(Alliance News) - President Energy PLC said Thursday that Decree 566, limiting realizable prices for oil producers in Argentina, has expired effective today and prices have returned to normal.
The oil and gas company said government of Argentina issued a time limited Decree 566 at the end of August. The Decree restricted the price of oil obtainable by producers "by way of both artificially fixing the Brent reference price and the dollar-peso conversion rate governing payments by offtakers," the company said.
President Energy said the decree "has now expired without at this stage being supplemented or replaced". Prices receivable by the company from its offtakers have normalized from Thursday, and are calculated at the same basis as before the Decree implementation.
The company said prices returning to normal means an immediate increase of USD9 to USD10 per barrel in the realization prices received by the company, representing an increase of approximately 20%.
On current values this means a current realization price of approximately USD53 per barrel for its core Rio Negro production, President Energy noted.
Brent oil was trading at USD63.02 a barrel in London on Thursday.
President Energy Chair Peter Levine said: "Whilst the incoming government in Argentina, have for understandable reasons yet to provide their vision, action plan for the oil industry, President is cautiously optimistic as to the future oil prices, particularly taking into account the very negative effect Decree 566 had on the industry as a whole and the prevalent generally accepted view by all sides that the health of the oil industry is important to the Argentine economy as a whole as it seeks to stabilize and improve."
Leftist Peronist candidate Alberto Fernandez was elected president of Argentina late last month, together with his running mate, ex-president Cristina Kirchner, who will be his vice-president. Fernandez assumes power on December 10.
President Energy shares were up 10% in London at 4.35 pence each on Thursday.
By Loreta Juodagalvyte; loretajuodagalvyte@alliancenews.com
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