Ministry of Energy and Mining.

HIDROCARUBURS.

Decree No. 6.130/1967

Permits for exploration in the "Golfo San Jorge" Zone

Bs. As. 27/10/68.

VISTO the SEEM Expediente N 51.510/68 (Cde. No. 4) in which they process the actions related to Area No. 4 of the "Golfo San Jorge" Zone offered in Public Contest No. 4 for the exploration of hydrocarbons in accordance with Law No. 17.319; and

CONSIDERING:

That by Decree No. 9.313/67 the Secretariat of State of Energy and Mining was authorized to conduct contests denying the granting of exploration permits in the "Golfo San Jorge" Zone, within which Area No. 4 is located (signed in the documents of this contest as Fraction "G") that motivates the present:

That the Secretariat of State cited, in compliance with the provisions of the same decree and in the use of the sfacultades that the other the Law No. 17.319 promoted the call to Contest No. 4, with subsection to the "General Conditions of the Contests of the Law No. 17.319" promoted the call to Contest No. 4, with subsection to the work "Section 67°

That on the 24th of September next last and after the legal requirements for advertising were fulfilled without opposition, the envelopes were opened containing the proposals presented to the Contest No. 4, Zone "Golfo San Jorge", with the result that it gives account of the notebook of foja 51/52 of the main;

That of the reports produced - technical, economic and legal - it turns out that the only offer made with the Phillips Oil Company Argentina and Tenneco Oil Company of Argentina, in one hundred the Area No. 4 presented by Agip Argentina S.A. de Hidrocarburos ICF, form jointly and in solidarity, is suitable to the national interests because it is companies that meet the requirements of Article 5 of the Law No. 17.319 and contest

That it is appropriate to award the requested exploitation permits to the interested parties, in the conditions proposed and in accordance with the documentation of the contest:

Cases of divergence that the parties may submit to the arbitral tribunals in order to comply with article 88 of Act No. 17.319 must be taxed.

That the special advantage for the Nation offered, of undoubted interest, must be expressly accepted:

For this reason, the proposal of the Secretariat of State and Energy and Mining, as recommended by the Minister of Economics and Labour and as set out in articles 48 and 98 (b) of Law No. 17.319.

The President of the Argentine Nation,

Decrete:

Article 1- Otorgase permit for exploration of hydrocarbons in accordance with the rules specified in Article 2 of this decree, to Agip Argentina Sociedad Anónima de Hidrocarburos Industrial, Comercial y Financial, Phillips Petroleum Company Argentina and Tennecco Oil Company of Argentina in a joint and joint form, on Area No. 4 of the "Golfo San Jorge" Zone (Concurso No. 4) of a surface approx.

Between points 3 and 4 by the submarine line of equinoccial acronyms.

Art. 2° - The permit is granted subject to the following documentation that integrates it (Art. 2nd Pledge of General Conditions):

(a) The Hydrocarbons Act No. 17.319 and its regulations;

(b) The General Conditions of the Competitions of Law No. 17.319;

(c) The Specific Conditions of the Contest No. 4 (Zona "Golfo San Jorge"):

(d) Clarifications, rules and instructions supplementary to the precited documents:

(e) The proposal submitted by the offerors and the present decree.

Article 3 - For the periods of the basic period of the permit, the following terms:

1st period: three (3 ) years
2nd period: three (3) years
3rd lost: two (2) years.

Art.4° - The minimum investments committed under article 20 of Act No. 17.319 are as follows:

1st period: Two million eight hundred forty-three thousand United States dollars (US$ 2.843,000)
2nd period: One million two hundred thousand United States dollars (US$ 1,200,000)
3rd period: One million two hundred thousand United States dollars (US$ 1,200,000)

Article 5 - Any investment made in national currency or other currencies other than US dollars will be computed in this last currency, based on the sales type quote of the Banco de la Nación Argentina at the close of the date on which each investment is made.

Art. 6 - Apply the technical - financial guarantees presented by Agip S. p.A., Phillips Petroleum Company and Tenneco Corporation.

Article 7 - Apply the special advantage for the Nation contained in the offer, consisting of the obligation of the awardees to make available to the Argentine Government the amount of twenty-five thousand United States dollars (US$ 25,000) per year, beginning with the following year to the one in which the sale of prodcution obtained in the area and for each subsequent year during which the concession originated in the area will be retained by the National Authority.

(a) Scholarships for Argentine students selected by the Government to study in the country or in specialized institutions of higher studies in Italy or the United States;

(b) Grants to Argentine institutions of higher education.

Art. 8° - The delinde of the area of the permit shall be carried out by the permissionaries within the period of one hundred and eighty (180) days within the award, subject to the regulations governing the application authority of Law No. 17.319.

Art. 9° - During the first ten (10) years of the exploration permit or the granting of exploitation that is its consequence is reduced to forty-seven percent (47%) the tax rate set out in Article 56 inc. c) section VI of Law No. 17.319.

Art. 10th - Provide for technical matters that the parties may submit to the procedure established in article 86 of Act No. 17.319, in addition to the property consequences of the administrative declaration of invalidity or expiry of the present permit or of which the following cases of divergence referred to in the Act:

(a) Those concerning whether the techniques of work or employed by the assignee or concessionaire are appropriate for the purposes of articles 20 and 31, as well as those that are assumed in respect of the reasonableness of the time frames and the need for investments in the development of the entire area of the concession referred to in the second of the above-mentioned provisions:

(b) Those who subscribe to whether a deposit meets the commercially exploitable requirements in accordance with Art. 22;

(c) Those who promote themselves with respect to the concidence of the lot of exploitation with the productive traps referred to in Article 33;

(d) Those concerning the property that the concessionaire must revert to the State in the circumstances of Article 85.

(e) Those who subscribe to the existence of vacant capacity or the technical reasons for fulfilling the obligations under Article 43 of the concessionaire.

In this regard, Articles 763 to 792 of Act No. 17.454 shall apply as long as they are consistent with the provisions of Act No. 17.319.

Article 11: The permissionary shall pay to the State the sum of fifty million pesos national currency (m$ 50,000.000) in accordance with Article 18 of the Pledge of Particular Conditions, within thirty (30) days of being notified of the present.

Art. 12° - The importation of equipment, machinery and other elements necessary for the development of the activities arising from the permit granted by this decree shall be subject to the rules that the competent Authority dictates in accordance with Article 68 of Law No. 17.319.

At the request of the permissionary, the foreign capital investments required for the implementation of the agreed permit may be accommodated under Act No. 14.780 and its regulations.

Art. 13th - This decree will be endorsed by the Minister of Economy and Labour and signed by the Secretary of State for Energy and Mining.

Art. 14° - Contact, publish, give to the National Directorate of the Official Register and archvese.

NGOsANIA. - Adalbert Krieger Vasena.- Luis M. Gotelli.