Argentina cuts restrictions to lure shale oil investment

BUENOS AIRES, July 15 Mon Jul 15, 2013 10:22am EDT

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BUENOS AIRES, July 15 (Reuters) - Argentina will allow oil companies to export tax free up to 20 percent of the crude and natural gas they produce in the country, the government said on Monday in a bid to attract investment in Argentina's vast Vaca Muerta shale oil field.

Export revenue of companies that invest at least $1 billion over five years will also be exempt from the foreign exchange controls that have been imposed by the government, according to an announcement in the government's official daily gazette.

Those controls along with other government regulation of Latin America's third-biggest economy have scared foreign investors, particularly after President Cristina Fernandez ordered the seizure of the country's main oil company YPF from Spain's Repsol in 2012.

Companies that explore Vaca Muerta and export from the field would be allowed to keep their earnings in foreign exchange outside the South American country, a benefit denied to other companies that are required to repatriate their earnings.

The relaxation in regulations comes as the government is soon expected to sign a $1.5 billion Vaca Muerta exploration deal with U.S. oil company Chevron.

Oil companies that benefit from the new regulations will be allowed to renew their concessions for a 25-year period, with a possible 10-year renovation after that.

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