In the Omnibus Law that the Government sent to Congress there is a particularly dedicated chapter hydrocarbon sector. This commitment is understandable, given that the authorities expect a lot from the energy sector investments to increase exploration and production and from now on, for the amount of dollars that this may generate in the coming years.
There are several articles that are dedicated to highlighting that there is freedom to carry out the activity and above all to they have currencies.
For example, article 258 of the bill says that “authorization holders and concessionaires will have control over the hydrocarbons they extract and, consequently, will be able to transport, market, industrialize and market their derivatives freely, according to the regulations issued by the Supervisory Authority.
The executive power will not be able to intervene or fix marketing prices in the internal market at any stage of production.
In case of state-owned companies (such as YPF), I am They can only sell at prices that reflect the competitive balance of the sector, this at the corresponding export or import parities, as the case may be. Permit holders, concessionaires, refiners and/or marketing operators will be able to freely export hydrocarbons and/or their derivatives, according to the regulations that will be issued by the Executive, which will establish the conditions for their effective entry into force.
Moreover, The oil sector has managed not to change the rate of export withholdings that govern today. In this sense, article 204 states: “Maintain the validity of export rights currently in force for hydrocarbons and mining”. Although the Executive Power has reserved the power to modify this rate, being able to bring it to a maximum of 15%, provided that this increase is based on a technical report to be prepared by the Ministry of Economy.
As regards the concessions for the exploitation of unconventional oil, the project states: “It is established that the new Concession for the Unconventional Exploitation of Hydrocarbons must have as its main objective the Unconventional Exploitation of Hydrocarbons. Despite this, the holder of the themselves will be able to develop complementary activities for the exploitation of conventional hydrocarbons”.
And he adds: “The holders of a concession for the exploitation of unconventional hydrocarbons, who are in turn holders of an exploitation concession adjacent to and pre-existing the first, can request the unification of both areas into a single non-conventional exploitation concession. conventional, provided that the geological continuity of said areas is reliably demonstrated. This request must be based on the development of the pilot project envisaged in the previous paragraph and will apply to the unified zonal payments to the State that correspond to the area that provides for them to a greater extent in amount and duration of the shorter concession.”
There is a specific article that refers to tenders upon expiry of the concession. This could aim to avoid, for example, a province granting an extension of a concession several years before its expiry.
It is article 277: “Article 47 bis of Law no. is incorporated. 17.319 on Hydrocarbons, according to the following text: “Existing exploitation concessions, upon expiry of their term, They cannot be awarded without a new tender document.. The relevant tender may be carried out with a minimum period of one year before their expiry. If the subject of the tender to be called is the granting of a concession for the exploitation of areas in production, the specifications and conditions must establish the value corresponding to the investments not recovered during the exploitation of the area. The bidder may include this value when submitting the bid in order to continue the exploitation of existing wells. In this case, said value will be recognized to the holder of the expired concession. If the bidder does not include the value mentioned in his offer, he will not be able to exploit the existing wells.”
A single entity to regulate the electricity and gas markets
The bill also provides for the creation of the National Gas and Electricity Regulatory Body, which will unify the task currently carried out separately by the National Electricity Regulatory Body (ENRE) and the National Gas Regulatory Body (Enargas).
In the initiative, sent by the Executive for discussion during the extraordinary session, it is specified that “until the establishment of the new body, the current ENRE and Enargas will continue to exercise their respective functions”.
Specifically, article 316 of Section V of Chapter IX establishes the creation of the “National Regulatory Body for Gas and Electricity, which once established will replace and assume the functions of the National Regulatory Body for Energy electricity (ENRE), established by article 54 of law no. 24.065, and the National Gas Regulatory Body (Enargas), established by article 50 of Law no.
On the other hand, the initiative called “Bases and Starting Points for the Freedom of Argentines” also promotes the transposition of environmental legislation in the field of hydrocarbons.
“In order to comply with the absolute net greenhouse gas (GHG) emission targets committed by the Republic of Argentina in the nationally determined contributions under the Paris Agreement, the National Executive has the power to assign emission rights for GHG emissions of greenhouse gases towards each sector and subsector of the economy compatible with the achievement of the greenhouse gas emissions objectives undertaken by the country for 2030 and subsequent periods?, supports article 320.
Furthermore, the Executive has the power to annually establish limits on greenhouse gas emission rights, compatible with the committed objective, of annual and mandatory compliance for all entities in the public and private sector.
Hearings to define tariff increases in the gas sector are scheduled for January 8th.
Source: Clarin
