ARGENTINA OIL & GAS THE NEW SHORT LAW AND BEYOND

• Jurisdiction: Derecho Internacional

Mining and Oil and Gas Law, Development, and Investment - Book 2
(Apr 2007)
CHAPTER 21A
ARGENTINA OIL & GAS THE NEW SHORT LAW AND BEYOND
Francisco J. Romano
General Counsel
Chevron Argentina SRL
Buenos Aires, Argentina

Domain and Jurisdiction

Law 17, 319 "Hydrocarbons Law"

• Deposits of liquid and gaseous hydrocarbons belong to the patrimony of the State

• National Government is granted the power to establish the national policy and regulate all matters related to the exploration, production, transportation and marketing of hydrocarbons

Law 24,145 "Federalization of Hydrocarbons Law"

• Maintains status quo until new Hydrocarbons Law is passed by Congress

• Provinces may grant permits and concessions over relinquished areas.

[Page 21A-2]

Constitutional Amendment of 1994

• Section 124: Provinces have the original ownership of resources existing in their territories

• Need to distinguish "ownership" from "jurisdiction"

• Jurisdiction i.e. power to regulate still with Federal Congress (Constitution Section 75)

• Permits and concessions are still governed by Hydrocarbons Law 17,319

Supreme Court Case "Total v. Province of Tierra del Fuego" of 9/8/2003

• Only federal state may levy taxes on offshore areas beyond 3 miles from coast, regardless of ownership rights

Decree 546/2003

• Provinces may grant permits and concessions provided they fulfill the conditions set forth in law 17,319

• All permits and concessions already granted shall remain under national jurisdiction until a new hydrocarbons law is passed by Congress

[Page 21A-3]

The Short Law

• Liquid and gaseous hydrocarbons fields located in the Republic of Argentina and its Continental Shelf belong to the inalienable and indefeasible domain of the Federal State or the Provinces, depending on the territory in which the same are located.

• Ratifies that jurisdiction over the fields transferred by virtue of the Short Law remains with the Federal Government.

• The exercise of their powers as Granting Authority by the Federal State and the provincial States shall be always in accordance with the Federal Hydrocarbons Law No 17,319 and its complementary regulations and in accordance with the provisions of the Federal Hydrocarbons Agreement.

• This bill perfectly allocates the power to legislate in connection with hydrocarbon resources, recognizing that National Congress has the original power to establish rules and regulations as set forth in the National Constitution, whereas the Provinces shall exercise their right of ownership and administration according to the Federal Law and the regulations enacted thereunder. (Letter...