Vista Energy joins Milei's RIGI investment incentive scheme

Vista Energy, headed by former YPF CEO Miguel Galuccio, last week formalised its application to join the RIGI (Régimen de Incentivo para Grandes Inversiones) incentive scheme for major investments.

The firm has pledged to plough US$5.8 billion into drilling 336 wells in over 10,000 hectares of the northern reaches of Vaca Muerta shale deposits with the aim of producing a daily 50,000 barrels of oil – almost a third of the company’s current total production.

The Bandera Norte area where Vista proposes to operate has no supporting infrastructure at present so that the investment would also cover supplying that, including pipelines to transport the oil and gas, a compressor plant and other necessary works. Vista has been operating in Vaca Muerta since 2017 and has grown to become the country’s leading exporter of crude oil, having already invested almost US$7 billion into the Neuquén shale deposits. Over 70 percent of its total daily output of over 160,000 barrels is exported.

Vista decided to expand its Vaca Muerta activities last February when the Middle East conflict sent world oil prices soaring from US$60 per barrel into treble digits. Around the same time the government raised the floor for entry into RIGI from US$200 billion to US$600 billion for the energy sector.

RIGI was created in 2024 to lure major investments into Argentina with a combination of tax breaks, Customs rebates and a favourable exchange rate over a 30-year period. Since then it has become the main source of financing for Vaca Muerta.

The incentives include the reduction of corporate tax from 35 to 25 percent, the payment of IVA value-added tax with fiscal credit certificates, the possibility of computing the cheque tax as a credit against corporate tax and an exemption from import tariffs and export duties. Perhaps the benefit most valued abroad is gradual access to a free exchange rate for export earnings with 20 percent in the first year, 40 percent in the second and total liberation in the third but before then the company must have invested at least 40 percent of the pledged sum.

Vista are not the only people interested in Vaca Muerta – on the same day as their application, approval of Pampa Energía’s proposal to invest US$4.52 billion into expanding their oil production was published in the Official Gazette. Pampa Energía, which is headed by Marcelo Mindlin, proposes to focus on export markets under the Peelp (Proyectos de Exportación Estratégica de Largo Plazo) scheme for long-term strategic export projects.   

– TIMES/AGENCIES