In an effort to revitalize the conventional oil sector, governors of producing provinces have intensified talks with the national government to advance a gradual phaseout of export taxes on crude oil.
The discussions, which include investment commitments from operating companies, aim to counter the decline in production from mature fields and ease the economic impact on communities dependent on the oil industry.
Chubut Gov. Ignacio Torres and Santa Cruz Gov. Claudio Vidal recently met with Cabinet Chief Guillermo Francos and Economic Minister Luis Caputo to outline a framework for tax relief measures.
President Javier Milei later expanded the dialogue, meeting with delegates from about 20 districts at the Casa Rosada to consolidate a unified front that includes labor leaders and executives from the energy sector.
The core of the proposals centers on a gradual elimination of taxes on conventional oil exports, balanced by a reduction in provincial royalties. In these provinces, state-run energy company YPF has halted production in mature fields.
In return, operating companies would be required to reinvest the resulting tax benefits into new exploration and development projects to boost output and stabilize employment across the supply chain.
The negotiations come amid a crisis in Argentina’s traditional oil basins, worsened by disinvestment from major players such as YPF in aging fields, leading to job cuts and declining regional competitiveness.
The affected provinces, heavily reliant on oil revenue, see the reform as a means to attract private capital and strengthen exports in a global market where Argentine crude oil competes amid price volatility.
The economic implications could be significant: increased production would not only bring in additional foreign currency but also drive local development through job creation and infrastructure upgrades in rural areas.
Analysts note that the tripartite pact — involving governments, unions and companies — could set a precedent for other extractive industries, promoting a model of cooperation that prioritizes fiscal sustainability. Negotiators expect an agreement to be finalized in the coming weeks, with a focus on oversight mechanisms to ensure the tax exemptions translate into measurable increases in output.