Amendments to the Gas Plus Program

The Gas Plus Program (the “Program”) was created by Resolution No 24/2008 of the Secretariat of Energy (the “SE”) with the purpose of creating incentives for the production of natural gas. For more information regarding the Program, please refer to “Gas Plus Program” published in Marval News # 70 dated March 31, 2008.

On September 12, 2008, the SE issued Resolution No 1031/2008, which modified the Program and made it more flexible, in terms of allowing the possible incorporation of natural gas productions that had not been included in the original regime.

The main modifications incorporated to the Program are the following:

1)    The lessening of the requirements regarding the compliance with the Agreement with Natural Gas Producers 2007-2011 (the “Agreement”) that the producers who apply for the incorporation to the Program should fulfill. In this regard, natural gas deliveries performed under the Agreement may be lower than those committed if the producer proves that:

(i)            it has exhausted all possibilities of increasing natural gas production in its concessions;

(ii)           the expected increase in the daily natural gas production to be considered as Gas Plus is, at least 20% higher than the average daily production registered during the calendar year preceding the year of the filing of the application;

(iii)          up to the termination of the Agreement, it shall ensure levels of natural gas delivery equal to those verified during the calendar year preceding the year of the filing of the application.

2)    The scope of cases in which the natural gas produced may be considered to fall within the Program is increased as follows:

(i)            the new Resolution eliminates the requirement that provided that the reserves declared as from the discovery should not have been declared before under any other category; and

(ii)            the natural gas producer who considers that its exploitation has exceptional characteristics of both geological and economic nature, may apply to be incorporated to the Program even when the exploitation does not fit precisely within the parameters provided by Resolution No 24/2008. In such event, the SE may consider the merits of the case and allow the exploitation to be incorporated to the Program.

3)    The inclusion of new marketing conditions.

If natural gas volumes produced under the Program are redirected or reassigned to consumptions deemed to have greater priority, the natural gas producer shall be paid the price provided for such volumes under the corresponding gas sale agreement that was affected by the redirecting or reassignment orders.

4)    Applications for incorporation to the Program should be filed before the Undersecretariat of Fuels.