blanca. A second LNG import terminal (5.8 bcma) started operation in 2011 close to Buenos Aires.

Even with greater domestic supplies of associated natural gas production from the Vaca Muerta field, the country's gas trade deficit is expected to

remain.

LNG imports are expected to gain a bigger share in the total import balance, whereas pipeline gas imports are decreasing.

Natural gas is the main energy source in Argentina. It also generates more than half of the electricity in the country. In 2014, it was responsible for

about 80% of the thermal electricity generation and 54% of the total electricity generation.

Argentina is the largest natural gas producer in South America. Peak levels of natural gas output were reached in 2006, and production is declining

ever since by 3% per year on average. The government is trying to match the lower local production and the peak winter demand through import

agreements.

The main natural gas fields of Argentina are Neuquina, Austral, and Noroeste. According to data from the National Institute of Statistics, the three

fields combined form about 85% of the natural gas production in Argentina.

According to EIA’s assessment of shale gas resources worldwide conducted in 2013, Argentina’s reserves of technically recoverable shale gas is

almost 60 times that of its current tested natural gas reserves. The most important reserve is in the Vaca Muerta formation (Neuquina Basin). The

unconventional gas formation is found at depths between 2500 and 4000 metres, about 2 km below the water table.

Reserves

Domestic Importance

Trade Balance



Source:

Proven Reserves of Natural Gas

Proven Reserves of Natural Gas by Basins, 2009-2013, mn cub m


2009 2010 2011 2012 2013

Total for Argentina 378,818 358,726 332,511 315,508 328,455

Noroeste, including: 61,846 43,643 33,644 31,820 30,029

Salta 61,594 43,369 33,357 31,648 29,873

Jujuy 42 40 51 34 34

Formosa 210 233 235 138 122

Cuyana, including: 925 1 081 1 060 761 744

Mendoza Norte 925 1 081 1 060 761 744

Neuquina, including: 157,610 161,529 145,295 133,699 138,742

Mendoza Sur 7,381 6,981 6,592 4,711 5,876

Neuquén 141,935 143,524 128,125 117,391 121,112

Río Negro 4,866 5,055 3,126 7,888 7,507

La Pampa 3,428 5,968 7,452 3,710 4,247

Golfo San Jorge, including: 44,397 45,917 48,559 48,446 48,314

Chubut 32,151 32,803 34,002 33,467 33,311

Santa Cruz Norte 12,246 13,114 14,557 14,979 15,003

Austral, including: 114,040 106,557 103,953 100,781 110,626

Santa Cruz Sur (on shore) 13,320 10,994 9,930 8,471 8,532

Santa Cruz Sur (off shore) 10,213 10,704 10,107 8,786 9,009

Tierra del Fuego (on shore) 18,535 14,662 14,507 11,328 12,994

Tierra del Fuego (off shore) 23,226 21,514 19,821 20,338 18,876

Estado Nacional 48,746 48,683 49,589 51,858 61,215



Source:

Comments

Natural Gas Production & Consumption

According to YPF estimates, the natural gas consumption in Argentina was about 48.6 billion cub m in 2014. Approximately 8mn consumers were

connected to gas distribution grids in in the end of 2014.

Recent regulatory changes are related to giving absolute priority to domestic supply of gas at stable prices in order to sustain economic recovery. On days

when a gas shortage occurs, the exports of natural gas and the provision of gas supplies to industries, power plants and fueling stations selling CNG are

interrupted for priority to be given to residential consumers at lower prices.

Preliminary data for Q1 2015 estimates natural gas production at 6.8 billion cub m.

Natural Gas Production & Consumption History, bn cub m

BP Statistical Review, YPF, Argentina Energy Secretariat

3537 37 36

41

4546

46 4544

41 40

39 3836

3233

31 30

3538

40 4244

44

43 4346

47 48

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013




Comments

Source:

Natural Gas Imports & Exports

Argentina's natural gas exports have fallen significantly since 2007 because of the deficit in the domestic market.

Net imports of natural gas for 2014 are estimated at 10.4 billion cub m. LNG imports accounted for about 54% of the total gas imports. They came mainly

from Trinidad and Tobago (46%), Belgium 15%, Qatar 14% and Egypt 9%.

LNG imports are expected to increase their share in the total import balance, whereas pipeline gas imports are decreasing. This is due to Argentina’s

intention to decrease dependence on Bolivian pipeline imports.

Argentina LNG Imports by Country, 2013, bn cub m Natural Gas Net Exports Forecast, bn cub m

BP Statistical Review 2014, BMI Research

Trinidad and Tobago

3.61

Nigeria0.51

Egypt0.16

Qatar0.88

Rest of Europe0.60

Belgium1.04 Norway

0.08

Brazil0.04

-6.2 -6.1 -6.1 -5.7-5.1

-3.8 -3.9 -4.0 -4.3-4.9

-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

2015f 2016f 2017f 2018f 2019f

LNG net exports Pipeline gas net exports



IV. Electricity Sector



Electricity Sector Highlights

The electricity consumption in Argentina has been rising steadily over the last 5 years, following a swift recovery from the economic downturn in

2008. The main driver of consumption growth has been the residential sector, attributing for 2/3 of the total increase in electricity consumption

between 2009 and 2013. Local generating capacities, however, have not been able to catch up with consumption.

Sector Development

Power Capacities

Power Generation

Low-Carbon Power

The power capacities rely mostly on fossil fuels. Natural gas holds more than half of both generation and capacity, followed by hydropower and oil-

fired power plants. The nuclear, coal, and gas power plants work in a base-load regime as they secure the much needed power for the increased

domestic demand.

Total electricity generation in 2014 was 131 TWh, about 1% higher compared to 2013, according to Argentina's electricity market administration

company Cammesa. In 2014, about 63.5% of the country's power generation came from thermal power plants, 31% from hydropower, 4% from

nuclear power, and 2% from wind and solar. As much as 1.1% was imported from Uruguay and Paraguay.

Currently, only a small part of Argentina's total electricity consumption is produced by nuclear, hydropower, and renewables. Other renewable

energies include the production of biofuels for transportation use. The country has adopted a series of new laws to promote renewable energy

sources. Law 26190 declares the production of electricity from renewable energy sources a matter of national interest. It requires that 8% of all

electricity consumed nationally must be generated from renewable energy sources by 2017.



Comments

Source:

Thermal64.9%

Nuclear4.5%

Hydropower 28.5%

Non-hydro renewables2.2%

Installed Power Capacities & Supply

Argentina's power sector faces challenges due to high reliance on hydrocarbons, ageing generating capacities and distribution networks, and lack of

adequate financial resources for upgrades and renovations.

Natural gas is the leading component in the thermal power generation (about 80% in 2014), followed by oil and coal with 16.5% and 3.5%, respectively.

Argentina has transmission network connections with Brazil, Chile, Paraguay, and Uruguay. In 2014, imports were about 1.4 TWh, the majority of them

came from Uruguay. With increasing domestic power demand, power exports have been decreasing in the last several years, reaching almost zero levels

in 2013 and 2014.

Installed Power Capacity, 2014 Power Supply, 2014

BMI Research, Cammesa

Total: 131 TWhTotal: 37.6 GW

Thermal (natural gas, oil, coal)63.5%

Hydropower31.0%

Nuclear 4.0%

Imports 1.1%

Non-hydro renewables 0.5%



Source:

Generation & Consumption

Electricity Generation & Consumption, TWh

Comments

Electricity Consumption by Consumer Type, TWh

BP Statistical Review 2014, Ministry of Federal Planning, Public Investment and Services, BMI Research

31.3 33.2 35.1 37.3 38.9

18.217.4

18.419.0

19.4

31.134.3

35.9

36.937.4

3.4

3.5

3.8

3.84.0

2.8

3.0

3.2

3.63.6

5.1

5.3

5.7

5.56.0

0

20

40

60

80

100

2009 2010 2011 2012 2013

Other (incl.waterworks)

Government

Street Lighting

Industrial

Commercial

Residential

100106

98104

122 122 126130

135139

9399

109114

118 117122

128132

136

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


• Slow economic growth will limit electricity consumption, so the power

consumption growth rate is expected to be around 2% in the next

couple of years. This is relatively low, compared to Argentina's

potential and neighbouring countries.

• Power supply adequacy is expected to improve with additions of

power capacities and improvements in the rates of distribution losses.

• Argentina's main electricity trading partners are Brazil, Uruguay and

Paraguay. By end-2015 the country will start imports from Bolivia as

well.



Source:

Comments

Low-Carbon Electricity Generation History

Currently, only a small part of Argentina's total energy consumption is produced by nuclear, hydropower, and renewables. The National Scheme to

Encourage the Use of Renewable Sources for Electricity Generation (Law 26190, 2006) has established a legally binding target of 8% renewable energy in

the final energy consumption by 2017. This law also introduced several incentive schemes for the development of renewable energy projects.

Argentina has more than 100 hydroelectric power plants, three of them provide more than 50% of the hydroelectric power.

Low-Carbon Electricity Consumption by Fuel, TWh

BP Statistical Review

8.2 7.1 7.5 8.0 7.5 7.1 6.2 7.1 5.8 7.6 7.9 6.9 7.5 7.1 7.2 8.0 7.0 5.9 6.2 6.0

28.3 28.6 26.0

33.2 32.626.8

34.1

41.941.5 39.1

35.5 39.643.4

37.7 37.340.7 40.6

39.6 37.040.7

0.1 0.10.4

0.5 0.5

0.6

0.8

0.71.0 1.1

1.31.4

3.0

3.0 3.0

3.0 2.32.3

2.8

2.9

0

10

20

30

40

50

60

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Nuclear Hydro Other RES



Source:

Renewable Energy – Capacities & Generation

Wind Power Capacities, 2013, MW

Wind Power Generation by Wind Park, 2013, GWh

Solar Power Capacities, 2013, MWp

Solar Power Generation by Solar Park, 2013, GWh


Region Power plant Capacity (MW)

Chubut Wind Park Rawson I 48.6

Chubut Wind Park Rawson II 28.8

Chubut Wind Park Loma Blanca 4 50.0

La Rioja Wind Park Arauco 25.2

Chubut Wind Park Diadema 6.3

Chubut Wind Park El Tordillo 3.0

Buenos Aires Wind Park Necochea 0.25

Rest of Argentina Other wind parks 27.83

Total 189.98

Rawson I180.8

Rawson II108.7

Loma Blanca IV71.1

Arauco57.8

Diadema26.3

Other16.5

Region Power plantCapacity

(MWp)

San Juan Canada Honda I y II 5.00

San Juan Chimbera I 2.00

San Juan San Juan I 1.20

Rest of Argentina Other solar capacities 0.03

Total 8.23

Canada Honda I y II10.1

Chimbera I2.6

San Juan I2.3

Other solar capacities0.1



V. Main Players



Source:

Top Oil and Natural Gas Producers

Top 10 Crude Oil Producers in Argentina, 2014 Top 10 Natural Gas Producers in Argentina, 2014

Argentine Petroleum and Gas Institute

# Operator mn bbl

1 YPF S.A. 79.70

2 Pan American Energy (Sucursal Argentina) LLC 36.07

3 Pluspetrol S.A. 13.38

4 Sinopec Argentina Exploration Inc 11.64

5 Petrobras Argentina S.A. 8.52

6 Chevron Argentina S.R.L. 7.30

7 Tecpetrol S.A. 7.01

8 Petrolera Entre Lomas S.A. 4.54

9 Compañias Asociadas Petroleras S.A. 4.01

10 Total Austral S.A. 3.76

Others 18.31

Total Production of Argentina 194.23

# Operator mn cub m

1 YPF S.A. 11.86

2 Total Austral S.A. 11.63

3 Pan American Energy (Sucursal Argentina) LLC 4.76

4 Petrobras Argentina S.A. 3.31

5 Apache Energia Argentina S.R.L 1.39

6 Tecpetrol S.A. 1.23

7 Pluspetrol S.A. 1.10

8 Petrolera LF Company S.R.L 1.08

9 Pluspetrol Energy S.A 0.93

10 Enap Sipetrol Argentina S.A. 0.82

Others 3.37

Total Production of Argentina 41.48



Source:

Yacimientos Petrolíferos Fiscales (YPF)

YPF Income Statement (Consolidated, ARS mn)

YPF is the largest oil and gas producer in Argentina. The

company was majority owned by Spain’s Repsol from

1999 until the Argentine government seized 51% of YPF

shares after the adoption of the Expropriation Law in May

2012. After a two-year dispute, Repsol accepted USD 5

billion compensation (Feb. 2014), and sold almost all of its

remaining stake for USD 1.3 billion (May 2014).

YPF operates a fully integrated oil and gas chain with

leading market positions across the domestic upstream

and downstream segments.

In 2014, YPF had a 41% share of the total oil production

and a 28.6% share of the total gas production in

Argentina.

In recent years, values from export revenues have

decreased and amounted to 17.1%, 13.3% and 11.5% of

the consolidated net sales revenues in 2014, 2013 and

2012, respectively.

In February 2014, YPF bought Apache Energia Argentina

srl from Apache Corporation for USD 800 million in cash.

At the time of writing this report, YPF and Gazprom are

negotiating an agreement for joint exploitation of shale oil

and gas in the Vaca Muerta fields.

YPF Balance Sheet (Consolidated, ARS mn)

Company data

67,1

64

90,1

13

114,

942

16,1

84

22,5

93 40,1

47

3,90

2

5,07

9

8,84

9

24.1% 25.1%

34.9%

2012 2013 2014

Net Revenues EBITDA Net Profit EBITDA margin

79,9

49

135,

595

208,

554

31,2

60

48,2

40 72,7

81

12,3

57

21,1

77

39,5

47

0.730.82

0.93

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

2012 2013 2014

Total Assets Shareholders' Equity Net Debt Net Debt/EBITDA



Source:

Pan American Energy (Sucursal Argentina)

Pan American Energy LLC (Consolidated, ARS mn)

Pan American Energy (Sucursal Argentina) LLC is the

second largest oil producer and the third largest gas

producer in Argentina.

Pan American is controlled by BP Plc, while Argentina's

Bridas Holdings holds a 40% stake.

The company operates in the four main basins in

Argentina: Golfo San Jorge, Noroeste, Neuquina and

Marina Austral. In 2014, it accounted for 17% of the

hydrocarbons produced in Argentina.

The total amount of investments of the company in

Argentina for 2001-2014 amounted to more than USD 11

billion.

In 2013, company exports totaled USD 1.5 billion.

As of 2014, the company had reserves of oil and gas

equivalent to 1.4 billion bbl and a reserves-to-production

ration of 18 years.

The company has witnessed improving results for 2012

and 2013 in terms of revenues, EBITDA, and net profits.

Pan American LLC Balance Sheet (Consolidated, ARS mn)

Company data

13,2

52

12,3

30

16,6

86

7,64

7

5,15

6

7,93

83,15

3

1,38

7

2,48

6

57.7%

41.8%47.6%

2011 2012 2013


27,7

91

32,8

56

47,4

29

13,8

25

16,5

24

24,8

52

9,65

7

12,3

26

16,5

52

1.26

2.39

2.09

2011 2012 2013




Source:

Petrobras Argentina S.A.

Petrobras Argentina Income Statement (Consolidated, ARS mn)

Petrobras Argentina S.A. (PESA) is the Argentina-based

subsidiary of Petróleo Brasileiro S.A. (Petrobras). The

company is engaged primarily in the oil, gas,

petrochemical, refining and electricity businesses.

Petrobras Argentina S.A was the fifth largest oil producer

and the fourth largest gas producer in Argentina in 2014.

Petrobras Energia S.A. is one of the principal private

energy companies in the South Cone.

The company had a 4.3% share of the oil production and

an 8% share in gas production.

The company is listed in Buenos Aires Stock Exchange

and is part of Merval Index.

As part of the Petrobras divestment plans for 2015-2016,

Petrobras Argentina sold all of its assets located in the

Austral Basin to Compania General de Combustibles S.A.

for USD 101mn.

Petrobras Argentina Balance Sheet (Consolidated, ARS mn)

Company data

12,7

65

15,3

40 20,7

38

2,97

3

3,54

5

3,88

0

0,67

3

0,85

2

0,57

8

23.3% 23.1%

18.7%

2012 2013 2014


18,8

47

20,8

62

24,4

32

10,5

71

11,6

95

12,6

15

7,01

6

7,97

4

9,53

9

2.362.25

2.46

2012 2013 2014




Source:

Companias Asociadas Petroleras SA (CAPEX SA)

Companias Asociadas Petroleras SA (Consolidated, ARS mn)

CAPEX SA is a producer of electricity with operations in

Southern Argentina. The company has been a power

producing company due to its large discoveries of natural

gas in 1991, which coincided with the liberalization of the

country’s electricity sector.

The main activities of the company include the exploration

and exploitation of oil and gas, and the production,

distribution and marketing of propane, butane and

gasoline, generation and sale of electricity.

The company was the ninth largest oil producer in

Argentina in 2014 with a total production of 4.01 mn bbl.

The main risks for the company are related to the

depletion of its oil and gas reserves. If it does not manage

to get new fields, its own gas supplies share in power

production may diminish.

Companias Asociadas Petroleras SA (Consolidated, ARS mn)

Company data

742

715 81

6

191

295

477

20

-83

-225

25.8%

41.3%

58.4%

Apr 2012 Apr 2013 Apr 2014


1,58

3

2,12

0

2,45

6

180

180

180

1,28

0

1,61

7

2,14

16.69

5.48

4.49

Apr 2012 Apr 2013 Apr 2014




Contact:

Corporate Headquarters

6-8 Bouverie Street

London EC4Y 8DD

UK

Voice: +44 20 7779 8100

Fax: +44 20 7779 8224

Americas Headquarters

225 Park Avenue South

New York, New York 10003

US

Voice: +1 212 610 2900

Fax: +1 212 610 2950

Asia Headquarters

Eucharistic Congress Bldg. No.

III

4th Floor, 5 Convent Street

Mumbai 400 001

India

Voice: +91 22 22881123

Fax: +91 22 22881137

Disclaimer:

The material is based on sources which we believe are reliable, but no warranty, either expressed or implied, is provided in relation to the accuracy or completeness

of the information. The views expressed are our best judgment as of the date of issue and are subject to change without notice. EMIS and Euromoney Institutional

Investor PLC take no responsibility for decisions made on the basis of these opinions.

Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved. A Euromoney Institutional Investor company.

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