Yesterday, Decree 872/2018 (the Decree) was published through which the National Executive Power instructed the Government Energy Secretariat (Secretariat) to call for an international public bid (Public Bid) to award exploration permits for the search for hydrocarbons offshore Argentina.

The Public Bid will include 14 areas in the Northern Argentina Basin, six in the Austral Marina Basin and 18 in the West Malvinas Basin. For more information in relation to the areas (Surface, type, exploration term) please see the following link.

The Decree established the formula to determine the royalties on the production of the exploitation concession (the Formula), which vary from 5% to 12% depending on the relationship between (i) hydrocarbon sales (less royalties) and (ii) exploration and exploitation investments and operating expenses during the exploration stage. The Energy Government Secretariat was instructed to dictate the complementary rules regarding the procedure and calculation of the Formula.

The National Executive Power invited the provinces with jurisdiction over offshore areas to coordinate with the Energy Government Secretariat the call for international public bids in similar terms to the Public Bid.

According to sources of the Energy Government Secretariat, it is estimated that the Public Bid will be launched before year-end.