Argentina has hiked the tax rates on its oil and natural gas concessions, a planning ministry spokeswoman said Thursday, with the rate for production rising 720%.
Argentina's President Nestor Kichner issued a decree on Wednesday authorizing an increase of 720% in the concession tax rate on production, which is based on the concession acreage a company has in production and is paid in advance at the start of each year.
From Wednesday, the new annual tax rate for production is Argentinian Pesos 3,444.87 ($1,089.61)/sq km, compared with the prior rate of Pesos 419.50/sq km, which had been in place since 1991.
Producers must pay the higher tax for any concession acreage held in 2007, meaning that by December 31, 2007, companies must make up the difference between the new tax and what was paid under the old tax rate at the start of this year.
Increases were also made to rates for exploration concessions.
The tax is paid to the provinces or the national government, depending on ownership of the resources. For the most part, the provinces control resources within their territories and the national government has most of the country's offshore acreage.
Among other taxes, oil companies also pay up to 12% in royalties on production of oil and gas at the wellhead and a 25%-45% tax on oil and gas exports.
Argentina produces 660,000 b/d of oil and 140 million cu m/d of gas, exporting up to 20% except during times of peak demand when more product is fed to the domestic market. The biggest producers are units of Spain's Repsol YPF, US-based Chevron, Brazil's Petrobras, France's Total and the UK's BP.
Argentina's President Nestor Kichner issued a decree on Wednesday authorizing an increase of 720% in the concession tax rate on production, which is based on the concession acreage a company has in production and is paid in advance at the start of each year.
From Wednesday, the new annual tax rate for production is Argentinian Pesos 3,444.87 ($1,089.61)/sq km, compared with the prior rate of Pesos 419.50/sq km, which had been in place since 1991.
Producers must pay the higher tax for any concession acreage held in 2007, meaning that by December 31, 2007, companies must make up the difference between the new tax and what was paid under the old tax rate at the start of this year.
Increases were also made to rates for exploration concessions.
The tax is paid to the provinces or the national government, depending on ownership of the resources. For the most part, the provinces control resources within their territories and the national government has most of the country's offshore acreage.
Among other taxes, oil companies also pay up to 12% in royalties on production of oil and gas at the wellhead and a 25%-45% tax on oil and gas exports.
Argentina produces 660,000 b/d of oil and 140 million cu m/d of gas, exporting up to 20% except during times of peak demand when more product is fed to the domestic market. The biggest producers are units of Spain's Repsol YPF, US-based Chevron, Brazil's Petrobras, France's Total and the UK's BP.
