MercoPress. South Atlantic News Agency

Argentine oil provinces request floor price to ensure employment

Argentina’s oil and gas producing provinces are requesting from the Buenos Aires a floor price for hydrocarbons to ensure income from royalties for their weakened budgets.

The grouping, Ofephi, led by the Patagonia province of Chubut has proposed a 47 US dollars floor price for crude extracted in Argentina, no matter the international price.

Another request from the hydrocarbons producing provinces is that the federal government ensures the promised investments at real value, to guarantee job stability and dampen the growing labour unrest mainly in the most southern Patagonian provinces.

Neuquen’s Hydrocarbons and Energy director Alex Valdez said the purpose was to assess the current situation in the energy sector taking into account the international crisis, which has reflected domestically in a falling demand for fuels.

“We want to find ways to minimize impact on fiscal revenue” said Valdez who acted as spokesperson for the group which is made up of Neuquen, Tierra del Fuego, Santa Cruz, Rio Negro, La Pampa, Salta, Mendoza, Jujuy and Formosa.

An article from Cronica, Chubut, close to the provincial government, points out that “for many provincial officials and operators from the private sector the current situation demands that the federal government reimburses some of the revenue collected at times when with export taxes, it kept the difference between domestic prices and until a few months ago soaring international values”.

The main issue is to find a compensation system that allows retaining the current level of employment.

According to Cronica there’s a primary understanding with Buenos Aires to liberate employers social security contributions on that sector of jobs that have been contracting because of the falling hydrocarbons exploration and exploitation investments.

The provinces’ grouping is collecting information from the different operators in the industry to have an idea of a minimum commitment to support current activities.