Argentina Approves a US$6.4 Billion Vaca Muerta Project in a Single Day of Deals

Argentina's government approved a $6.4 billion oil development project in Vaca Muerta on Wednesday, operated by Tecpetrol, the oil arm of the Techint group chaired by Paolo Rocca. This marks one of the largest private oil developments approved under the regime. The approval comes as the San Juan legislature ratified a $250 million agreement with a copper venture owned by BHP and Lundin Mining, led by Ron Hochstein.

Both the national and provincial agreements offer significant incentives such as reduced corporate tax rates, accelerated depreciation, relief from export duties, easier foreign-exchange access, and protection from future tax changes. The regime, known as Régimen de Incentivo para Grandes Inversiones (RIGI), aims to provide credibility to investments by freezing the rules for 30 years.

The approval of these projects is seen as a major shift in Argentina's macroeconomic picture, with oil exports changing the current account and reordering the map. Argentine mining projects require approval at both national and provincial levels, indicating the broad impact of these investments.