Can you give us an overview of PwC’s services in the oil and gas industry and its activities in Argentina?

At PwC, we have two main objectives in the oil and gas industry: to enhance the productivity of companies and to help them manage risk effectively. We specialize in this industry and have various resources to support our clients, including publications, research centers, and specialized training. We also have expertise in energy and utilities, offering services such as audit, tax advice, technology consulting, human resources consulting, strategy work, and risk consulting, among others. Our approach involves transforming traditional organizational structures to more modern ones, such as shifting from purchasing or procuring to supply chain management.

An example of our advising scheme is “Fit for $50,” which focuses on operational excellence, efficiency, cost management, and identifying new ways of working. We share our knowledge globally and consider ourselves thought leaders in the industry. PwC has been providing services in Argentina since 1913 when the country was one of the most important economies in the world, attracting major international companies like Exxon, Ford, Citibank, and Shell. Today, we work with most energy companies in Argentina.

How significant is Argentina to PwC’s long-term profitability?

Emerging countries like Argentina are important to us. There are four areas that create competitive advantages for the Argentine economy, namely unconventional hydrocarbon reserves, highly productive agribusiness, developed infrastructure, and the financial industry, which is smaller than in countries like Brazil and Chile.

How would you describe Argentina’s fiscal regime?

Argentina’s fiscal regime is better than some countries and worse than others. Compared to Brazil, for instance, Argentina has fewer regulations, as Brazil has a vast number of regulations in all spheres, and they are complex. Norway, on the other hand, has fewer taxes and is less complex than Argentina. In terms of taxes, Argentina is relatively expensive, with half of what is paid for gas going towards taxes. Companies and individuals pay taxes based on what they earn, have, and consume.

How would you rate the management of oil and gas companies in Argentina?

The management of oil and gas companies in Argentina is very talented, considering that some companies have grown despite declining production. Argentine management has been forced to be innovative and creative when facing adversities like inflation, devaluation, and social unrest. However, the oil and gas industry is considered more conservative than other industries, such as technology, retail, and banking. PwC works with companies on project management, providing independent perspectives and advising senior management or owners on certain decisions.

What risk factors should oil and gas companies consider before entering Argentina?

The primary risk factors foreign oil and gas companies face when entering a new country are the macroeconomy and the industry itself. Companies must analyze a country’s geology, technology availability, financing options, and business regulations in detail. To understand a country’s regulatory framework, companies must also understand its business habits and customs. In Argentina, the geology is very promising, and technology can be made available, but financing projects in the country is complex due to its macroeconomic state. Regulation is the area that the country needs to improve to attract more international investors.