General

Key commercial aspects

Describe, in general terms, the key commercial aspects of the oil sector in your country.

As of 31 December 2018, Argentina has proven oil reserves of 379.796Mm3 and probable oil reserves of 163.257Mm3 (calculated at the end of the fields’ useful lives). The key industry players are YPF, Pan American, Chevron, Tecpetrol, Wintershall, Sinopec, Total, Shell, Sipetrol, Pluspetrol and Capsa.

As of 2010, the key players started developing unconventional operations in the Province of Neuquén (where the Vaca Muerta and Los Molles formations are located), forcing changes to the existing legal and regulatory framework (extending the exploration and evaluation terms, increasing their acreage through the acquisition of adjacent areas, or by unifying two or more blocks into multi-block evaluation or pilot project commitments, among others).

Energy mix

What percentage of your country’s energy needs is covered, directly or indirectly, by oil or gas as opposed to nuclear or non-conventional sources? What percentage of the petroleum product needs of your country is supplied with domestic production?

As of 31 December 2018, the country’s energy needs are covered as follows:

  • hydrocarbons - 86.5 per cent (oil, 31.2 per cent; natural gas, 54 per cent; mineral coal, 1.3 per cent);
  • hydroenergy - 4.3 per cent;
  • vegetable oils - 4 per cent;
  • nuclear fuel - 2.1 per cent; and
  • other sources - 3.1 per cent.

About 85 per cent of the of Argentina’s petroleum product needs are supplied by domestic production.

Government policy

Does your country have an overarching policy regarding oil-related activities or a general energy policy?

Pursuant to article 3 of Hydrocarbons Law No. 17,319; article 2 of Law No. 26,197 (the Short Law); and article 2 of Law No. 26,741 (the Hydrocarbons Sovereignty Law), the federal executive branch establishes the federal policy applicable to the exploration, exploitation, refining, transportation and marketing liquid hydrocarbons for domestic supply.

Following the enactment of the Short Law in January 2007, the licensing of exploration and exploitation activities in hydrocarbon reservoirs was transferred from the federal government to provincial governments.

Registering a licence

Is there an official, publicly available register for licences and licensees? Is there a register setting out oilfield ownership or operatorship, etc?

Each province has its own registry of licences and licensees, and this information is accessible by the public. Registries are maintained by the relevant enforcement authority of each province. In the case of offshore areas, subject to federal jurisdiction, this control is carried out by the Federal Secretary of Energy. No fees are due to obtain this information. The registers are physical, and information is obtained by written request. Information regarding operatorship of each block is publicly available on the Federal Secretary of Energy’s website.

Legal system

Describe the general legal system in your country.

The general legal system in the country is civil law and the rule of law is generally upheld.

Regulation overview

Legal framework for oil regulation

Describe the key laws and regulations that make up the principal legal framework regulating oil and gas activities.

The National Hydrocarbons Law, No. 17,319, amended by Law Nos. 26,197 and 27,007, is the main body of legislation for oil and gas exploration and production. Despite being of questionable constitutional grounds, the provinces have passed their own laws and regulations on these activities. The transportation, distribution and marketing of gas are independently regulated by Law No. 24,076.

Expropriation of licensee interest

Are there any legislative provisions that allow for expropriation of a licensee’s interest and, if so, under what conditions?

Expropriations in Argentina are regulated by the Federal Law on Expropriations, No. 21,499, and there are no specific provisions for oil and gas licences. This law was applied when implementing the expropriation of the majority shareholding by Repsol in YPF in March 2012, which was finally settled in May 2014 by means of an agreement executed between the federal government and Repsol that was subsequently ratified by Law No. 26,932 passed by the Federal Congress.

Revocation or amendment of licences

May the government revoke or amend a licensee’s interest?

Exploration permits and exploitation concessions provide a vested right that cannot be terminated without legal indemnification. Nonetheless, the relevant provincial enforcement authority or the federal government, for federal offshore blocks, are entitled to revoke these licences in the event of breach of the permit or concession conditions by the titleholder (article 80 of Law No. 17,319). Titleholders can also partially or totally relinquish, at any time, the acreage of a permit or concession. If an exploration permit is relinquished, the titleholder will be bound to pay any investment amounts committed and not fulfilled (articles 20 and 81 of Law No. 17,319).

Regulators

Identify and describe the government regulatory and oversight bodies principally responsible for regulating oil exploration and production activities in your country. What sanctions for breach may be imposed by the regulatory and oversight bodies?

The enforcement authority for the Hydrocarbons Law is the Federal Secretary of Energy. As a result of the Short Law, each province has its own enforcement authority, typically a secretariat of energy or a hydrocarbons board. Provincial state-owned companies are entities separated from the relevant enforcement authorities. The relevant enforcement authorities are entitled to declare the expiration of exploration permits and exploitation concessions for the following main causes:

  • failure to pay any annual instalment of the relevant surface tax up to three months after the due date;
  • failure to pay royalties up to three months after the due date;
  • substantial and unjustified failure to comply with the specified obligations with respect to productivity and investments;
  • repeated infringement of the obligations to submit requested information or to facilitate inspections; or
  • failure with the obligation to transport hydrocarbons of third parties, or repeated infringement of the tariff regime approved for such transportation.

Failure to comply with the obligations related to permits and concessions not implying a cause for expiration shall be penalised with a fine imposed by the enforcement authority.

Government statistics

What government body maintains oil production, export and import statistics?

The Federal Secretary of Energy maintains oil production, export and import statistics through Resolution No. 319/1993, which authorises the Secretary to obtain statistical information from the companies operating such activities.

Law stated date

Correct on

Give the date on which the information above is accurate.

May 2020.