PARTNERING WITH NATIONAL OIL COMPANIES - ARGENTINA

• Jurisdiction: Derecho Internacional

International Mining and Oil & Gas Law, Development and Investment
(Apr 2009)
CHAPTER 14A
PARTNERING WITH NATIONAL OIL COMPANIES - ARGENTINA
Arturo Pera
General Counsel
Total Austral, S.A.
Buenos Aires

Arturo A. Pera is the General Counsel since 1998 of TOTAL AUSTRAL S.A., subsidiary of TOTAL S.A., international oil & gas group. He has broad expertise in practically all kind of agreements, performed in an international atmosphere, centered in oil and gas business and the fishing industry, including joint ventures, oil and gas operating agreements, farm ins and outs, financing contracts, drilling contracts, pulling and work over contracts, housing contracts, export contracts, share transfer agreements, corporate matters, legal affairs related to governmental agencies, arbitration and litigation, dealing with both scopes of interests. Mr. Pera previously served as in-house lawyer for A.Evangelista & Cia S.A. from 1974-1980, senior lawyer for Bridas S.A.P.I.C. from 1980 to 1986 and its legal manager from 1986 to 1996. He was Assistant Professor of Roman Law at the University of Buenos Aires and Argentine Catholic University (1975/81), is a member of the International Bar Association, Section of Business Law and Energy and Mineral Resources Law, London and a member of the Oil and Gas Argentine Institute and of the Argentine Association of Energy and Mineral Resources Law (ADERM). He was born in 1949 and admitted to the Bar in 1974 in Buenos Aires and Santa Fe. He attended the Argentine Catholic University and postgraduate courses and seminars in Washington D.C., Kingston, Caracas, Río de Janeiro, and London. Mr. Pera speaks Spanish, English, and French.

Panel: "Partnering with National Oil Companies"

Overview-ARGENTINA

1) A few years ago, to mention in Argentina the possibility contemplated by the subject being considered by this panel would have been almost incomprehensible for gas and oil production industry players.

2) Others would be led to evoke the times prior to the early 90s' when the only hydrocarbon exploration, exploitation, transportation and marketing concession holder was the Argentine Government-run company "Yacimientos Petrolíferos Fiscales-YPF" which, under the provisions of Law No. 17319 (the "Hydrocarbon Law")(and its preceding rules), monopolized such tasks and duties.

3) A dramatic change took place in Argentina as from 1989 in the political-legal-economic perception of the hydrocarbon business, with the start of growing private involvement in all power chain stages; to sum up: we went from a scheme featured by government power concentration and management to a concession system involving private companies, restricting, to a certain extent, the government's interaction to acting as a concession grantor and regulator of production and markets.

4) In such context, the Argentine Executive Branch passed a series of rules generically called "deregulation decrees" [Executive Orders Nos. 1055.121 and 1589/89] and Law No. 24076(the Gas Law)] establishing a system for market liberalization based mainly on:

a) the rigth freely to dispose of hydrocarbons,

b) freedom to export hydrocarbons, ensuring supply of the domestic market and

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c) right to be compensated if the government failed to abide by system regulations therein established.

5) At the same time, the Argentine Constitution was amended in 1994, particularly through the insertion of section 124, which reads as follows:

"Provinces shall have original domain over the natural resources existing in their territories".

This new chapter restricts federal government predominance on the subject and gives rise to...