n an interview with the Herald at YPF’s headquarters in Puerto Madero, Bianchi highlighted Argentina’s potential to be the leading country on non-conventional oil and gas research and development and described Y-TEC as a unique experience worldwide. At the same time, Bianchi said fracking poses no environmental risks and said the country needs to exploit its renewable energies.

Sunday, November 23, 2014

‘Repsol seriously damaged oil, gas fields’

Gustavo Bianchi has high hopes on Y-TEC potential after the first two years of the company.

By Fermín Koop
Herald Staff

YPF research unit head and chemist Gustavo Bianchi talks to the Herald

Chemist Gustavo Bianchi was working in the United States when he received a call from YPF head Miguel Galuccio and Science Minister Lino Barañao, asking him to return to Argentina to start a development company to be created jointly by YPF and the Argentine Council for Scientific and Technological Research (Conicet).

Two years after the call, Bianchi is now the head of Y-TEC, a firm that provides technological solutions to the energy industry.

In an interview with the Herald at YPF’s headquarters in Puerto Madero, Bianchi highlighted Argentina’s potential to be the leading country on non-conventional oil and gas research and development and described Y-TEC as a unique experience worldwide. At the same time, Bianchi said fracking poses no environmental risks and said the country needs to exploit its renewable energies.

How did the project to create Y-TEC start?

It all started when YPF’s head Miguel Galuccio got together with Science Minister Lino Barañao. I’ve known both of them for a long time and they called me with a project they had in mind. I was working as a consultant for a United States company but I chose to come back to Argentina since my area of expertise has always been technology. The idea was to create a corporation with YPF and Conicet.

What’s the difference between Y-TEC and other research companies?

I worked in research all around the world but I’ve never seen a company like Y-TEC. It’s a unique experience worldwide. Even though other companies like Exxon have their own research centres, an alliance with an agency such as Conicet has never been done. When I started at YPF, there were 60 people working with research and development and now there are 330, 22 percent of which are from Conicet.

Argentina faces the problem of not having many experienced researchers. How does Y-TEC handle such a problem?

There are many people about to retire with lots of experience and at the same time young researchers with not so much experience. There’s no intermediate generation. Considering that, we hired those experienced professionals and asked them to train the young ones specifically in the areas Y-TEC needs. We also do online conferences with teachers from other countries and send people to do courses abroad.

What’s Y-TEC main objective?

As Brazil is considered the leader on the research and development of deep water offshore drilling because of the long-term policies they have implemented, we want Argentina to be the leader on the research and development of non-conventional oil and gas. We have the second most important shale gas reserves and the fourth most important shale oil reserves.

But the United States and many other countries have already worked with shale for many years. What’s new to develop since you could be using their technology instead?

The first thing we did was using their technology but we didn’t get the results we expected. Vaca Muerta is completely different to other shale areas in the rest of the world. There’s some technology that can be used and some that can be adapted but we also need to develop new ones. If we manage to work here successfully, YPF’s shares will rise and we’ll be able to export our developments to be used in other complex shale areas around the world.

Argentina still relies on conventional oil and gas and it will be years until the shale boom happens. How Y-TEC developments can help that industry?

We are increasing YPF’s conventional production thanks to our developments. The company’s production was on a free fall but we were able to reverse it. When we started, we found Repsol had seriously damaged the oil and gas fields due to a lack of maintenance. They were taking out the resources continuously without doing any maintenance. Many wells had been closed by the provinces but we fixed them with new developments.

Do other companies come to Y-TEC and ask to use your developments in their oil and gas wells?

As Y-TEC needs to be self-sufficient, we make agreements with other companies to provide them with our technology. For example, we recently signed a deal with Sinopec. Any company of Argentina or Latin America that needs tech support can come to us. At the same time, we provide support to small and medium- sized companies without them paying anything to us. They get our guidance and tech support and only when the product is finished they pay us a royalty between 0.5 and 2 percent of the product’s retail price.

YPF and other firms face criticism from environmental groups regarding the hydraulic fracture used to exploit shale oil and gas. Do you see any risks on exploiting such resources?

Fracking has been used for more than 70 years in Argentina. No earthquakes can be caused because of it since it’s only a water pump that increases pressure. Environmentalists say the chemicals used in fracking lead to pollution but that’s not true. Those chemicals are the same ones included in many household products such as tooth paste. We need to put an end to the myths about fracking.

But if there are no environmental risks why did some countries ban fracking?

You should ask them that question. If you analyze fracking from a technical point of view, it carries no environmental risk and that’s something I can easily explain. But what I can’t explain is foolishness.

So those opposed to fracking are being foolish?

Any industrial activity affects the environment. If somebody says the opposite, they are lying. But that doesn’t mean we should stop carrying out all projects and activities. Our role is to anticipate what the impact will be and minimize it.

Y-TEC has many projects regarding renewable energy sources. Isn’t there a conflict of interest with YPF by developing new energies that aren’t oil and gas?

A country can’t fully rely on alternative energies so there’s no conflict. Germany’s energy matrix has 15 percent of renewable energy sources and that’s the highest it has been achieved so far. Argentina’s energy matrix shouldn’t have to rely only on gas, oil and water. We have high-quality alternative energies that we could be using. It’s our role in Y-TEC to do projects and show results so investors then come.

What kind of renewable energy sources can be exploited?

We want to take advantage of the sea and use its waves and tides to create energy. There’s a project in Y-TEC to build a bridge between Tierra del Fuego and Santa Cruz, which would have a turbine to use sea power. At the same time, we are working with lithium since Argentina has a great potential. We want to build lithium batteries here instead of having to import them. Mining companies use lots of water to extract the lithium but we have a project to change the method and obtain lithium with only a few litres of water.

@ferminkoop