Neuquen province's legislature ratified a deal for 15 oil and gas companies to prefinance up to $177.6 million in road works across Vaca Muerta's producing core.
The law, passed this week with 22 votes in favor and 8 against, endorses an agreement between the companies and the administration of Gov. Rolando Figueroa to pave or repave about 160 kilometers of provincial routes 7, 8 and 51, which carry much of the traffic to the fields of Vaca Muerta, one of the world's largest shale plays. The operators will put up the money as an advance on future royalties, which in Argentina are paid to the producing province rather than the federal government.
Three Routes Around Anelo
On Route 8, the works are split into two sections: about 90 km will be paved between Crucero Catriel and the junction with the Camino de la Tortuga, and the stretch between the Route 7 junction and the Route 51 roundabout will be repaved.
On Route 7, crews will repave 15 km between the Rio Negro provincial border and the junction with Route 8, where a roundabout will also be built. That stretch runs through the urban area of San Patricio del Chanar.
On Route 51, 40 km will be paved and repaved between the Route 8 junction and the Route 17 crossing, south of Anelo, the town that serves as Vaca Muerta's main service hub. Lawmakers from the governing bloc said during the debate that the works are meant to ease traffic into Vaca Muerta and relieve Route 7, currently the main access road to the fields around Anelo.
Royalty Deductions and Tolls Repay the Advance
Disbursements will be made as works certificates are presented, provincial legislator Damián Canuto, one of the lawmakers who presented the bill, said during committee review. The province will carry out the works under the companies' supervision, and the money will be paid into a special account administered by Fiduciaria Neuquina S.A., the provincial trust administrator.
The companies will be repaid starting 30 months after each disbursement, through deductions against future royalties or through tolls to be installed on all three routes.
On the royalty side, each company may deduct up to 20% of what it owes each month, making repayment gradual. The funds involved are royalties owed to Neuquen province that have not yet been paid. Each company's contribution was set according to its acreage and production.
Opposition Questions the Lack of Private Capital
Floor debate centered on the financing mechanism. Legislator Darío Peralta argued the companies could have paid for the works outright from the "windfall gains" generated by higher crude prices. Along the same lines, César Gass objected that the "private sector puts in no capital" beyond advancing funds that will later be returned. Francisco Lépore backed the structure as dollar financing at a "zero rate."
The Signatories and Next Steps
The 15 signatories are YPF, Argentina's state-controlled oil and gas company; Pan American Energy (PAE), Argentina's largest private oil producer; Chevron, the U.S. energy major; Pluspetrol, an Argentine independent oil and gas producer; Total Austral, the Argentine subsidiary of France's TotalEnergies; Vista Energy, an independent Vaca Muerta-focused producer; Pampa Energía, a diversified Argentine energy company; Wintershall Dea, whose Argentine business was acquired by U.K.-based Harbour Energy in 2024; Shell; Phoenix Global Resources, a Vaca Muerta producer backed by commodity trader Mercuria; GeoPark, a Latin American oil and gas producer active in Vaca Muerta; Continental Resources, the U.S. shale company; Tecpetrol, the Techint Group's exploration and production subsidiary; and Compañía de Hidrocarburo No Convencional and Compañía de Desarrollo No Convencional, two special-purpose companies tied to Chevron's partnership with YPF.
The province has already launched the tender for the detailed engineering of the works on routes 8 and 51. A second stage calls for further improvements on Route 7, on the stretch from Route 8 to Route 5, north of Anelo.