When most people think of Argentina, the country’s economic crisis of 1999-2004 probably comes to mind.  The banking system was in disarray, consumer confidence was waning (precipitating runs on the banks), inflation was rampant, the national debt was both huge and unsupportable, unemployment was rising, and civil unrest was in the air.  After a series of tough measures, including decoupling the peso from the dollar, followed by devaluation and other economic reforms, the situation began to turn around in 2003, when GDP improved by more than 8 percent, with subsequent years posting similar gains.  With an improving economy came higher demand for energy in a country where supply and demand are in relatively tight balance.  Argentina’s natural gas production has not kept pace with demand.  During their winter, the Argentines have had to import gas from Bolivia and reduce exports to Chile.  Bolivia has now announced it intends to significantly increase the price of its gas sold to Argentina.  This should provide an incentive for Argentina to increase its own natural gas production, which would require higher prices.  To encourage energy development, the government has recently eased price controls on natural gas for all but the residential sector.  The government recognizes that continued economic improvement is dependent upon growth in energy supplies and attraction of additional foreign investment. 

Moreover, Argentina is one of a decreasing number of countries in the world where international oil companies have relatively free and open access to oil and gas exploration and development.

These factors bode well for Geoandina as it seeks to expands its operations in Argentina. Many people are surprised to learn that Argentina is the largest natural gas producer in all of Central and South America; the country is second only to Mexico in natural gas consumption.  Geoandina’s  knowledge and operating experience in the country have given the company an appreciation of Argentina’s growing need for additional energy supplies, as well as for the geology of the nation. 

Argentina is a great fit for Geoandina’s  exploitation core competencies.  The company believes it can add value in Argentina through operating efficiencies, taking advantage of identified opportunities for workovers, recompletions, and other enhancements. Geoandina believes there is meaningful exploration upside in Argentina.

Geoandina Mining Corp.s is committed to growth in Argentina, with the ultimate goal of establishing the country as a core area.  Geoandina’s  sense of urgency and emphasis on keeping costs low and activity high will translate into a lot of wells drilled at a reasonable cost.  Geoandina Mining Corp.s  brings to Argentina skill sets that have been successful around the world.