Argentina cuts oil export tax

Jan 07, 2013 12:00 AM

Argentina has unveiled a new system of export taxes on oil shipments that will cut levies as the government seeks to lure investment to revive stagnant production.

The change means energy companies will receive $70 per barrel of exported oil, up from $42 previously. Argentina controls the price of oil exports in order to guarantee domestic supply. Until now the state kept the difference between the international price for Argentine crude - currently between $80 and $90 per barrel - and the reference price of $42. The reform means that the state will only retain the difference between the market prices and $70, meaning increased revenue for oil companies that export crude.

Energy analysts said the measure, which was published in the government's Official Gazette, will have the most benefit for Argentina's Pan American Energy (PAE). PAE, in which Britain's BP holds a 60 percent stake, is the South American country's biggest oil exporter, shipping 2.3 million cubic meters of crude between January and November 2012. Argentina only exports about 10 percent of its crude. France's Total and China's Sinopec will also benefit from the government's export tax overhaul.

Argentina's President Cristina Fernandez nationalized the country's largest energy company, YPF, last year and has made boosting production a top priority in a bid to stem rising imports.

Analysts said the announcement was part of a series of measures aimed at luring investment, especially in the country's vast shale resources. A U.S. Department of Energy report shows Argentina holds more natural gas trapped in shale rock than in all of Europe - a 774-trillion-cubic-feet bounty that could transform the outlook for Western Hemisphere supply.

'In order to get the industry moving, you have to have decent prices,' said independent analyst Victor Bronstein. 'This gives a stimulus to investment and allows the oil industry to recover.' In November, the government said wellhead natural gas prices would rise to $7.50 per million British Thermal Units (BTU) from about $5 per million BTU previously. Argentina's average daily oil output fell 4.3 percent in October from the same month a year earlier, according to the latest report by the private Argentine Institute of Oil and Gas (IAPG). Natural gas production fell 5.3 percent.

Market Research

The International Affairs Institute (IAI) and OCP Policy Center recently launched a new book: The Future of Natural Gas. Markets and Geopolitics.


The book is an in-depth analysis of some of the fastest moving gas markets, attempting to define the trends of a resource that will have a decisive role in shaping the global economy and modelling the geopolitical dynamics in the next decades.

Some of the top scholars in the energy sector have contributed to this volume such as Gonzalo Escribano, Director Energy and Climate Change Programme, Elcano Royal Institute, Madrid, Coby van der Linde, Director Clingendael International Energy Programme, The Hague and Houda Ben Jannet Allal, General Director Observatoire Méditerranéen de l’Energie (OME), Paris.

For only €32.50 you have your own copy of The Future of Natural Gas. Markets and Geopolitics. Click here to order now!


Upcoming Conferences
« June 2018 »
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30

Register to announce Your Event

View All Events