BUENOS AIRES Jan 10 Argentina has clinched a
deal with labor unions and energy companies aimed at luring
investors to the Vaca Muerta shale formation in Patagonia, one
of the largest unconventional reserves in the world, the
government said on Tuesday.
As part of the pact, the country will offer a subsidized
price of $7.50 per million British thermal units of natural gas
produced at new wells through the year 2020. The government
issued a statement calling the subsidized price "indispensable
for attracting long-term investment".
Vaca Muerta has drawn investment from Chevron Corp
and Exxon Mobil Corp. But the shale formation,
which is about the size of Belgium, remains largely unexplored.
Neuquen province, where most of the formation is located,
agreed to stabilize taxes as part of the deal and labor unions
have signed onto more flexible contracts. Strikes are common in
Argentina, where relations between unions and management are
often strained by high inflation.
"This is a day that will open the energy future of our
country," President Mauricio Macri said in a televised address.
"We have to give guarantees and provide certainty in order to
The government also subsidizes locally produced oil to
encourage domestic production. But employment in the sector had
been affected by an increase in fuel imports spurred by world
crude prices that are well below local prices.
(Reporting by Nicolas Misculin; Editing by Meredith Mazzilli)