The National Government made official the creation of a special regime for oil exports with which it seeks to increase the trade surplus by improving the conditions of strategic sectors.
It is an initiative that Serge Massa he proposed to Alberto Fernandezand that he had anticipated in his first press conference as Minister of Economy. The signing of the decree that was published this Tuesday in the Official Gazette remained.
“It is established that they will be considered beneficiaries of the ‘Foreign Exchange Access Regime for Incremental Oil Production’ (RADPIP) and of ‘Foreign Exchange Access Regime for the Incremental Production of Natural Gas’ (RADPIGN) created by Titles I and II of Decree No. 277/22, the subjects registered in the Registry of Oil Companies -Production Section-, who are holders of hydrocarbon exploitation concessions granted by the National State, the Provinces or the Autonomous City of Buenos Aires, as appropriate; previous fulfillment of the requirements demanded in this decree and its complementary norms”, reads article 1 of the Decree 484/2022.
“The beneficiaries and the beneficiaries may, for the purposes of promoting the necessary investments to increase the production of the hydrocarbon areas under its ownership, present themselves jointly with other legal entities, which will be considered as associated third parties as long as they comply with the precautions required in this decree and its complementary regulations and prove irrefutably a contractual link with the beneficiary or the beneficiary of at least 12 months, with a minimum investment of USD 50,000,000, in the terms established by the Enforcement Authority”, it was clarified. In this regard, it was added that “Associated third parties will access the benefit of the aforementioned regimes in the percentage of incremental production reported by the beneficiary or the beneficiary, and approved by the Enforcement Authority, each time the recognition of the benefit is requested”.
Those who are beneficiaries of the official regime may request recognition of the corresponding benefits as of the third quarter of 2022. The same must be requested within the peremptory period of 15 business days after the end of each quarter. In this framework, it will be the Ministry of Energy and the Federal Administration of Public Revenues (AFIP) that will implement complementary measures so that the process of recognition of the benefit concludes in a period not exceeding 90 calendar days from the end of the quarter for the which is requested.
The Secretary of Energy will then issue a certificate to the AFIP and the Central Bank.
“In order to define the Base Line corresponding to the RADPIP, Crude oil production corresponding to the period from January to December 2021 is considered as such.both inclusive, coming from the areas owned by the beneficiary or the beneficiary”, was established in Article 3.
The beneficiaries of the aforementioned regime “must increase their purchases and contracts with National and Regional Suppliers as of December 2024 by 30% for the items of drilling and completion and by 40% for the items of production and maintenance and works and surface installations on the percentage of composition of the expense of the year 2021″.
With respect to the definition of the RADPIGN Baseline, “the volumes defined in the first paragraph of article 12 of Decree No. 277/22 corresponding to the period from January to December of the year 2021, both inclusive, will be considered as such.” “The approval of the fiscal measurement must be carried out by the corresponding Enforcement Authority and by the National Gas Regulatory Entity (ENARGAS)”, was specified in the decree that bears the signatures of Alberto Fernández, Massa and the chief of staff, Juan Manzur.
In the recitals, the Government explained that “it is in the general interest to ensure the supply of natural gas and crude oil to the domestic market”, but that the country “has a recurring deficit in the energy trade balance, where imports of gas and diesel mainly explain the import basket of our energy sector, so it is necessary to actively deal with this problem. And that both regimes establish “an appropriate regulatory framework so that hydrocarbon producers have the rules of access to foreign currency necessary to promote investment in the sector, to later enable the industrialization of natural gas, crude oil and its derivatives.”
Hydrocarbon exports are on the rise: in the first semester they increased by more than 300% and more than 600% in the case of gas in the province of Neuquén. One of the incentives for the sector was the high international prices of crude oil, which, although in the last week they have been below USD 100 dollars per barrel, continue to be high and profitable prices for unconventional operations.