Page 16 - LatAmOil Week 48 2020

LatAmOil BRAZIL LatAmOil

Last December, cash-strapped Petrobras said it Marlim cluster of oilfields.
was planning to sell $20-30bn worth of assets, The sell-offs and other cost-cutting meas-
including eight Brazilian refineries, between ures are predicted to boost the company’s equity
2020 and 2024. value by roughly 45% by 2021. However, the
Since then, it has also announced plans to pandemic has raised questions about the sched-
unload major upstream assets, including the uling of some divestment programmes. ™

ARGENTINA
Oil-rich Mendoza Province

seeking more investment

ARGENTINA’S oil-rich Mendoza Province is gas industry. “There are more than 200 wells that
keen to revive investors’ interest in the petro- were working last year and are now halted. The
leum sector, which has languished as a result idea is to grant incentives to oil companies that
of the coronavirus (COVID-19) pandemic, by hire services from SMEs in Mendoza,” he said.
granting tax benefits to companies that resume Mendoza, a largely untapped western region
drilling work or start new projects. that possesses heavy crude oil reserves, is Argen-
To this end, the provincial senate has tina’s fourth-largest oil-producing province.
approved plans to reimburse upstream oper- Local authorities said in September that they
ators for some of their expenses. More specifi- were looking at a new contract model in an
cally, it passed a bill that provides for companies effort to draw more investment to local fields.
to receive tax credits of up to 40% of their out- They are now reviewing proposals for estab-
lays, up to ARS800mn ($9.81mn). lishing a system of permanent licensing rounds
That bill is now ready to be signed into law, to replace the old method of calling auctions
according to local press reports. Once it takes periodically for a set number of blocks and then
effect, oil and gas developers will be able to use picking winners based on the best bid.
the benefit until the end of December 2023 to Mendoza is home to about 40% of Vaca
offset income taxes and royalties. The provin- Muerta, one of the world’s largest shale forma-
cial government said in a statement last week tions. It borders Neuquen Province, the centre of
that the new measures might attract between development operations in Vaca Muerta, which
ARS571mn ($7mn) and ARS2.07bn ($25.4mn) contains around 308 trillion cubic feet (8.72 tril-
worth of new investment within the next year. lion cubic metres) of shale gas, according to the
Enrique Vaquié, Mendoza’s economy and US Energy Information Administration (EIA).
energy secretary, said he hoped the bill would Several international majors – including Royal
ensure the completion of partially drilled wells Dutch Shell (UK/Netherlands), Total {France),
and encourage new drilling programmes, ExxonMobil (US), Chevron (US) and a subsidi-
while also giving a boost to the province, which ary of BP (UK) – are among the firms now work-
derives one quarter of its GDP from the oil and ing in Vaca Muerta. ™

About 40% of Vaca Muerta lies within Mendoza province (Photo: File)

P16 www. NEWSBASE .com Week 48 03•December•2020