14 - Local Content and Sustainable Development in Argentina

Summary

Argentina has a long history in oil and gas that spans more than a hundred years of oil production and more that seventy years of natural gas. The development of this industry has mirrored the country’s political and economic volatility throughout its history. Nonetheless, a relevant supplier base that dominates an intermediate level of technology in international standards has developed over the decades.

In 1994, the country carried out a constitutional reform that significantly affected the context under which the oil and gas sector operates. The ownership of the natural resources of the subsoil passed from the national government to the provincial governments. This switch in responsibility took many years, until in 2007 the provinces became fully responsible of their natural resources and therefore started to legislate over the hydrocarbon industry and administrate the resources provided by them. Local content policies were part of these laws elaborated by the provinces.

Within this new reality, the provinces experienced a learning process that is still in progress. This chapter expands on the description and analysis the regulations and implementation of local content policies in Argentina’s most important oil-producing provinces. It deals as well with the evaluation of local content initiatives at the national level which show significant limitations regarding the institutional arrangement governing the oil and gas resources.