Argentina promotes a law for investments in mature oil areas

The government of Argentina sent to Parliament a bill to encourage investments in mature hydrocarbon areas, official sources confirmed to EFE this Saturday.

The initiative, whose submission to Congress had been anticipated days ago by the Minister of Economy and presidential candidate, Sergio Massaincludes elimination of taxes and other fiscal incentives for the exploitation conventional in mature basins.

According to the project, to which EFE had access, the so-called Mature Area Promotion Regime seeks to promote investments to increase the production of liquid hydrocarbons in mature areas or in wells of medium or low productivity, inactive or closed.

According to the text of the initiative, the project “addresses the specific situation of various hydrocarbon areas in our country that has seen its level of activity steadily reduced not only for economic reasons” but “also for technical and even geological reasons.”

This situation, observed Argentine government“unfailingly impacts the support of direct and indirect sources of work.”

According to official data, there are about 10,000 supplier companies in the oil and gas chain, 80% of them SMEs.

The project aims at conventional activity at a time when Argentina is experiencing strong expansion in the unconventional hydrocarbons segment thanks to massive development projects in the gigantic Vaca Muerta formation, in the southwest of the country.

According to the Argentine authorities, this dynamism puts pressure on conventional farms, since it “competes” for capital and inputs with non-conventional activity, with a drop in conventional production of 5% year-on-year.

The proposed incentive scheme has a ten-year implementation period and, among other things, allows oil companies With new investment projects, they can export 50% of their incremental production without being subject to the export tax, as well as import inputs without paying import taxes.

(With EFE information)