RIO DE JANEIRO, BRAZIL – Argentina wants energy firms to invest some US$5 billion to boost hydrocarbon production and generate jobs in the country’s prized Vaca Muerta shale deposits, as well as bringing in much-needed foreign currency.
The plan unveiled on Thursday, October 15th, aims to replace imports with domestic natural gas production, saving some US$ 5.6 billion, while adding new jobs and reversing the months-long decline in output at Vaca Muerta.
The government expects the plan to help increase tax collection by some US$2.5 billion and a bump up its fiscal balance.
Argentina, which is bracing for a 12% economic contraction this year, has struggled to capitalize on Vaca Muerta, one of world’s largest reserves of shale oil and gas. In the last year, many international companies slowed investments, concerned about the lack of a clear plan for the energy sector, amid a worsening economic crisis.
The stimulus plan means “working to guarantee the gas that Argentina needs to live and to produce, and stop the thinking that we have to import gas,” Argentine President Alberto Fernández said at an event at Vaca Muerta.
The government has previously indicated that producers will need to commit to sustaining or increasing production at 2020 levels, and will be allowed to increase exports outside of the winter period when domestic gas demand is lower.