Secretariat of Energy – Resolution No. 779/2022: benefits of the Regime for the promotion of investment in hydrocarbons production.
Oil & Gas Department report | Secretariat of Energy – Resolution No. 779/2022: benefits of the Regime for the promotion of investment in hydrocarbons production
Dear Sir or Madam,
Resolution No. 779/2022 of the Secretariat of Energy (the “Resolution”), published in the Official Gazette on November 28th, 2022, granted Petronas E&P Argentina S.A. certain benefits set forth in the Regime for the Promotion of Investment on Hydrocarbons Production (the “Promotion Regime”) established by Decree No. 929/2013 (the “Decree”). Said Decree created the Promotion Regime, which benefits those registered in the Investment Registry and fully complies with the requirements established by this regulation. Furthermore, Law No. 27,007 (“Hydrocarbons Law”) extended the Promotion Regime to projects involving direct investments of not less than US$250,000,000 (two hundred and fifty million United States dollars), which should be calculated at the project’s filing, which amount should be invested within the project’s first three (3) years.
The Hydrocarbon Law also provides that the beneficiaries will be granted the benefits included in the Decree after the third year of implementation of the respective Investment Project for the Exploitation of Hydrocarbons.
The Decree sets forth the right to export up to 20% of liquid and gaseous hydrocarbons produced by the project, with a zero percent (0%) export duty rate, if applicable. In turn, the Hydrocarbon Law provides that the percentage of hydrocarbons to which the benefits of the Decree shall be applicable will be increased up to 60% in respect of offshore exploitations that meet the requirements of the law.
The volumes of exportable hydrocarbons will be allocated periodically to the project and/or to the natural or legal person who has request it. In the event of an association, the associated parties may agree on how the benefit will be allocated between them, which allocation shall be communicated to the Comisión de Planificación y Coordinación Estratégica del Plan Nacional de Inversiones Hidrocarburiferas in its capacity of Authority of the Promotion Regime.
Likewise, the beneficiaries that commercialize hydrocarbons in the foreign market will have the free availability of 100% (one hundred percent) of the currencies to be collected in respect of the export of said hydrocarbons, and they will not be obliged to bring into Argentina the funds corresponding to the export of twenty percent (20%) of their liquid or gaseous hydrocarbons production.
Please, do not hesitate to contact us should you require any additional information on this matter.
Sincerely,
José Carlos Cueva
Ricardo Castañeda
Pedro Silvestri
Pablo Godoy