The Argentine government has signed an agreement to eliminate oil royalties on conventional oil to revitalize the country's mature basins. This initial memorandum was formalized with the province of Chubut, but the national government is committed to progressively extending it to all other producing jurisdictions, including Mendoza, Santa Cruz, Neuquén, and Río Negro. The need for this measure stems from the decline of conventional oil, whose production has fallen to 34% of the national total (in 2020 it represented 75%). Only in the San Jorge Gulf Basin was a year-on-year decline of 6.1% registered in production. This new scheme aims to revitalize mature basins through a plan of 'shared efforts' between the Nation, provinces, and companies. The National State has committed to eliminating royalties on conventional crude oil to reduce the tax burden. In turn, the provinces must ratify and deepen the review of royalties and fees to support competitiveness. Companies are committed to maintaining production and implementing necessary investment plans to reactivate equipment and wells. The main objectives of this pact are the revitalization of mature basins and the improvement of operational efficiency, while also prioritizing the preservation of direct and indirect employment in the sector. This initiative is part of the Milei government's policy to reduce the tax burden on energy production and exports, seeking to encourage new investments under 'clear and predictable rules'.
