Milei's bid to open Argentina's economy passes
Argentina's congress today approved the government's sweeping economic legislation that could open the door to more private-sector investment in energy and commodities.
The bill passed on a 142-106 vote, with five abstentions, after a marathon 20-hour debate. Changes include privatizing some state-owned companies, controversial labor reforms and measures to promote LNG development.
The omnibus legislation, which includes 279 articles, is an important victory for President Javier Milei's administration and will change the way many sectors, including energy, operate in the country.
Lawmakers aligned with Milei's Liberty Advances party swiftly moved to the second stage of the process, which requires approval of individual articles. The omnibus bill was initially approved in February, but the administration withdrew it after congress failed to approve several key individual articles. That original version included 664 articles.
Several of the more controversial articles were brought up immediately after the blanket approval and easily passed. They included an article allowing for privatization of state-run enterprises — national power company Enarsa is on the list — and another delegating to the administration the power to eliminate state agencies without having to consult with congress.
Also approved was the article on labor reform. The country's oilseed industry and port workers' unions called a strike the previous day to pressure congress to modify the labor reform. That did not happen. It passed in a separate 136-113 vote. The strike started to fizzle with approval of the legislation.
Approval of the package includes several articles the administration says will open the door to major investments in the energy sector.
Chapter II specifically covers natural gas, and introduces new regulations for LNG. The chapter includes five articles that allow for 30-year contracts for LNG export projects and guarantees that gas supply cannot be interrupted for any reason. The energy secretariat has six months to design the implementing rules for LNG.
The government wants to speed up monetization of the Vaca Muerta unconventional play, which has an estimated 308 trillion cf of natural gas reserves. It is pushing for Malaysia's Petronas to fully commit to a large-scale LNG facility that would start with a $10bn investment.
Chapter IX of the legislation creates a new framework, known as the Rigi, for investments above $200mn. It offers tax, fiscal and customs benefits. Companies have two years from implementation of the legislation to take advantage of the Rigi. The chapter on this framework is one of the most complex in the bill, including 56 articles. It includes specific references to energy projects, from power generation to unconventional oil and gas development.
The administration claims the legislation will help tame inflation and stabilize the economy. Inflation was 276pc annualized through February, but is declining, and Milei announced that monthly inflation would be in single digits when the March numbers are announced. The country recorded a 0.2pc quarterly fiscal surplus in the first quarter of this year, something not achieved since 2008.
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Australia's Woodside plans CCS for Browse gas project
Australia's Woodside plans CCS for Browse gas project
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Japan’s Kobelco to shut basic oxygen furnace, build EAF
Japan’s Kobelco to shut basic oxygen furnace, build EAF
Tokyo, 21 May (Argus) — Japan's Kobe Steel (Kobelco) will close one of the two basic oxygen furnaces (BOFs) at its Kakogawa steel works, looking to replace it with an electric arc furnace (EAF). Kobelco will invest ¥300bn ($1.9bn) to accelerate reducing greenhouse gas emissions by introducing a new EAF, the company said on 20 May as part of its mid-term strategy for the 2024-26 fiscal years. This will result in a closure of a BOF at Kakogawa. It will finalise the decision for introducing an EAF in the early part of its 2024-26 mid-term strategy period, Kobelco said, aiming to start producing crude steel with scrap metal sometime during the 2030s. Kobelco produced 5.9mn t of crude steel during the 2023-24 fiscal year ending 31 March, down by 3.5pc from the previous year. It forecasts producing around 6mn t during 2024-25, according to data separately announced by Kobelco on 9 May. The company did not disclose the production of each BOF at Kakogawa. This is the latest major Japanese steel firm that specialises in BOF production to announce proposed EAF operations, following Nippon Steel and JFE. Nippon Steel started commercial operations in 2022, while JFE plans to start in 2027. Kobelco's switch to EAF production will lead to further concerns about scarcity of scrap in Japan . The supply shortage could be as high as 5mn t in 2030 and 11mn t in 2050, according to a 2022 report by the country's trade and industry ministry. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Southeast Asian steel demand to rise in 2024: Seaisi
Southeast Asian steel demand to rise in 2024: Seaisi
Shanghai, 21 May (Argus) — The Southeast Asia Iron and Steel Institute (Seaisi) estimates that southeast Asian countries' steel demand will grow by 3.7pc from 2023 to 76.5mn t in 2024. But the growth rate fell below previous expectations considering high global inflation risks, volatile prices and a demand slowdown in China and many other regions, the institute said at the 2024 Seaisi conference in Vietnam held over 13-16 May. Steel demand in the six major countries of the Association of Southeast Asian Nations (Asean-6) fell by 1.9pc from 2022 to 73.5mn t in 2023, Seaisi said. Asean-6's steel production also dropped by 2.1pc on the year to 49.4mn t in 2023, in line with contracting demand. Asean-6's net imports slid by 1.3pc on the year to 24.3mn t in 2023. Lower external demand, high inflation and interest rates as well as tightening global financial markets were the main reasons for steel industrial setbacks last year. It led to a slowdown in construction sectors and steel industrial destocking activities in the region. Steel demand in Malaysia, Philippines and Vietnam fell by 14pc, 7.5pc and 4.8pc respectively in 2023, weighing on regional industrial performance although demand rose by 18pc in Singapore and 6.3pc in Indonesia, Seaisi said. Thailand's steel demand edged down by 0.1pc in 2023. Asean regional steel demand was expected to increase in 2024 because Asean-6 governments were optimistic about achieving their economic growth targets, given strong private consumption in most countries, the rolling out of infrastructure and construction projects, a recovery in tourism and electronics, and as inflation rates move towards targeted ranges. But the region will continue to experience challenges from supply chain uncertainties on the back of escalating geopolitical tensions and wars, weakening Asean currencies except for the Singapore dollar, economic slowdowns outside of Asean, volatile commodity prices, and extreme weather, Seaisi said. Seaisi did not provide a forecast for regional steel production in 2024, but it sees steel capacity expansions in the region leading to overcapacity issues. It expects Asean-6 crude steel capacity to rise from 78mn t/yr in 2022 to 94mn t/yr in 2024. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Australia pauses pro-upstream offshore oil, gas reforms
Australia pauses pro-upstream offshore oil, gas reforms
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