BUENOS AIRES – Argentina’s central government and the governors of the 10 oil provinces have agreed on a plan to attract greater investment in the hydrocarbons sector by overhauling a decades-old law, President Cristina Fernandez’s office said Wednesday.
The draft bill is aimed at “achieving energy self-sufficiency, substituting imports, generating significant hard-currency savings and attracting greater investment to boost production,” a statement read.
The agreement was unanimously approved at a meeting attended by Fernandez; Economy Minister Axel Kicillof; Planning Minister Julio de Vido; the CEO of state-controlled oil company YPF, Miguel Galuccio; the governors of Chubut, Formosa, Jujuy, La Pampa, Mendoza, Neuquen, Rio Negro, Santa Cruz, and Tierra del Fuego; and the lieutenant governor of Salta.
The proposed legislation would standardize bidding processes, concession terms, exploration permits, royalties and tax laws, transferring authority over those matters from the provincial administrations to the central government.
“The goal is to create investment conditions with predictable parameters to guarantee everyone’s interests are protected,” Cabinet chief Jorge Capitanich, who also participated in Tuesday night’s gathering, said.
Argentina is seeking to adjust its regulations to the country’s “new opportunities,” including shale and offshore oil and gas resources, that were not addressed by the 1967 Hydrocarbons Law, Capitanich said in his daily press conference.
The regulatory changes would not apply to oil production contracts currently in effect in each of the provinces.
Investment certainty based on clear rules, “long-term forecasts” and transparency is essential if Argentina is to capitalize on its plentiful oil and gas reserves and reduce costly fuel imports, Capitanich said.
The bill was sent to the Senate on Wednesday.