Argentina: Hydrocarbons - Regulation on the conditions for hydrocarbon producers to access foreign currency based on incremental production

In brief

Resolution No. 13/2023 ("Resolution") of 16 January 2023 of the Energy Secretariat (SE) establishes the General Conditions ("Conditions") that hydrocarbon exploration and production companies ("E&P Companies") must comply with to access Argentina's foreign exchange market to obtain foreign currency related to their Incremental Oil and Natural Gas Production ("Benefits").

The Conditions include administrative and technical information and requirements, as well as the general terms of the employment promotion regime to be eligible for the Benefits.

Once the Conditions have been fulfilled, the SE will decide on the granting of the Benefits within 90 days from the closing of the quarter for which such Benefits are requested.


In focus

The Resolution complements Communication "A" 7626 of 28 October 2022 of the Central Bank of Argentina (BCRA), adding to the regulatory framework of Decree No. 484/2022 that regulated Decree No. 277/2022 which established the Benefits ("Decree 277").

The Benefits consist of the possibility for E&P Companies to access the Argentina Foreign Exchange Market (MLC) for 20% of incremental oil production and 30% of incremental natural gas production. These percentages may be higher if certain conditions are met. Once the foreign exchange access certificates have been issued by the SE, they may be assigned to direct suppliers or third-party partners of the E&P Companies. 

The Conditions for E&P Companies to access the Benefits also include the characteristics of the Regional and National Suppliers Development Plan ("Development Plan"), to be updated annually and whose evaluation, monitoring and control will be in charge of the commission created for such purpose by Decree 277. Such commission will submit biannually to the Industry and Production Development Secretariat and the Energy Secretariat a progress report with recommendations on the fulfilment of the Development Plan.

The following is a list of some of the most relevant requirements to be fulfilled by the E&P Companies, which can be classified as: 1) Administrative; and 2) Informative/Technical.

1) Administrative 

  1. Application form for accession to the Foreign Exchange Access Regime for Incremental Oil/Natural Gas Production (Decree No. 277/22) 
  2. Certificate of registration in the Registry of Oil Companies, Producing Section (Provision No. 337/2019)
  3. Certified instrument evidencing the legal capacity of its representatives
  4. Affidavit on participation in an economic group and shareholder composition (Article 5 of Decree No. 484/2022) 

2)    Informative/Technical

  1. Estimate of the total hydrocarbon production/injection accumulated in 2021 corresponding to the O&G concession areas of which it has full or partial ownership 
  2. Estimate of the Quarterly Incremental Production from the production areas of the relevant E&P Company 
  3. Detail of hydrocarbon exports during the last 12 months 
  4. Presentation of Development Plan

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