Right-wing congressman Javier Milei jolted Argentinian politics yesterday, defying polls to place first by a narrow margin in the country's open primary to replace President Alberto Fernandez.
Milei, of the Liberty Advances party, received 30.4pc of the vote in the open, simultaneous and obligatory primary in which candidates from all parties run. He carried 17 of the country's 23 provinces.
The traditional conservative coalition, Together for Change, received a combined 28.3pc, with former government minister Patricia Bullrich placing first. She will be the group's candidate. The ruling Union for the Homeland received 27.3pc with finance minister Sergio Massa the coalition's top vote-getter, with 98pc of votes counted by early today.
General elections will be held on 22 October. A presidential runoff between the top two candidates will be held on 19 November if no one receives 50pc of the vote. A runoff is expected.
The results set up a months-long battle that could see Argentina take a dramatic turn as it battles triple-digit inflation and falling growth, but is on the cusp of a boom in oil and natural gas production and could become a world leader in lithium for the energy transition.
Milei has run on a platform of ending Argentina's "political caste," promising to radically remake the country's political and economic structures. He wants to dollarize the Argentinian economy, privatize state enterprises, including the national oil company, YPF, and enforce an iron-fist policy for crime, including the death penalty. He has embraced comparisons to former US president Donald Trump.
Bullrich, who will helm the traditional conservative coalition, also ran on a tough-on-crime policy. She was in charge of security as interior minister in the government of former president Mauricio Macri (2015-2019). She has also promised to overhaul the public sector, which would include reengineering the energy sector that includes YPF, the state-owned power company Enarsa, and numerous smaller firms.
On 10 August, YPF reported second quarter crude production of 241,000 b/d, up 7pc from last year, and natural gas production of 36.5mn m³/d, similar to year earlier.
Massa, who has been finance minister for a year, hopes that changes in energy policy will help get him around a tough economy with annualized inflation at 114pc through June and GDP on track to shrink from 2-3pc.
The central component is monetizing the vast Vaca Muerta unconventional formation. It holds an estimated 308 Tcf of shale gas and 16bn bl of oil equivalent, according to the US Energy Information Administration.
In July, the government inaugurated a 573km (356-mile) pipeline to move gas from the unconventional Vaca Muerta formation to Buenos Aires, the capital. The $2.9bn pipeline is transporting 11mn m³/d, and will add another 10mn m³/d by the end of the year.
Lithium is also another plank, with Argentina poised to become a major player. It was the fourth world producer in 2022, with 6,200 t and is second in the world with 20mn t of lithium resources, according to the US Geological Survey.
