Non-conventional oil and gas exploitation agreement in Vaca Muerta

ARTICLE
Non-conventional oil and gas exploitation agreement in Vaca Muerta

The Argentine President announced the agreement reached with the province of Neuquén, the companies and unions of the activity.

February 2, 2017
Non-conventional oil and gas exploitation agreement in Vaca Muerta

On Tuesday, January 10, 2017, the head of the Executive Branch announced an agreement between the National government, the province of Neuquén, oil companies and unions of the activity – the Private Oil and Gas Union of Río Negro, La Pampa and Neuquén, and the Hierarchical and Professional Staff of Private Oil and Gas of Neuquén, Río Negro and La Pampa- for non-conventional oil and gas exploitation at the Vaca Muerta field in the province Of Neuquén.

As part of the agreement, the province of Neuquén undertakes not to apply new taxes as well as those that were in suspense, and to participate together with the National government in an investment and infrastructure development program; the National government commits to eliminating taxes to the sector; and the oil companies commit to initiate an investment process that will reach the sum of five thousand million dollars in the first year.

The Secretary General of the Private Oil and Gas Union of Río Negro, La Pampa and Neuquén, Guillermo Pereyra, informed that the agreement would modify certain working conditions of employees in the sector, including the following:

• Elimination of "travel hours", meaning that the time the employees spent traveling between their homes and the wells would no longer be paid.

• Reduction of work teams.

• Expansion of maneuvers to night time to avoid dead time.

• Diagram 2 × 1, meaning that employees would have one day of rest for every two days worked, instead of one day of work and one day of rest as it is today.

• Operation at surface level without working limit in the event of wind and when working high up,  a wind limit of 60 kilometers per hour.

• Operations of two or more service companies in the same location operating at the same time.

• Working day of eight hours from Monday to Friday for operative and maintenance tasks that do not include weekends and holidays.

Such modifications will affect 1,200 sector employees, and will be implemented by signing an agreement that will be made during the following days, and will enter into force prior to approval by the Argentine Labor, Employment and Social Security Ministry.