Argentina governor vows to maintain floor price for local crude
The head of Argentina's Neuquén province said he "will not allow" internal market oil prices in Argentina to be coupled with international benchmarks.
State-run news outlet Neuquén Informa reported Governor Omar Gutiérrez as making the comment after a meeting with President Mauricio Macri and energy and mining minister Juan José Aranguren.
At the meeting, Gutiérrez said that Argentina must maintain a floor price for locally produced crude in order to sustain E&P investment, particularly in the Vaca Muerta shale formation, and that it must extend price incentives for natural gas output as well.
Despite the governor's pledge, oil companies operating in the country have already said they expect to receive lower prices from refiners over the coming months, as the national government aims to return the local energy sector to market-based pricing.
Argentina-focused oilfield services firm Eco-Stim Energy Solutions cited "deterioration in international oil prices and the uncertainty relating to the sustainability of subsidized oil prices" as negatively impacting earnings during the third quarter.
The CFO of national oil company YPF, Daniel González, said the 51% state-owned firm expects to receive an average price from refiners of US$52-53/b this year, versus US$67.5/b in 2015.
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