New requirements for Producers Registration

On April 4, 2007 Resolution No 407/2007 issued by the Secretariat of Energy (the “Resolution 407”) was published in the Official Gazette. Resolution 407 provides new requirements for the registration of the hydrocarbons companies in the Hydrocarbons Exploration and Exploitation Companies Registry kept by the Secretariat of Energy. This resolution replaced the prior Sub Secretariat of Energy Resolutions No 96/1990 and Secretariat of Energy Resolution No 468/1998, which formerly regulated this matter.

The purpose of the Secretariat of Energy, which is not explicit in Resolution 407, would be to deny the registration in the Oil Companies Registry to those companies that operate or have carried out hydrocarbons services in the Malvinas Islands under United Kingdom laws. As a result of denial of registration these companies would not be able to perform hydrocarbons activities within Argentina.

Resolution 407 provides the requirements that need to be complied with to register companies in the Oil Companies Registry, producers’ category, as operators or non operators, including compliance of additional obligations for those companies that are already registered.

These obligations are:

(i)            to keep updated all the information regarding the company in the Registry’s files pursuant to Section 7, Decree No 5906/1997; and

(ii)           to file, within 30 business days as of the date in which Resolution 407/07 was published, an affidavit regarding the observance of the prohibitions set forth by the resolution in connection with the oil companies that operate in the Argentine continental shelf.

The companies that are already registered, as well as those that request their registration from now on, shall file an affidavit stating that they are not holders, shareholders or contractors and have no beneficial relations with companies that carry out or have carried out hydrocarbon activities in the Argentine continental shelf without previously obtaining the necessary authorizations issued by the relevant Argentine authorities. The resolution also provides that this affidavit shall be up-dated on an annual basis, within a term of 30 days as of the beginning of the year. As for holders of exploration permits or hydrocarbon production concessions issued by the relevant authority, they shall evidence that they, or any of their shareholders, controlled or controlling companies, have not a direct or indirect interest in:

(i)           off-shore hydrocarbons exploration or exploitation interests without the proper authorization; or

(ii)           in companies that carry out or have carried out hydrocarbons services in the Argentine continental shelf without having obtained authorization from the relevant Argentine authorities.

For those companies that do not comply with the above mentioned requirements, Resolution 407/07 sets forth the following sanctions:

(i)              de-registration from the Oil Companies Registry; and

(ii)              the expiration (caducidad) of the permits and concessions held by such company. 

Additionally, please note that pursuant to Section 9 of Decree No 5906/1997 the sanctions for the companies that do not comply with their obligation to keep their files duly updated are:

(i)                 warning,

(ii)                 suspension and

(iii)                de-registration from the Registry.