Export credits issued to producers in Argentina that increase reserves and production under the new Oil Plus program will be able to be sold to exporters at the nominal value of the credit, an official from a producing company in Argentina told BNamericas.
"The Oil Plus program will issue export credits to any company that increases production and reserves. These credits will be transferable and exporters will have to buy them from the companies that have them at the nominal value of the credit," said the official, who has seen the legislation.
"There are seven companies that export in Argentina including Repsol YPF (NYSE: REP), Petrobras (NYSE: PBR), Shell (NYSE: RDS-B), Pan American Energy, Occidental (NYSE: OXY) and Tecpetrol," the executive said.
"There are another 40 producers that will be eligible to receive credits. The only thing they have to do is invest more to increase production and reserves."
The credits can then be used by exporters to pay export retention taxes implemented by the government to control domestic oil prices.
"The credits can be sold to the seven exporters that will have to buy them because there are a lot less credits than the total amount of retentions paid to the government," the official added.
"This is an incentive for every company that wants to increase production and reserves in Argentine," according to the official.
"Sometimes people complain before they see the actual legislation and allow the project to work, but it is in the interest of everyone that the program works. It's the first incentive given to the industry in seven years."
Some local producers in the country have expressed concern the export credits would not be able to be sold at the nominal value after the Oil Plus program was announced.
The actual legislation has yet to be published in the country's official gazette and a spokesperson for Argentina's planning ministry would not comment on the matter when contacted by BNamericas.
The official said the legislation would be published in the gazette soon.
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