Argentina wants energy firms to invest some $5 billion to boost hydrocarbon production and generate jobs in the country’s prized Vaca Muerta shale play, as well as to bring in much-needed foreign currency.
The plan unveiled on Oct. 15 aims to substitute natural gas production for imports, savings some $5.6 billion, the government said, 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 $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 and 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.
Energy scholar Robert Bryce offers an unabashed view of the shale revolution, climate change and the future of energy. Spoiler alert: don’t expect oil and gas to disappear anytime soon.
Separately, the EIA projected U.S. natural gas output would decline for a third month in a row to 81.8 Bcf/d in November. That would be down over 600 MMcf/d from its forecast for October.
U.S. President Donald Trump said Sept. 25 he had extended a ban until 2032 on oil drilling off the coast of North Carolina and Virginia, weeks after a similar extension affecting offshore drilling.