Argentina Upstream Fiscal and Regulatory Report - Reduced Royalty Offered for First Offshore Round
Summary
The changes to the fiscal regime and the reforms implemented under the administration of President Macri have improved the investment climate for the upstream hydrocarbon sector. However, despite having suspended controls on domestic crude oil prices in September 2018, the government has been forced to reintroduce an export tax as a result of Argentina’s current currency crisis. At the same time, the government wants to go ahead with increasing gas prices for final consumers to improve the attractiveness of the hydrocarbons sector for prospective investors, but this may face opposition from Parliament. On top of this, in November 2018, Argentina opened Argentina Offshore Round 1 through which 36 blocks are on offer across three different basins.
“Argentina Upstream Fiscal and Regulatory Report ─ Reduced Royalty Offered for First Offshore Round”, presents the essential information relating to the terms which govern investment into Argentina’s upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Argentina’s upstream oil and gas investment climate.
Scope
Reasons to Buy
Summary
The changes to the fiscal regime and the reforms implemented under the administration of President Macri have improved the investment climate for the upstream hydrocarbon sector. However, despite having suspended controls on domestic crude oil prices in September 2018, the government has been forced to reintroduce an export tax as a result of Argentina’s current currency crisis. At the same time, the government wants to go ahead with increasing gas prices for final consumers to improve the attractiveness of the hydrocarbons sector for prospective investors, but this may face opposition from Parliament. On top of this, in November 2018, Argentina opened Argentina Offshore Round 1 through which 36 blocks are on offer across three different basins.
“Argentina Upstream Fiscal and Regulatory Report ─ Reduced Royalty Offered for First Offshore Round”, presents the essential information relating to the terms which govern investment into Argentina’s upstream oil and gas sector. The report sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Argentina’s upstream oil and gas investment climate.
Scope
- Overview of current fiscal terms governing upstream oil and gas operations in Argentina
- Assessment of the current fiscal regime’s state take and attractiveness to investors
- Charts illustrating the regime structure, and legal and institutional frameworks
- Detail on legal framework and governing bodies administering the industry
- Levels of upfront payments and taxation applicable to oil and gas production
- Information on application of fiscal and regulatory terms to specific licenses
- Outlook on future of fiscal and regulatory terms in Argentina.
Reasons to Buy
- Understand the complex regulations and contractual requirements applicable to Argentina’s upstream oil and gas sector
- Evaluate factors determining profit levels in the industry
- Identify potential regulatory issues facing investors in the country’s upstream sector
- Utilize considered insight on future trends to inform decision-making.
Table of Contents
1 Table of Contents1.1. List of Tables
1.2. List of Figures
2. Regime Overview
3. State Take Assessment
4. Key Fiscal Terms
4.1. Royalties, Bonuses, and Fees
4.1.1. Bonuses
4.1.2. Royalty
4.1.3. Rental Fees
4.2. Extraordinary Income Levy (Where Directly Negotiated)
4.2.1. Neuquén Province
4.2.2. Mendoza Province
4.2.3. Santa Cruz Province
4.2.4. Salta Province
4.3. Export Duty
4.3.1. 2018 Export Tax
4.3.2. Previous Export Duties
4.4. Federal Direct Taxation
4.4.1. Corporate Income Tax (CIT)
4.4.2. Deductions and Depreciation
4.4.3. Withholding Tax
4.4.4. Capital Gains Tax
4.5. Provincial Taxation
4.5.1. Turnover Tax
4.5.2. Stamp Duty
4.5.3. Property Tax
4.6. Indirect Taxation
4.6.1. Value Added Tax
4.6.2. Customs Duties
4.6.3. Corporate Social Responsibility Payments
4.7. Incentives
4.7.1. Gas Plan Incentives (Gas Plan I & II Ended, Gas Plan III Active)
4.7.2. Stimulus Program for the Export of Escalante Crude Oil Surplus (Ended)
4.7.3. Investment Promotion Scheme for Hydrocarbon Production (Ended)
4.7.4. Promotional Scheme for Hydrocarbon Exploration and Production (Ended)
4.7.5. Oil Plus (Repealed on July 13, 2015)
4.7.6. Gas Plus (Not Available Any Longer from 2016)
4.7.7. Stimulus Program for Crude Oil Production (Ended)
4.7.8. Special Regime for Tierra del Fuego, Antarctica and South Atlantic Islands (Ended)
5. Regulation and Licensing
5.1. Legal Framework
5.1.1. Governing Laws
5.1.2. Contract Type
5.1.3. Title to Hydrocarbons
5.2. Institutional Framework
5.2.1. Licensing Authority
5.2.2. Regulatory Agency
5.2.3. National Oil Company
5.3. Licensing Process
5.3.1. Argentina Offshore Round 1 Bid Criteria
5.3.2. Argentina Offshore Round 1: Bidders Qualification
5.3.3. Argentina Offshore Round 1: External Guarantee
5.3.4. Onshore Acreage
5.4. License Terms
5.4.1. Duration and Relinquishments
5.4.2. Area
5.4.3. Work Obligation
5.4.4. Domestic Market Obligation (DMO)
5.4.5. Transfer of Interest
5.5. Local Content
5.6. Profit Repatriation
6. Outlook
7. References
7.1. Contact Us
7.2. Disclaimer
List of Tables
- Table 1: Regime Overview
- Table 2: Argentina, Royalty Framework, Argentina Offshore Round 1
- Table 3: Argentina, Rental Fees, From October 31, 2014 Onward
- Table 4: Argentina, Rental Fees, From 2007 to October 31, 2014
- Table 5: Argentina, Rental Fees, Prior to 2007
- Table 6: Argentina, Neuquén Province, Extraordinary Income Levy Rates (%), 2008 YPF Extension
- Table 7: Argentina, Mendoza Province, Extraordinary Income Levy Rates (%), 2010 Law
- Table 8: Argentina, Mendoza Province, Chañares Herrados Concession, Extraordinary Income Levy Rates (%), 2011
- Table 9: Argentina, Salta Province, Extraordinary Income Levy Rates (%), 2012 YPF Extension
- Table 10: Argentina, Additional Export Duty Rates, August 2004
- Table 11: Argentina, Oil Export Duty Rates Below US$80/bbl, From October 22, 2014 to December 31, 2014
- Table 12: Argentina, Gas Plan II - Subsidized Prices
- Table 13: Argentina, Gas Plan - Subsidized Prices, Resolution No. 46-E/2017
- Table 14: Argentina, ‘Oil Plus’ Tax Credit for Production Rates
- Table 15: Argentina, ‘Oil Plus’ Tax Credit for Reserves Rates
- Table 16: Argentina, Provincial Regulatory Agencies
- Table 17: Argentina, Provincial Oil Companies
- Table 18: Argentina, Argentina Offshore Round 1, Working Units Tables (Value of the WU = US$5,000)
- Table 19: Argentina, Argentina Offshore Round 1, Financial Requirements
- Table 20: Argentina, Argentina Offshore Round 1, Technical Requirements
- Table 21: Argentina, Argentina Offshore Round 1, License Duration
- Table 22: References
List of Figures
- Figure 1: Regime Flow Chart
- Figure 2: Argentina, Indicative NPV10/boe, IRR and State Take Comparison, Regional
- Figure 3: Argentina, Legal Framework
- Figure 4: Argentina, Institutional Framework
