Argentina's Ambitious Energy Reform: Cutting Subsidies, Boosting Investments

Argentina is cutting energy subsidies by $2.7 billion to reduce its fiscal deficit. The reform package includes a new hydrocarbon law, investment guarantees, and changes to the foreign exchange system. The country aims to boost domestic oil and gas output, reduce costly imports, and attract foreign investment.

Argentina has cut $2.7 billion in energy subsidies in the first seven months of the year, according to Energy Secretary Eduardo Rodriguez Chirillo. This is part of a broader government effort to reduce the fiscal deficit and implement an ambitious reform package.

The South American nation is focusing on boosting domestic oil and gas production to replace expensive energy imports. State-owned YPF is constructing an oil pipeline from the Vaca Muerta shale region, which will have an initial capacity of 350,000 barrels per day in 2024, expanding to over 700,000 barrels per day by 2028.

Addressing energy business officials in Houston, Rodriguez Chirillo mentioned that Argentina achieved a $2.9 billion energy trade balance surplus between January and July. He emphasized the importance of allowing investors to design their own models and securing the right to export, aiming for significant production growth in the sector.

(With inputs from agencies.)