Global News: Argentina Offers incentives for $1 Billion Energy Projects …

Argentina will offer energy companies incentives if they invest $1 billion or more over a five-year period as the country struggles to lift output and pare fuel imports a year after seizing YPF SA.

Companies that meet the requirements will be able to sell 20 percent of production in international markets without paying export taxes and be able to keep export revenue from 20 percent of output outside of Argentina, according to a decree published today in the government’s official gazette. They will also be able to sell oil and natural gas slated for export in the domestic market at international prices if the local supply is insufficient, the government said. Companies that qualify for the plan will also be granted foreign currency access, it said.

“It’s necessary to strengthen the promotion of investment destined for the exploration of hydrocarbons,” the decree said.

President Cristina Fernandez de Kirchner is struggling to attract energy investments after nationalizing a 51 percent stake in YPF from Spain’s Repsol SA without compensation in April 2012. YPF, the country’s largest energy producer, is expected to sign a definitive joint venture with Chevron Corp. (CVX) as early as tomorrow with an initial investment of $1.5 billion to develop oil and gas shale deposits in Vaca Muerta.

Chevron Signing

Chevron Chief Executive Officer John Watson will travel to Argentina to sign the deal between July 15 and July 16, Jorge Sapag, governor of Neuquen province where the Vaca Muerta formation is located, said on June 26.

A YPF official who isn’t authorized to speak publicly said today he didn’t have any information on when the agreement will be signed. Jim Craig, a spokesman for Chevron, couldn’t immediately be reached by phone for comment.

YPF has also signed preliminary accords with Dow Chemical Co., Bridas Corp., and Corp. America to tap what the U.S. Energy Information Administration says is the world’s second-largest shale gas reserve and fourth-largest shale oil deposit.

Fernandez seized Repsol’s majority stake in YPF after the country’s energy deficit ballooned to a record in 2011. This year, Argentina has imported $4.6 billion of fuel and lubricants the year through May, a 30 percent increase from the same period in 2012, widening the deficit to $2.13 billion in the period.

Repsol is seeking as much as $10.5 billion for its stake in YPF and has sued Chevron and other potential partners. Repsol, based in Madrid, on June 25 rejected an offer by the Argentine government meant as compensation for YPF’s seizure.

Reported by: Caye Global News, Bloomberg


Oil, Gas and Petrochemicals  by Dr. Theodore, now available on these stores:

The Secret World of EnergyBuy the Book on Hive

Oil – Gas Exploration & Drilling:

Buy the Book on HiveThe World of Energy Library

Leave a Reply