ARGENTINA: AN OVERVIEW OF THE ARGENTINE REGULATORY FRAMEWORK AND MAIN CHANGES IN 2012 SCENARIO: REGULATORY PROSPECTS FOR 2013 IN THE LIGHT OF HIGH CONSUMER DEMAND

• Jurisdiction: Derecho Internacional

International Mining and Oil & Gas Law, Development, and Investment
(Apr 2013)
CHAPTER 12C
ARGENTINA: AN OVERVIEW OF THE ARGENTINE REGULATORY FRAMEWORK AND MAIN CHANGES IN 2012 SCENARIO: REGULATORY PROSPECTS FOR 2013 IN THE LIGHT OF HIGH CONSUMER DEMAND
Amalia Sáenz
Partner, Brons & Salas Abogados
Buenos Aires, Argentina

AMALIA SÁENZ chairs the Oil and Gas Law Practice of Brons & Salas and participates in the energy and natural resource practice group of the firm. She joined Brons & Salas in 2005. As a former in-house lawyer at Bridas Energy International Ltd., Turkmenistan, she was in charge of the Legal Affairs Department. Since her return to Argentina in 1998, Amalia has continued working as independent counsel to multinational energy companies. Her practice covers the full scope of energy and oil & gas law with specific focus on acquisition of oil & gas assets and other energy and natural resources projects. She has negotiated joint venture and operation agreements in addition to most industry contracts, and has advised on International Purchase Offers related to oil & gas assets located in Argentina. Currently, Amalia is the Co-Secretary of the Board of the Argentine-Russian Business Council and, as a member of the Association of International Petroleum Negotiators (AIPN), she is part of the Latin American Chapter. In the international field, Amalia has been selected as one of the recognized Argentine Attorneys in the International Who's Who of Oil and Gas Lawyers (2009 through 2011 eds.). Amalia holds degrees in Oil & Gas Law, Universidad de Buenos Aires, 1998, and in Environmental Law, Universidad Austral, 2003. She speaks Spanish, Russian and English. Her publications and presentations include serving as Moderator in the International Unconventional Gas Session RMMLF-IBA International Institute in Rio de Janeiro, Brazil, April 2011; Speaker in Energy Opportunities and Applicable Legal Framework, Bilateral Meeting, Argentine-Russian Governments, [CERAS] Moscow, Russia, March 2011; Co-chair at the AIPN Latin America Chapter Conference The Challenges of the JOA and the Offshore Field Attraction in the Region and Speaker on Enarsa Tender: Terms and Conditions-The implementation of a new path for fresh opportunities in our regional environment, Buenos Aires, Argentina, October 2009; Speaker IBA WIG sessions Glass Ceilings and Compensation Discrimination facing women lawyers - part II, IBA Annual Conference, Buenos Aires, October 2008; and Co-chair at Financing the Mining, Oil and Gas Industry in Argentina, Buenos Aires Stock Exchange, Buenos Aires, Argentina, August 2008.

I. INTRODUCTION:

When looking back to the first days of January 2012, no rational person would have bet that there would be so many changes in the Argentine oil & gas industry in only one year. Nevertheless, changes were essential to encourage the exploration, exploitation, refining, transportation and commercialization of hydrocarbons and fuels throughout the territory.

There were two main reasons why changes were vital for the Argentine oil & gas industry: (i) The decline in Argentine hydrocarbons production leading the country to depend upon energy imports; and (ii) The introduction of a new trend unconventional resources- as a way to ensure self-sufficiency in hydrocarbons.

Whether the oil & gas scenario has changed over the past year remains to be seen. At this time, new policies and incentives intended to attract international investments still continue to be a matter for debate. Although new regulations were laid down, supplementary regulations may be necessary for developing this new and promising trend.

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A. Argentina's Oil & Gas Market.

Before considering the new regulatory framework, it is important to note that Argentine energy supply derives from fossil resources: oil (34%) and natural gas: (51%). Also, energy consumption has been about 3.4% over the last 50 years. In the last decade energy demand has boosted to 5.1% per year.

In turn, over the past years, local natural gas demand has been constantly increasing at an average rate of 4%, while average annual natural gas production has declined by 3.08%. Growing demand drove the increases in natural gas consumption to a record-high level in 2012. According to abeceb.com, in 2012 natural gas imports amounted to almost 4 billion dollars, a 60% increase. In 2013, imports from Bolivia are expected to reach 2,166 billion dollars, and 3,394 billion dollars for liquefied natural gas. Everything leads to assume that imports from Bolivia will increase by 44 %, while imports of liquefied natural gas will grow 36%.

Before 2008, almost all of Argentina's natural gas imports came from Bolivia. More recently, Argentina has diversified its supply sources...