With the creation by law of its own hydrocarbon company, called “Terra Ignis Petróleo y Gas”, a public limited company with majority state participation, the province of Tierra del Fuego will seek to enter the oil market by giving value to its own natural resources, according to authorities from the Fuegian government explained.
The project promoted by the management of Governor Gustavo Melella was sanctioned by the Provincial Legislature on June 16, with the unanimous vote of the provincial deputies present, after having been analyzed for several months in committee meetings.
Once the norm is promulgated by the Executive Power, and the initial steps related to legal registration and capitalization are taken, the company will follow the line of those already formed in other hydrocarbon provinces, such as Neuquén and Chubut, detailed the spokespersons consulted.
To do this, Terra Ignis will seek to associate with private capital to undertake the joint exploitation of onshore and offshore deposits, initially with small investments and in relation to wells that are already in operation.
In turn, the company was authorized to provide public services for the distribution of natural gas and to venture into the generation of renewable electricity.
“The province has seventy years of history in the hydrocarbon industry, so this company was necessary as a way to enter an economic sector that we could not access otherwise,” the province’s Secretary of Hydrocarbons explained to Télam. Alexander Aguirre.
The official mentioned that the company’s strategy will consist of climbing positions by first forming small business units aimed, for example, at improving low-productivity wells.
“In some provinces there is already the figure of recovery companies. It is estimated that in Tierra del Fuego there are about 500 inactive or deficient wells. The idea is to analyze them through a job that could be financed by funds from the Federal Investment Council (CFI). , and in some cases propose an intervention to raise productivity with joint gain,” Aguirre said.
“The province has seventy years of history in the hydrocarbon industry, so this company was necessary as a way to enter an economic sector that we could not access otherwise”Alexander Aguirre
The possibility of venturing into the production of “green energy” from hydrogen, for which the province already has the development of a business model, or of engaging in works to lay natural gas networks, are options that are also they are on the radar of the corporation created by the province.
“Obviously we have to get involved in job creation. The idea is to grow in capital and associate ourselves little by little in larger-scale activities, such as the exploration or operation of some area that is not of interest to other companies,” analyzed the official.
According to its creation law, the company will be a public limited company with an initial share capital of $300 million, of which the province will subscribe 90% and the remaining 10% will belong to the Fuegian Collection Agency (Aref).
The Executive Branch was empowered to prepare and approve the corporate statute, while it was also defined that the province can never have a shareholding of less than 51%.
✅ Today in the Provincial Legislature, two fundamental bills were approved for the province: the creation of the provincial hydrocarbon company Terra Ignis and the increase in employer contributions to continue strengthening the Social Work of the Fuegian State. pic.twitter.com/Y6eGlauWCI
— Government of Tierra del Fuego AIAS (@GobiernoTDF) June 16, 2022
The oil company will be directed by a board of five members, three appointed by the Executive and two by the Legislaturewhile the company will not be governed by the contracting and financial administration regime of the State, and the controls will be in charge of trustees and private external audits or commissioned to the Court of Accounts of the province.
The company was also exempted from the payment of stamp tax and Gross Income, as well as all fees, contributions or tariffs related to its incorporation.
In addition, the law stipulates that at least 70% of the company’s profits that correspond to the province must be allocated to “the sustainable management of the province’s natural resources, especially those of high environmental value, and to carrying out works of infrastructure related to the fulfillment of sustainable development objectives”, the application of dividends to current expenses is prohibited.
In the short term, Terra Ignis will form its board and then “the procedures for registration before the General Inspection of Justice (IGJ) will begin before making the capitalization disbursements,” explained the Fuegian Secretary of Hydrocarbons.
For Governor Melella, the company means “a historic step for the expansion of the productive matrix and to defend the natural resources that belong to the Fuegian men and women.”
“We are convinced that a new horizon of opportunities and challenges is opening up. Our province will once again have a central role in the management of its resources and this will allow it to generate jobs and growth,” the president said in official statements.
