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Price liberalisation spurs gas-drilling activity in Argentina

A relaxation of wellhead gas-price controls has kick-started gas developments stalled by years of artificially low tariffs and government hostility to the industry, reports Robert Olson

FACED WITH declining gas production and soaring costs for imports, Argentina took action to liberalise gas prices late last year in an attempt to bolster domestic output. The so-called Gas Plus programme, announced in October, lifted price restrictions on gas from new fields, tight-gas deposits and blocks that have been idle since 2004. Argentina relies on natural gas for more than half of its energy needs and demand has been soaring since prices were frozen in 2002. The price caps, which force producers to sell for as little as $0.50/m Btu have been blamed by the industry for a slide in domestic production that has forced the country to grow increasingly reliant on imports. Having peaked a

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