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Oil report

Argentina readies gas plan to spur Vaca Muerta production

BUENOS AIRES, Oct 14 (Reuters) - Argentine President Alberto Fernández is readying a sweeping plan to encourage local producers to increase natural gas production, the government said on Wednesday, hoping to ramp up output from the country’s massive Vaca Muerta shale formation.

Fernández will travel to the remote region, thought to house one of the world’s largest unconventional oil and gas reserves, to officially present the plan on Thursday, the energy secretariat said in a statement.

“The aim of the plan is to encourage the growth of gas production in the coming years,” it said, adding the scheme would also push to involve more small firms, boost job numbers and increase value in the domestic production chain.

Argentina’s energy sector activity has plummeted this year due to the coronavirus pandemic and the fall in the international price of oil, which has hit higher-cost unconventional production particularly hard.

The government, which is battling falling levels of foreign reserves, said an increase in local production should cut energy imports, leading to “savings in dollars and a consequent improvement in the fiscal situation of our country.”

The government has previously indicated that producers will need to commit to sustaining or increasing production at 2020 levels, and will be allowed to increase exports outside of the winter period when domestic gas demand is lower. (Reporting by Eliana Raszewski Writing by Adam Jourdan; Editing by Tom Brown)

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