Six eyeing tax credits under Neuquén conventionals reactivation scheme

Six upstream companies have presented plans under a conventional hydrocarbons reactivation program launched by Argentine province Neuquén.

Approved plans will attract fiscal benefits in the form of tax relief. The average sought is 43% of committed investment, which would be credited against provincial taxes on gross income.

The firms – YPF, Oilstone, Tecpetrol, Vista Oil & Gas, Pluspetrol and GeoPark – are targeting 10 areas in the jurisdiction, home to the biggest chunk of the Neuquina basin. The province’s energy ministry has around 25 days now to analyze the companies' proposals. 

Associated investment is over US$10mn and focuses on interventions at 93 wells as well as abandonment and other work, the provincial government said in a statement.

YPF is targeting blocks Chihuido de la Sierra Negra, Octógono and Al Norte de la Dorsal, while Oilstone plans to reactivate Cerro Bandera, Anticlinal Campamento and al Sur de la Dorsal. Tecpetrol, Vista Oil & Gas, Pluspetrol and GeoPark each plan work at one block: Los Bastos, Coirón Amargo Norte, Centenario and Aguada Baguales, respectively.

Introduced last quarter, Neuquén’s program is designed to recover levels of output of conventional hydrocarbons and incentivize development of the province’s resources. Chubut and Río Negro provinces have already launched incentives programs to boost oil production. Mendoza province has introduced a similar scheme.

Crude output in Neuquén was 29,180m3/d in May, up from 28,910m3/d in April, with conventionals accounting for 19.5%.

Conventionals production in Neuquén has been trending down since at least 2010, while shale output began growing apace from early 2014. That year, congress approved sweeping changes to existing hydrocarbons legislation in a bid to boost development of the country's vast shale oil and gas deposits.