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Argentine Governors Said Seeing Tax Breaks for Oil Rigs

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June 27 (Bloomberg) -- Argentine provincial authorities are pushing for tax cuts to be included in an energy bill covering the country’s nascent shale oil and gas industry, three officials briefed on the matter said.

The governors of 10 provinces with oil and gas reserves agreed to request the elimination of a 35 percent levy on imports of rigs and other machinery before agreeing to the federal government’s proposed reform, the provincial officials said, asking not to be named as discussions are private. Provinces also want royalties to be based on global benchmarks rather than the price set by the federal government, they said.

The demands are part of federal-provincial talks on replacing a 1967 hydrocarbons law with rules for distributing revenue from the world’s fourth-biggest shale oil reserves and second-largest shale gas reserves. The bill would end political tensions derived from unclear regulations for both shale and offshore resources and lure more investors to Vaca Muerta, a Belgium-sized formation in the country’s south.

“All I can say is that all the actors are participating in the writing of the draft,” Horacio Mizrahi, spokesman for federal Planning Minister Julio De Vido, said by phone from Buenos Aires. “We prefer not to comment while negotiations between all parties involved are going on in a civilized way.”

Chubut Governor Martin Buzzi, who heads a committee of the 10 provinces, and Neuquen Governor Jorge Sapag weren’t available to comment, their respective assistants said.

While the provinces are prepared to reduce their taxes and the participation of provincial companies in projects, they want the same benefits stipulated in a July decree imposed for a venture between YPF SA and Chevron Corp. to be extended to all companies, the officials said.

To contact the reporter on this story: Pablo Gonzalez in Buenos Aires at

To contact the editors responsible for this story: James Attwood at Robin Saponar

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