Government announces draft law to encourage investment in hydrocarbon exploration

This Ministry of Hydrocarbons and Energy release was published using machine translation.

The Minister of Hydrocarbons and Energy, Franklin Molina, announced the presentation of a draft bill to promote the exploration and exploitation of hydrocarbons, strengthen YPFB in this specific area and establish the necessary mechanisms to encourage investment by private companies.

The draft bill will be presented in the coming weeks and will focus on the reactivation of the hydrocarbon sector (…). “Our objective is to boost both production and the replacement of reserves, thus ensuring the sustainability of a vital sector for our country and guaranteeing its energy security,” said the authority.

He explained that the project portfolio of the Upstream Reactivation Plan 2021-2025 (PRU) also requires a renewed institutional framework. It is crucial that the regulatory framework adapts to today's new reality.

Along these lines, he indicated that the proposed scheme for new investments in hydrocarbon projects must guarantee investing companies a quick return on their investments, while providing the country with a flexible framework to expedite the process.

In other words, according to Molina, new exploration and exploitation projects must be able to be executed quickly, since the financial indicators of profitability in each of these will allow a quick return to the companies that are partners of the country.

Likewise, the authority said that it is essential that the administrative cycle of contract management be more expeditious and that YPFB has the ability to partner for the development of specific projects.

Investment in the oil sector requires a period of between 8 to 10 years due to the nature of the projects, which have a long maturation period. Within all these opportunities that are being visualized, the results of the efforts carried out by YPFB will only be materialized in the years 2027, 2029 and, in some cases, until 2030, he stated.