Measuring Oil and Gas Ground Rent and the Mechanisms of Its Appropriation in Argentina (1994-2014)

DACHEVSKY, FERNANDO; KORNBLIHTT, JUAN

Jornada; X Jornadas de Economía Crítica; 2017

The purpose of this paper is to present a measure of Argentine oil and gas ground rent and its main mechanisms of appropriation. In spite of the importance of the hydrocarbon sector in Argentina?s economy, few studies have advanced in the examination of the specific problems of ground rent appropriation. The few existing studies are mostly limited to the oil sector and leave out gas production, with partial records and methodological deficiencies. In addition, a hydrocarbon ground rent calculation method is developed here that can be used in a critical approach to other national economies. In accordance with our objective, the first section of our paper is aimed at presenting a qualitative definition of our subject matter, specifying the particular determinations of ground rent that must be considered in order to understand subsequent elaborations. In the second part, we present an estimation of the sector?s profitability based on YPF balance sheets and the main mechanisms of ground rent appropriation. Lastly, in the third section, we present the final estimate, as well as a brief analysis of hydrocarbon ground rent as a share of the economy as a whole. In that section we highlight the fact that ground rent constitutes a significant share of the overall economy, as well as the importance of domestic price regulation as a mechanism of appropriation.