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2021Ratified Resolutions No. 53/20 and No. 142/21 of the Ministry of Energy and Natural Resources of Neuquén

December 30, 2021

The Executive Power of Neuquén ratified Resolutions No. 53/20 and No. 142/21 of the Ministry of Energy and Natural Resources of that province, regarding unconventional hydrocarbons exploitation

On December 23, 2021, Decree No 2183/2021 of 16 December 2021 (“Decree 2183”) was published in the Official Gazette of the Province of Neuquén. Such decree ratifies Resolution No 53/20 of the Ministry of Energy and Natural Resources of that province, dated July 1, 2020, and Resolution No 142/21, dated November 24, 2021, of the same administrative authority, which amended Resolution 53/20.

Resolution No. 53/20 (as amended by Resolution No. 142/21) establishes that the award of any Non-Conventional Hydrocarbon Exploitation Concession shall be based on a development project including, at the beginning, a Pilot Plan -which shall include the area affected by it, and shall be approved by the enforcement authority-, establishing also parameters to be taken into account by the Pilot Plan and technical criterions for the delimitation of the area covered by the referred concession.

It also sets forth that companies that request the inclusion, within the Non-Conventional Hydrocarbon Exploitation Concession, of an area larger than that affected by the approved Pilot Plan, must agree with the enforcement authority the conditions and terms for this and pay an Area Extension Bonus.

On the other hand, the aforementioned resolution establishes the obligation of the concessionaire – two months before the expiration of the Pilot Plan and within the first fifteen-days of December of each year during the term of the concession – to submit and periodically update a continuous development plan containing the investments and works to be carried out during the term of the concession. Additionally, Resolution No. 53/20 provides that the investments and works corresponding to the following year of the year in which each submission is made, will be considered as a firm commitment to comply, and the concessionaires may extend such commitment with respect to those corresponding to the three years following the year of the submission.

As it has been argued, Resolution No. 53/20 could entail certain questionable aspects regarding the distribution of powers regime between the National Government and the provinces for the regulation of hydrocarbon activities, since its provisions could be considered not to be aligned with the Federal Hydrocarbons Law (Law No. 17,319 and its amendments).

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