Oil companies leaving Chubut province leave economic gaps, says MP

The Oil Companies Are Leaving. The Towns They Built Are Left to Figure Out What Comes Next

“The impacted are fragmented, the exploiters organised.” That’s how José Glinski, a member of parliament for Argentina’s Chubut province, describes the brutal reality facing his community and others like it, Climate Home News reported. The words land with heavy weight in Comodoro Rivadavia, a city where Argentina’s oil industry began in 1907. For nearly 120 years, oil has been the lifeblood of this city and the entire province, a force that powered a nation. Now, the very companies that built their fortunes there are packing up and moving on, leaving behind an economy that depended on them for generations.

The scale of the retreat is staggering. In Chubut, around 10,000 direct oil jobs have vanished in a single year, pushing the local unemployment rate from a mere 2% to a staggering 10%. And this is happening while the remaining companies in the region continue to rake in what Glinski calls “extremely high levels of profit.” The national oil company, YPF, is emblematic of this shift. Its roots are deep in Comodoro Rivadavia, but it’s now selling off its mature oilfields in the region to concentrate its investments in the shale reserves of Vaca Muerta, further north.

A Question of Power and Profit

As the jobs disappear, a more fundamental question emerges: who pays for the transition? Who will clean up the thousands of old oil wells and the polluted land? Who will support the workers and families left behind? So far, there are few answers. Glinski places the blame squarely on both the corporations and the government that allows them to leave. “Companies are choosing to leave and the government lets them do so, while weakening tax and environmental regulations, leaving the city without the necessary income to organise the transition,” he stated.

Weatherford maximizer oil pumping unit in argentina at cerro dragon oil field chubut province

This isn’t just an Argentine problem. It’s a global phenomenon playing out from Mejillones and Tocopilla in Chile to La Guajira in Colombia and Appalachia in the United States. From Scotland to Mpumalanga in South Africa and East Kalimantan in Indonesia, communities built on the foundation of fossil fuels are facing the same harsh reckoning. As investment flows to new opportunities, plans to protect workers, support communities, and repair the environment are often non-existent or lag far behind the reality on the ground.

“Comodoro, like most territories that developed around fossil fuels, is heavily dependent. Everyone knew the oil business would end, but none planned for it,” said Antonella Risso, a climate expert and community member. “Comodoro deserves a bright future. Its people have the capacity to chart a future for its next hundred years – a real Just Transition.”

The Search for a New Economy

In Comodoro, the people are not passively waiting for the last oil well to run dry. They are actively searching for alternatives. “We have looked into multiple alternatives for the territory, including building on geothermal capacity, an agricultural programme that could reinforce food security and focus on cultures that are not too water dependent, and exploring also aquaculture built on local species,” explained Ruben Zárate, who heads Comodoro Conocimiento, a public agency created by the municipality to develop new economic opportunities. “The only alternative is economic diversification.”

MAÑANA G EN VIVO | José Glinski, diputado nacional por Chubut

But having ideas is one thing; securing the money and political support to make them a reality is another. The core of the problem, Glinski argues, is a massive imbalance of power. Major deals are often struck at the national level or in corporate boardrooms, leaving local authorities with little say and even fewer resources when their primary employer pulls out.

A key example is Argentina’s Large Investment Incentive Regime, known as RIGI, which offers massive tax benefits and regulatory guarantees to major investors. Argentina’s Fundación Ambiente y Recursos Naturales (FARN) has warned that this regime could also give these large projects preferential access to water and energy at the expense of local communities, actively making it harder for regions like Chubut to diversify their economies. “Some of the barriers relate to the absence of regulation of private actors which have negotiated conditions at the national level that prevent provinces or territories from capturing benefits that could be useful to fund the transition,” Glinski said. “Comodoro had no voice in these deals.”

A Global Solution on the Horizon?

With national governments and companies often failing to act, attention is turning to the international stage. Last year in Belém, governments agreed to develop a Just Transition Mechanism. At the upcoming COP31 climate summit in Antalya, they will negotiate the details of how it should work. Civil society is pushing for a strong Belém-Antalya Mechanism (BAM) designed to channel resources directly to the communities that need it most.

“For a city like Comodoro Rivadavia, the BAM could mean support to develop diversification plans, assess viable alternatives, and access public, grant-based finance to put them into practice,” said Camila Mercure, a climate policy officer with FARN and a coordinator of CAN’s Just Transition working group. “Workers and communities must have a meaningful role in shaping these plans, building on local knowledge and priorities. The aim should be to create decent livelihoods beyond fossil fuels and avoid alternatives that reproduce the same economic dependence, inequalities and environmental harm.”

A strong BAM could also foster a global network of support. Officials in Patagonia, northern Chile, Mpumalanga, or East Kalimantan are all wrestling with the same questions. Sharing what has—and hasn’t—worked would prevent them from having to reinvent the wheel. It could also help hold fossil fuel producers accountable, ensuring they cannot avoid their environmental obligations or the towns that depended on them without penalty.

Right now, the transition in Comodoro Rivadavia is happening by necessity, not by choice. It’s unfolding without the community’s consent and with very little support. The window to plan ahead is closing fast. COP31 in Antalya represents a critical opportunity to change that, to help places like Comodoro Rivadavia build their future before the last company leaves, not after the damage is done.

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