Argentina

Investment & Operational Criteria

Key Indicators

Risk Premia

8.125

%

Outlook

Uncertain

Rating

BB|3S|§

Ranking

55

Reserves (1P)

Total

mm boe

Oil

5

%

Summary

The Fernandez administration increased taxes on foreign trade, further tightened capital controls, and pulled back from former President Macri’s fiscal austerity measures, expanding fiscal expenditures. Citing a need to preserve Argentina’s diminishing foreign exchange reserves and raise government revenues for social programs, the Fernandez administration passed a sweeping “economic emergency” law that included a 30% tax on purchases of foreign currency and all individual expenses incurred abroad.

Updated

May 18, 2021

Country Basics

Region

Americas - South

Reserves (1P)

Oil

mm bbl

Gas

bcf

Location

ArgentinaArgentina

Southern South America, bordering the South Atlantic Ocean, between Chile and Uruguay.

Outline

Tax Regime
Type

Multiple (PSC/Concession)

Tax Regime
Notes

Royalties on the production of hydrocarbons must be paid every month to the relevant province or to the national government. The Hydrocarbons Law provides for a 12% royalty on the net price obtained from the sale of hydrocarbons produced under exploitation concessions and a 15% royalty on the net sales of hydrocarbons produced under exploration permits. Royalties can be reduced by up to 50% in tertiary production (enhanced oil recovery and improved oil recovery), extra heavy oil and offshore projects that, owing to their particular productivity issues and location, present especially unfavourable technical and economic characteristics.

Investment & 
Operational
Climate

The COVID-19 pandemic, on top of Argentina’s two-year economic recession, has compounded the country’s economic woes. Current International Monetary Fund (IMF) predictions have Argentina’s GDP declining close to 12% in 2020. The poverty rate and inflation are both over 40%. Since 2017, the official exchange rate has fallen from ~ US$1:AR$20 to ~ US$1:AR$80, and the unofficial “blue” rate is double that. The Argentine government’s 2020 agreement with private bondholders to renegotiate billions of dollars of debt offers some hope as negotiations get underway to renegotiate another US$45 billion owed to the IMF.

Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.

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Americas - South

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