Argentina Moves to Allow Higher Prices for New Gas Discoveries
From Fox Business
YPF Chief Executive Miguel Galuccio hailed the news, unveiled Wednesday by Argentine President Cristina Kirchner, saying it will help fund the company’s ambitious five-year exploration and production plan as well as make YPF more attractive to foreign investors.
“This opens a new perspective for developing gas in Argentina. All the gas projects that we plan to launch this year now become very attractive for investors,” Mr. Galuccio told reporters.
The government will begin paying YPF $7.5 per million British thermal units, more than three times what YPF charged for its gas last year.
Roberto Baratta, who helps oversee energy policy at Argentina’s planning ministry, said the higher price is good news for everyone in the energy industry, including international firms such as Apache Corporation (APA), Germany’s Wintershall AG and others.
The new price is much higher than prices granted under Argentina’s older “gas plus” plan that attracted investment from firms such as Apache and paid around $4 or $5 per million Btu.
“This is very good news for all companies interested in the sector,” Mr. Baratta said in an interview. “It’s good news for the country.”
Mrs. Kirchner said she wants “all energy companies in Argentine to formalize contracts similar to the contract the federal government signed with YPF.”
She said raising prices will help Argentina reduce an energy deficit of around $3.5 billion by encouraging companies to explore and extract more.
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