BUENOS AIRES (Reuters) - Argentina will pay the $1.6 billion in subsidies it owes to oil companies that increased natural gas production in 2017 in 30 monthly quotas starting in January 2019, the Energy Ministry said on Tuesday.
The incentive program was implemented in 2013 to attract investment to the South American country’s natural gas sector, but Argentina’s cash-strapped government has struggled to pay subsidies on time since it began. Those delays have grown in recent years, and the government did not make any payments incurred last year.
According to the resolution outlined in the government’s official gazette, state-owned oil company YPF SA is owed $792 million under a formula that takes into account exchange rate movements. Last month, YPF told investors it was owed $780 million in unpaid subsidies corresponding to 2017.
Others eligible for payments include BP Plc’s Pan American Energy, which is owed $163 million, France’s Total SA, which is owed $160 million, Germany’s Wintershall [WINT.UL], which is owed $120 million and Argentina’s Pampa Energia SA, which is owed $91 million.
Energy Minister Juan Jose Aranguren had outlined the government’s repayment plan last month, but had not clarified the exchange rate that would be used to calculate the payments, a source of concern for oil companies given that the peso currency has depreciated substantially since last year.
Reporting by Luc Cohen; Editing by Dan Grebler