London — Total has put on hold plans to develop the Fenix gas project offshore Argentina's Tierra del Fuego province, the company's chief financial officer Patrick de la Chevardiere said Friday.
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The decision is due to the country's economic crisis and currency devaluation, and particularly concerns about gas pricing, de la Chevardiere said in a results conference call, adding there would be no "fresh money" for the country. He said Total is increasing production from the Vaca Muerta shale play, which is subject to guaranteed strong gas prices, noting that the price will only taper to $6/MMBtu in 2021 from $7.50/MMBtu in 2017.
Total had hoped to take a decision this year, alongside Germany's Wintershall and BP-backed Pan American Energy, on developing Fenix, one of a number of projects intended by President Mauricio Macri to wean Argentina off imported gas and switch to an export focus.
De la Chevardiere said the project had been modeled along similar lines to Vega Pleyade, which came onstream in 2016 in the nearby CMA-1 concession, and the aim was a design capacity of 10 million cu m/d.
But in the last year Argentina's currency, the peso, has plunged in value, inflation has spiraled and economic growth has shriveled.
"We tried to standardize as much as we can, but facing the situation we are facing in Argentina at the moment, we are re-evaluating this situation about gas price and devaluation of the currency," he said. "As of today we continue on Vaca Muerta. We will not inject fresh money into Argentina at the moment. We are monitoring the situation because of the economic environment of the country."
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