New Hydrocarbons Law of the Province of Neuquén

On March 26, 2004 the Hydrocarbons Law for the Province of Neuquén was published in the Neuquén Provincial Gazette, under No 2,453.

This new law establishes, among other matters, that fields of liquid and gaseous hydrocarbons located in the territory of such province belong to its inalienable and imprescriptible patrimony. It also regulates the activities of exploration, exploitation, industrialization, transport and marketing of hydrocarbons and their by-products. In general, Law No 2,453 regulates these subject-matters in terms similar to those of Federal Hydrocarbons Law No 17,319, while it vests the enforcement authority’s duties upon the Provincial Executive Branch.

The Province of Neuquén has anticipated its intention to obtain a judicial declaration regarding the unconstitutionality of Federal Hydrocarbons Law No 17,319, further to the reform of Argentine Constitution in 1994.

Provincial Law No 2,453 has the following federal provisions as legal precedents:

(a) Law No 24,145 of Federalization of Hydrocarbons, which provided for the transfer of domain of hydrocarbons to the provinces where these are located, further to the enactment of a new hydrocarbons law to replace Federal Hydrocarbons Law No 17,319; the new law would be drafted by a Commission for the Federalization of Hydrocarbons to be created by the Federal Executive Branch; to date, such law has not been enacted;

(b) article 124 of the Argentine Constitution, further to its reform of 1994, which gave express recognition to the provinces of their eminent domain over the natural resources existing in their territories; and

(c) Decree No 546/2003, which transferred to the provinces the powers to grant and regulate permits and concessions over hydrocarbon areas not subject to permits or concessions by the Federal Government.