Argentine Congress Passes Law Aimed At Attracting Oil Investment

Hess To Form MLP For North Dakota Oil, Gas Transport Assets
Argentina's Congress gives final approval to a law revamping energy investment regulations, the latest step by President Fernandez to lure foreign companies into the country's promising shale sector.

Reuters

BUENOS AIRES, Oct 30 (Reuters) - Argentina's Congress gave final approval on Thursday to a law revamping energy investment regulations, the latest step by President Cristina Fernandez to lure foreign companies into the country's promising shale sector.

The law, passed by a 130 to 116 vote in the lower house, cuts the minimum investment needed for companies to be exempt from import controls to $250 million from $1 billion.

The same level of investment would also allow oil and gas producers to get around foreign exchange controls by holding on to the hard currency earned from 20 percent of their exports.

"The desired horizon for Argentina is only possible if there are investments," said Mario Metaza, a lawmaker for the ruling coalition, also president of the Congress' energy commission.

The Senate approved the bill earlier this month. Argentina needs to ramp up production from its vast but barely tapped Vaca Muerta shale oil and gas deposits in order to reverse a gaping $7 billion energy deficit that is draining foreign reserves.

Opposition lawmakers accused the government of rushing the law through and handing strategic resources to foreign firms.

"They are ratifying the concept of hydrocarbons as a commodity and not as a strategic resource and a common good," said leftist opposition legislator Claudio Lozano. "The possibility of an export track is suicide for Argentina."

Developing Vaca Muerta in the shadow of the Andes mountains and securing energy independence will cost up to $200 billion in the next 10 years, state-controlled energy firm YPF says.

Argentina has just over $27 billion in foreign reserves and a new debt default this year further hindered its access to global capital markets, leaving the government to rely on foreign oil firms to lead the investment drive.

(Reporting by Maximiliano Rizzi; Writing by Hugh Bronstein and Sarah Marsh; Editing by Meredith Mazzilli)

Copyright 2017 Thomson Reuters. Click for Restrictions.

WHAT DO YOU THINK?

Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE



Most Popular Articles

From the Career Center
Jobs that may interest you
Contracts Advisor
Expertise: Contracts Administration
Location: Houston, 
 
Senior Contracts Specialist
Expertise: Logistics Management
Location: Louisiana, 
 
Financial Analyst - Finance and Investor Relations
Expertise: Accounting|Financial Analyst|Legal
Location: Dallas, TX
 
search for more jobs

Brent Crude Oil : $50.75/BBL 0.09%
Light Crude Oil : $47.73/BBL 0.50%
Natural Gas : $3.05/MMBtu 0.97%
Updated in last 24 hours