Oil billionaire Paolo Rocca says he was too optimistic on Milei’s reforms

Billionaire Paolo Rocca was too bullish on the pace of change that libertarian President Javier Milei could bring to Argentina.

“We were all probably over-optimistic in thinking that this could be done in the shorter term,” Rocca, an Italian-Argentine who is chief executive officer of Tenaris SA, a top world supplier of pipes to oil drillers, said on a quarterly earnings call.

Plans to ramp up drilling and build out infrastructure in vast Argentine shale patch Vaca Muerta haven’t materialised in the way Rocca had hoped when Milei took office eight months ago. That’s because the government is still trying to turn the economy around, a necessary requirement for broadening corporate finance opportunities, Rocca told analysts.

“It’s a difficult situation to put under control from the point of view of inflation and fiscal equilibrium,” Rocca said. “So Argentina will recover credibility and access to the market, but it will take a little more time.”

Tenaris is part of Rocca’s Techint Group empire that includes driller Tecpetrol SA, one of Argentina’s biggest shale gas producers, and steelmaker Ternium SA, which on Wednesday also highlighted the tough economic climate in the country. Milei handed several of the group’s former employees key jobs at state-run YPF SA and in the Energy Department.

The investment delays in Vaca Muerta will contribute to global headwinds for Tenaris — from North America to the Middle East — in the second half of the year, with sales expected to fall by up to 15 percent from the first half.

by Jonathan Gilbert, Bloomberg