January 11, 2007
Transfer of domain and administration of hydrocarbon fields to the provinces in which they are located. Oil information transfer agreement.
On January 5, 2007, Law No. 26,197 was published on the Official Gazette. As a result, the transfer of public domain of hydrocarbon fields by the federal Government to the provinces, which had been previously established by the hydrocarbon federalization law No. 24,145, becomes effective.
The recently enacted law substitutes article 1º of the hydrocarbon law No 17,319 –as amended by law No. 25,145–, establishing that the liquid and gas hydrocarbon fields located in Argentine territory and in its continental platform belong to the federal Government or to the provinces, depending on which territorial boundaries they are located in.
Following, are the main points of law No. 26,197.
1. The provinces have the original domain and administration of the fields located in their territory or in their adjacent coastlines up to a distance of twelve (12) marine miles as of the lines established by law No. 23,968. As of the twelve (12) marine miles up to the exterior border of the continental platform, the fields belong to the federal Government.
2. All exploration permits and hydrocarbon exploitation concessions, and any other hydrocarbon exploration and/or exploitation contract granted or approved by the federal Government, are automatically transferred to the provinces, without affecting the concessionaires’ obligations.
3. As granting authorities, the provinces are entitled to pursue and execute all rights and powers foreseen in law No. 17,319 and regulations, including the application of sanctions. The exercise of such rights and powers shall comply with law No. 17,319 and the hydrocarbon federal agreement.
4. Hydrocarbon royalties corresponding to exploration permits and exploitation concessions shall be paid to the jurisdiction to which the fields belong.
Furthermore, law No. 26,197 states that within one hundred and eighty (180) days of its enactment, the national Executive Power and the provinces shall agree:
(i) the transfer of the transport concessions associated with the hydrocarbon exploitation concessions transferred by means of law No. 26,197, except in the case of transport facilities that involve two (2) or more provinces or that have export as their main destination, in which case the conceding authority shall be the national Executive Power; and
(ii) the terms and conditions of the transfer of oil information, which shall include all documents corresponding to each of the transferred areas, technical, security and environmental information on transport concessions, files currently in course -whichever their nature and stage-, the state of account and conciliation of credits for canons corresponding to each area, the list of obligations pending compliance by the permit holders and concessionaires that may be relevant in each transfer.
For further information, please contact Néstor Belgrano, Héctor Huici or Jacqueline Donaldson.
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