Argentine Oil Union Paralyzes Vaca Muerta Amid Energy Bill Talks

Argentina’s largest oil union will strike for 24 hours from 8 p.m. today amid tensions between provincial and federal authorities on a proposed energy bill that may cut royalties collected by oil provinces.

About 220 delegates representing 23,000 oil workers from Neuquen, Rio Negro and La Pampa provinces, where the Vaca Muerta shale formation is located, voted to strike, Juan Sandoval, a union spokesman, said in a telephone interview from Neuquen.

The strike was decided at a time when provincial governors and federal authorities are discussing a proposal to replace the 1967 hydrocarbons law, including how to distribute revenue from the world’s fourth-biggest shale oil reserves and second-largest shale gas reserves. While provinces want to keep royalties at as much as 23 percent, the federal government is seeking to impose a 15 percent limit, among other changes.

“Oil workers will stand to defend provincial interests,” Guillermo Pereyra, Neuquen senator and president of the union calling the strike, said earlier today in an e-mailed statement. “The federal government is extorting Neuquen province to impose a bill against the people’s interest.”

YPF SA’s press department declined to comment on the strike.

The striking oil workers are employed by YPF, Chevron Corp., Exxon Mobil Corp., Royal Dutch Shell Plc and Petrobras Argentina SA.

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