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.
To contact the reporter on this story:
Daniel Cancel in Buenos Aires at
dcancel@bloomberg.net
To contact the editor responsible for this story:
James Attwood at
jattwood3@bloomberg.net
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