Secretariat of Energy Could Extend Offshore Oil & Gas Exploration Permits

Argentine Executive Decree No. 870/2021 authorizes the extension of the first exploratory period for companies holding offshore exploration permits for a term of up to two years, based on: (1) the work plan and steps undergone by each permit holder to meet their investment commitments; and (2) the work plan and/or activities to be carried out during the extended period to meet committed investments within the framework of their relevant exploration permits.

The Decree granted the Secretariat of Energy (“SE”) the power to review and authorize extension requests for exploration permits granted through International Public Offshore Bidding No. 1 and the exploration permit granted by Resolution No. 196/2019. For further information on the terms of the public bidding process, please see: Oil & Gas: Launch of International Public Offshore Bid No. 1 to Grant Hydrocarbons Exploratory Permits.

This measure was handed down in response to a claim raised by the oil & gas industry, as reflected in the Decree’s recitals. Several companies holding offshore exploration permits requested that the SE suspend exploration terms on account of: on the one hand, impediments caused by COVID-19 and resulting regulatory restrictions over their operations and, on the other hand, delays in the approval of relevant environmental impact studies for the acquisition of seismic data.

These potential extensions coupled with the environmental impact statements required for the development of seismic activities can have a positive impact not only on the oil & gas industry but also on the Argentine economy in general.

Even when the SE’s resolutions approving current or future extension requests from companies holding offshore exploration permits are still pending, the issuance of this Decree is a good sign for the oil & gas industry.

Please click here to access the full version of the Decree in Spanish as published in the Official Gazette on December 24, 2021.