Argentina governors: Domestic oil prices must be maintained

Argentina's government must not lower domestic oil prices in the face of dropping global prices, according to the governors of the country's 10 hydrocarbon producing provinces, known collectively as Ofephi.

The governors met in capital Buenos Aires to determine their stance, following a decision by OPEC to maintain current production of 30Mb/d, even as global prices continue to fall.

"It's important to sustain current internal crude prices in order to not compromise the national strategy," Chubut provincial governor Martín Buzzi was quoted as saying in a government release.

The country has prioritized the reversal of production declines and a return to energy self-sufficiency, as outlined in a package of oil and gas reforms passed in October.

State news agency Telam quoted Buzzi as saying that local oil and gas investment plans depend on maintaining current internal market values of US$83/b for Medanito crude and US$67-US$68/b for Escalante crude.

OPEC's daily basket price stood at US$68.13/b on Tuesday.

Buzzi cited past decisions by Argentina to keep internal prices artificially low when global prices ranged from US$109-US$140.

Neuquén provincial governor Jorge Sapag said that the stance was decided on internally among Ofephi members, and that Ofephi planned to discuss the matter with the national government and with private oil companies operating in the country.

National oil company YPF attributed a 152% year-on-year increase in its Q3 net income, in part to a government decision to increase fixed domestic oil prices.

Neuquén leads the provinces in oil production and is home to the Vaca Muerta shale formation, considered the most promising unconventional reserve outside of North America. Neuquén produced 562,476m3 of oil in September, up from 543,797m3 in September 2013.