OREANDA-NEWS. The ruling party?s broad lead in shale-rich Argentina's 9 August primary elections underscores how difficult it will be for the next president to dismantle state-oriented policies that have sown investor caution for more than a decade.

Buenos Aires governor Daniel Scioli, the only presidential contender for the governing Front for Victory (FPV), was the most-voted candidate in the primaries, receiving 38.4pc of the vote compared to 30pc for the alliance led by main rival and outgoing Buenos Aires mayor Mauricio Macri.

All citizens were obliged to vote in nationwide primaries, but considering most of the political alliances already decided their presidential contenders, the election was more akin to a national poll. In the 25 October general elections, a candidate needs 40pc and a 10-point difference with the second-placed candidate to avoid a runoff in November. That goal is far from assured for Scioli, although the primaries showed he is close to reaching the threshold.

The primaries also transformed former government ally Sergio Massa into a potential kingmaker after his alliance secured a robust third place with 20pc of the vote, defying perceptions that the former mayor of the Buenos Aires district of Tigre had lost political relevance in recent months.

Scioli has often had a tense relationship with outgoing President Cristina Fernandez de Kirchner, who is constitutionally barred from running for a third term. The Buenos Aires governor is seen as more business-friendly than the populist Fernandez. But his running-mate, the president's legal and technical secretary Carlos Zannini, points to policy continuity, at least in the short term.

One of the top priorities of Scioli?s economic team is to end high-profile litigation in New York with a group of holdout creditors that pushed the country into default last year. There has been no progress in negotiations with a small group of hedge funds that have refused to restructure defaulted bonds, keeping Argentina largely locked out of international capital markets since its historic 2001 default.

Although Scioli has insisted he would maintain the government's hardline positions toward what it likes to call "vulture" funds, several of his top economic advisers have called for expanding negotiations with the holdout creditors to reach a settlement.

Economic reforms, including scrapping stringent restrictions on repatriating profits and limits on foreign exchange purchases, are likely to take longer.

Yet business leaders who have met with Scioli advisers say they have received hints of a less hostile administration. Scioli himself says he does not want his administration to be seen as mere continuity of Fernandez, vowing to "change what needs to be changed" after he got the most votes in the primaries.

These changes are likely to include cutting subsidies and allowing the power sector to increase tariffs in the capital after an almost decade-long freeze that has left distributors near financial collapse. In the province he governs, Scioli?s advisers point out that he has given a green light to a gradual increase for public utilities.

Although changes to the upstream sector are likely to take longer, Scioli's advisers are eager to say that small business-friendly steps such as agreeing with the holdouts and increasing tariffs should be seen as signs to the sector as a whole. As is the name most frequently mentioned to lead what would likely be a new energy ministry, upgraded from a secretariat, Neuquen governor Jorge Sapag.

Sapag, who is used to touting his province's vast shale potential at international conferences, has often tried to push the national government toward investor-friendly policies, such as increasing tightly regulated wellhead prices.

For state-controlled oil company YPF, a Scioli victory would likely assure continuity. In his campaign, the governor often touts the 2012 expropriation of a majority stake in the company from Spain's Repsol and has praised chief executive Miguel Gallucio.

For now, Scioli has kept his energy focus on less controversial issues, mainly a broad pledge to boost renewable energy. The South American country is highly dependent on natural gas to generate power, even though domestic production has been flagging for years and supply restrictions during peak demand periods have become commonplace, leaving the country increasingly reliant on pipeline and LNG imports.

On a broader level, Scioli's economic advisers have emphasized the need to tackle inflation gradually, with a goal of reaching around 5pc/yr after years at an unofficial annual rate of around 30pc. But specifics on how that would be achieved have been scant.

In energy and much of the rest of the economy though, Scioli's advisers play down expectations for quick change, following the governor's oft-repeated line that he wants to "build on top of what has already been done."