Argentina Passes a Controversial Bill to Attract Oil Investment

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Top Story — Looking to take advantage of its vast and mostly untapped shale oil and gas deposits, Argentina’s Congress has passed a controversial bill that will make it easier for foreign capital to invest in the country’s energy sector.

The bill, which had already passed through Argentina’s Senate, drastically lowers the minimum investment needed for companies to avoid import controls and foreign exchange regulations — a serious boon to potential investors. It now moves on to President Cristina Fernández de Kirchner, who is expected to sign the bill into law.

This legislation is the latest effort to draw foreign investment into Argentina’s moribund energy sector. Argentina sits on some of the world’s largest reserves of shale oil and gas, yet spends billions of dollars importing fuel, resulting in a $7 billion energy deficit that is eating away at the country’s foreign reserves.

Argentina’s Vaca Muerta rock formation is said to hold around 23 billion barrels of oil and gas, a figure that could rival Eagle Ford, one of the largest shale gas extraction sites in the United States. The area has already attracted investment from massive companies like Chevron and the world’s largest natural gas extractor Gazprom.

The reforms are expected to triple Argentina’s oil and gas production in the coming decades, and many see the overhaul as a much-needed boost to the country’s failing economy.

Opposition members in Congress, however, are accusing the government of handing national resources to foreign companies with little debate. Additionally, the indigenous Mapuche people that inhabit the Vaca Muerta region are staunchly opposed to hydraulic fracturing or “fracking” — the process used to extract shale oil and gas.

Fracking has been know to contaminate water supplies, contribute to climate change and potentially cause earthquakes. It is also incredibly water-intensive, requiring up to 8 million gallons of water to complete a typical job.

Shale oil extraction has been unpopular with environmentalists in the U.S. and elsewhere, and opposition to fracking has been a growing issue in Argentina.

Headlines from the Western Hemisphere

North America

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  • A Mexican governor confirmed that of the four bodies found Wednesday near the border city of Matamoros, three were the siblings from Texas that have been missing for over two weeks and were shot to death.
  • Mexico’s Supreme Court deemed unconstitutional a proposed referendum aimed at scaling back the country’s move to privatize the state-controlled oil industry.
  • The Huffington Post provides an in-depth analysis of the factors behind the surge of unaccompanied minors crossing Mexico’s border into the U.S., and how U.S. narcotics policy plays a critical role.

Caribbean

Central America

  • Volcano Turrialba in Costa Rica erupted Wednesday night, prompting the issuance of a country-wide emergency alert and evacuation of nearby communities after ash reached all the way to the country’s capital.
  • Professional Costa Rican footballer Keylor Navas, currently a goalkeeper for Real Madrid, said he will take legal action against 24 Costa Rican government agents accused of abusing official databases to obtain information on Navas and his sisters.

Andes

  • Colombia’s FARC guerrillas on Thursday admitted that their operations had inadvertently done harm to civilians in a carefully worded statement that promised the group will take its share of responsibility for casualties and damage.
  • A new study by a Bogota university found that almost half of the FARC’s fighters — nearly 8,000 — were recruited as minors, a war crime under the Geneva conventions, and a practice somewhat common among the country’s other armed groups.
  • Fourteen individuals have been charged in connection with the murder of Venezuelan lawmaker Robert Serra, who was slain with his aide on Oct. 1.
  • InSight Crime takes a look at the “troubling pattern” of corruption in Ecuador — highlighted by several recent arrests of police officials — that could be contributing to the country’s new role as a drug transit nation.

Southern Cone

  • Chilean financial regulators on Thursday issued more fines against a group of investment companies for illegal trading practices, part of a broader scandal that has reportedly undermined confidence in the country’s economy, which has a reputation for low levels of corruption and corporate malfeasance.
  • The first seeds for a new marijuana farm in Chile were planted on Wednesday, part of a new leniency in government policy that has allowed a local nonprofit to grow the drug as a painkiller for Chileans suffering from cancer.
  • Brazil is proceeding with plans to build its own fiber-optic cable to Portugal, making good on its promise to avoid doing business with U.S. technology companies due to revelations of NSA spying on Brazilian political and business leaders.

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