Argentina Clinches Deal For Shale Investment

Argentina clinches deal for shale investment Fast FT Read next Lombard Kate Burgess Supermarkets’ festive recipe offers foretaste of full-year sales 3 HOURS AGO Twitter Facebook LinkedIn EmailPrint this pageSave 6 HOURS AGO by: Benedict Mander President Mauricio Macri is pushing to revamp flagging production at Argentina’s massive shale reserves, with companies agreeing on Tuesday to invest as much as $15bn a year in exchange for lower labour costs and extended state subsidies. The drive to increase investment and productivity in the Vaca Muerta shale deposit in Patagonia, which boasts the second largest reserves of shale gas in the world, is part of Argentina’s attempt to recover energy self-sufficiency and emulate the shale boom in the US, reports Benedict Mander in Buenos Aires. Mr Macri said a “new era” was beginning for the country’s languishing energy sector, which will see foreign companies including Chevron, Dow, BP, Shell and Total, as well as Argentina’s state energy company YPF, invest an initial $5bn in 2017, rising to $15bn in subsequent years. Although once a net exporter of energy, a lack of investment in recent years has seen production plummet, leaving Argentina with a costly energy deficit and dependent on imports that have placed heavy pressure on fiscal accounts. In return for the investment commitments from the private sector, the national government committed to extending a subsidy being gradually phased out that enables companies to sell gas for three times the international price, with the local price currently fixed at $7.5 per million BTU. Mr Macri also announced the elimination of a 15-year-old export duty on oil and oil products. Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web. Twitter Facebook LinkedIn Email