# Mendoza Reforms Oil Law to Boost Vaca Muerta Investment New legislation updates concession rules and royalty structures to accelerate regional hydrocarbon development. - **Source:** [Clarín](https://www.clarin.com) - **Published:** 2026-11-11 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/90fd7da1-baa1-4638-9279-b00cb20cf9f5 ## Legislative Overhaul in Mendoza Mendoza has officially replaced its 2006 oil law to better align with the development of the Vaca Muerta formation. The new legislation, sanctioned by the provincial legislature, explicitly incorporates the reconversion of concessions to non-conventional regimes. This move aims to attract significant capital to revitalize the province's hydrocarbon sector. ## Strategic Focus on YPF YPF is currently conducting an exploratory campaign in Malargüe to evaluate the potential of the formation. Company president Horacio Marín and Governor Alfredo Cornejo announced plans to submit a project to the Large Investment Incentive Regime, known as RIGI, by 2027. This strategy seeks to unify operational areas for efficiency. ## Modernizing Concession Frameworks The updated law replaces the outdated Law 7526, which previously failed to distinguish between conventional and non-conventional concessions. By aligning with national legislation, the new framework allows for the reconversion of existing assets without requiring a new bidding process. This administrative change streamlines operations for companies currently active in the region. ## New Royalty Bidding Model The province has overhauled its royalty structure for future tenders. Instead of a fixed 12% rate, companies will now compete based on a 15% reference point, allowing for adjustments. Adjudication will prioritize committed investment levels and projected production volumes, ensuring that the fiscal terms reflect the specific operational maturity of each field. ## Incentives for Mature Fields Article 29 of the new law empowers the executive branch to offer royalty rates below 5% for mature fields. This targeted incentive aims to reactivate dormant wells and encourage secondary recovery techniques. The government believes these measures will make previously non-profitable projects economically viable for operators in the current market. ## Expanding Exploration Beyond YPF Beyond YPF’s operations, provincial authorities have identified significant non-conventional potential in blocks held by companies like Quintana Energy-TSB and Tango. Lucas Erio, the Director of Hydrocarbons, confirmed that administrative work is underway to facilitate these reconversions. The goal is to broaden the scope of exploration across multiple private sector players. ## Economic Rationale for Reform The primary driver behind these changes is the lack of profitability in certain existing projects. By lowering fiscal barriers, the province hopes to unlock production that has remained stagnant. Officials emphasize that the new royalty scheme is designed to balance operational costs with the necessary incentives to stimulate long-term industrial growth. ## Future Outlook for Development The integration of Mendoza into the Vaca Muerta development cycle represents a major shift in regional energy policy. With the 2027 RIGI target, the province is positioning itself as a key player in Argentina's energy future. Success will depend on the ability to attract sustained investment through these new regulatory tools. ## Sources covering this story - https://www.clarin.com/energia-y-mineria/mendoza-adapta-ley-petrolera-atraer-inversiones-acelerar-desarrollo-vaca-muerta_0_toNiQzywjt.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._