They facilitate greater access to foreign currency for oil companies that invest and increase the production of crude oil and gas

General 29 de mayo de 2022
It will be through a Foreign Exchange Access Regime for the Incremental Production of Oil and Natural Gas. The measure was announced in an act headed by President Alberto Fernández and Economy Minister Martín Guzmán.
Gabinete nacional

The Government announced on Tuesday the launch of a new Foreign Exchange Access Regime for the Incremental Production of Hydrocarbons, which will allow operating companies to access a greater volume of foreign currency in the free exchange market for an equivalent of 20% of the additional injection they achieve in oil and 30% in natural gas projects in all basins, compared to existing levels in 2021.

The measure -which will be formalized by means of a Decree- was presented this Tuesday by President Alberto Fernández, the Minister of Economy, Martín Guzmán; the Secretary of Energy, Darío Martínez; and the president of the Central Bank, Miguel Pesce, in a ceremony held at the Government House Bicentennial Museum, with the participation of the directors of the main oil companies.

The initiative provides for the creation of a Foreign Exchange Access Regime for the Incremental Production of Oil and Natural Gas, as well as a Regime for the Promotion of Employment, Work and the Development of Regional and National Suppliers, with which it seeks to provide measures key to increasing the scale of production and using the new transportation capacity of the Néstor Kirchner gas pipeline and private infrastructure works.

DNU

The President expressed during the ceremony that Argentina has "a unique opportunity" to develop its energy potential in terms of production, regional development, fiscal balance and exports, by ensuring that the country has "everything that the world demands today in terms of energy ".

"The doomsayers said that Argentina was on the way to an energy collapse, but YPF and the rest of the producers do not stop growing," said the head of state, in addition to noting that thanks to the Gas.Ar Plan some US$ 6,000 were saved millions in fluid that previously had to be imported.

After his tour of Spain, France and Germany, Fernández highlighted the interest of the governments of those countries in counting on Argentina as a supplier of natural gas, for which he recommended "paying attention to the liquefaction plant" that allows its transfer by sea "to put it into operation as soon as possible".

"We are going to send Congress a law that establishes the conditions under which we promote the creation of these plants, so that everyone is certain of what the future will be like in their investments," the President stated.

New scheme

This new scheme is committed to unlocking key upstream investments (exploration and production) for the development of the sector and the supply of the Néstor Kirchner gas pipeline once the work is finished.

Access to foreign currency may be used to pay principal and interest on commercial or financial liabilities abroad, including liabilities with related non-resident companies, profits and dividends, and repatriation of direct investments by non-residents.

To this end, "the Incremental Benefited Production Volume (VPIB) and the Incremental Benefited Injection Volume (VIIB) are established at 20% of the incremental production of crude oil and 30% of the incremental production of natural gas that each beneficiary has obtained."

In the standard, incremental production (injection) is defined as the difference between the effective production of the last 12 months and the baseline defined as the volume obtained by each company in 2021.

In addition, additional percentages will be obtained for the coverage of the domestic market, the reversal of the technical decline, the incremental production in low-productivity wells, the contracting of local companies for special services, and the investment.
"Solve Bottlenecks"

In the presentation of the measures, Guzmán assured that the new regime aims to "resolve limitations and bottlenecks" derived from Argentina's problems in the external sector.

This was expressed in the announcement made of the new regime that seeks to encourage increased oil and gas production by making access to the foreign exchange market more flexible for companies in the sector.

In this way, it is hoped that, with the facilitation of access to foreign currency, oil and gas producing companies will have guaranteed "access to special equipment, so that they can have the elements that are needed to produce", with the purpose of "generate greater added value with federal growth".

Guzmán stressed that the implementation of the announced regimes will allow "to generate a greater flow of foreign currency, so that there are more dollars and to be able to create more work" by promoting "the transformational role of energy."

Alberto y Guzman

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