Chubut Governor Signs PanAm Contract Extension

The governor of Argentina's Chubut province, Mario Das Neves, signed the extension of the E&P contracts Friday (Apr 27) held by Anglo-Argentine firm Pan American Energy (NYSE: PAE), the provincial government said in a statement.

The renegotiation will provide the province with an additional US$778mn over the next 10 years.

The deal increases royalties to 15%. Further, Pan American will have to increase oil output 9% a year over the next 10 years and invest at least US$2.000bn in that timeframe.

Pan American holds 54% of hydrocarbons areas in the province.

Other operators in the province - including the YPF subsidiary of Repsol YPF (NYSE: REP), the Sipetrol subsidiary of Chile's state oil company Enap and local oil company Tecpetrol - will have to renegotiate their contracts in similar ways.

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