The national government established the requirements and conditions that the Vaca Muerta oil companies they must comply to access the benefits of the old Chevron decree (929/2013) that allows exporting a percentage of production, without withholdings and with free access to foreign currency. However, it included an ambiguous article that could mean an outflow of dollars for the country.
Through Resolution 26/2023, recently published in the Official Gazette, the Nation approved the procedure that companies must follow to access the benefits of the founding decree of Vaca Muerta, 929/2013: perIt allows exporting 20% of gas and oil production with a 0% withholding rate and with free access to the foreign currency generated (see details below).
There are only two projects that enjoy this benefit in Vaca Muerta and are operated by YPF, Loma Campana (Chevron) y The Bitter Girl (Petronas). They were approved from September and November of last yearrespectively, and without retroactive, despite the fact that they had complied with the requirements of the decree four years ago.
- 20%
- of production with 0% withholdings and with free access to foreign currency for these sales is the benefit promoted by the decree.
Precisely the new government resolution included the figure of retroactive, that it was not in the permits that were applied for Loma Campana and La Amarga Chica. It is part of what the Minister of Economy, Sergio Massa, negotiated in the tour he did in Houston last year with the aim of attracting new investment.
«Provision of 20% of production: those beneficiaries who have projects approved at the time of issuance of the resolution that approves this Annex, may include 20% of the production that has accumulatedfrom the third or fifth year as appropriate, counted from the implementation of their respective projects and up to the monthly period prior to the application for the benefit”, says article 4.2.1 of Annex I, of Resolution 26/2023.
In other words, it means that the government formalized a mechanism -at least legally- thatwhich is presented as a new and potential outlet for dollars, at a critical time of lack of foreign currency for the country. Now the companies will be able to claim for what they were not paid since they had met the requirements until the moment the regulations were approved.
Now companies could request the State -for example- to allow them to export 20% of retroactive production, with free availability and without retentions. Although it would be the percentage corresponding to the period in arrears, with market values at that time, the outflow of dollars would be now.
It will be necessary to see if it is an article that will be fully applied or notAfter all, Decree 929/2013 was not respected as it was established.
For practical purposes, what the executive ends up negotiating with the companies may vary, since you will be able to argue the periods where you guaranteed a differential price that of the international market to sustain the local industry (Creole barrel and stable price in pandemic). The concrete thing is that the regulations left companies an open door to claim, which did not exist before.
The scope of retroactive
For now, the article could be applied to the two mentioned projects that include Loma Campana and La Amarga Chica, in Vaca Muerta.
These are the two oil areas shale most productive of Vaca Muerta. According to the latest available data, Loma Campana pumped some 75,400 barrels a day and La Amarga Chica another 42,000 barrels a day.
If the retrospective is applied, it would not be on the current production, but on the percentage of production corresponding to previous periods.
The requirements to access the benefits
To be able to export without withholding and with free access to foreign currency, companies must meet a series of requirements. Among the most important, it stands out that only companies that have projects that contemplate the income of foreign currency for more than 250 million dollars in three years.
And only after the fifth year will they be able to freely export 20% of their gas and oil production with the export rate of 0%.
In the industry it is known as the Chevron Decree, and was the founding regulation of Loma Campana, the oil area shale more important Vaca Muerta and YPF.
It was in September of last year -one of the first measures endorsed by the Minister of Economy, Sergio Massa- cWhen the provisions of the regulations began to be executed in the block in which Chevron participates.
Something similar happened in La Amarga Chica, where the Malaysian Petronas is. Only in November of last year did he begin to have the benefits, after having met the requirements in 2018.
As established in Annex I of the regulations that approved the procedure, The companies that comply with the aforementioned must submit to the Secretary of Energy a form with a series of technical data including: the number of the resolution that approved the project that motivates the request, the volume of production, and the volume that would be exported.
The benefit must be requested at least 30 days before the scheduled export date, otherwise it will not be processed. Also, The term for the presentation of the information must be between 1 and 10 days.
Once submitted, the national authorities will verify the information submitted and will be the ones who oversee that the corresponding volumes are exported.
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