December 23, 2016 / 7:11 PM / a year ago

Argentine oil and gas workers union sees new labor pact soon

BUENOS AIRES, Dec 23 (Reuters) - Argentine energy companies and their employees should have a new labor contract next month that could reduce uncertainty for potential investors in the sector, a key labor group leader told Reuters on Friday.

Labor strikes are common in Argentina, where companies are pressured to raise wages amid inflation that is expected to end the year at around 40 percent.

Labor volatility is a key issue for the investors needed to tap the Vaca Muerta shale formation in Neuquen province, one of the largest unconventional reserves in the world.

“The negotiations are done. All that’s left are bits and pieces like the amount of investments that the companies will make and the level where gas prices will be fixed,” said Guillermo Pereyra, secretary general of the Oil and Gas Workers Union in the Patagonian provinces of Neuquen, Río Negro and Chubut.

Vaca Muerta has attracted investment from Chevron Corp and Exxon Mobil Corp. But the shale formation, which is about the size of Belgium, remains largely unexplored.

“We’ve done our part,” Pereyra said. “I‘m sure the deal will be closed in the first half of January.”

The talks include labor unions, Argentina’s government and energy company representatives. None of the negotiators for the companies agreed to comment on the record.

“The agreement is going to get signed. The talks have advanced quite a bit,” an oil company executive said on condition of anonymity.

Argentine Energy Minister Juan Jose Aranguren told reporters earlier this month that he expected a deal soon.

“An area where Argentina can attract massive investments is Vaca Muerta,” he said.

Employment in the sector had been affected by an increase in fuel imports, spurred by world crude prices that are well below local prices. The government subsidizes locally-produced oil to encourage domestic production.

Argentina produces an estimated 716,000 barrels of oil per day, according to the U.S. Energy Information Agency. The country has been a net oil importer since 2010. (Reporting by Juliana Castilla; Editing by Paul Simao)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below