Energy Secretariat

HIDROCARBUROS

Appropriate a signed agreement with the Government of Mendoza on the implementation of Article 12 of Law 17.319.

Decree No. 1.294

Bs. As., 31/3/70

VISTO the Convention held “ad-referendum” of the National Executive, among the lords Secretary of State of Energy, Administrator General of the Company Tax Petroliferous Deposits and the Minister of Finance of the Province of Mendoza, “ad referendum” of the National Executive and of the Province of Mendoza, concerning the application of article 12 of Law No. 17.319, and

CONSIDERING:

That the situation generated, with respect to the participation that corresponds to the Province of Mendoza in the production of the deposits of hydrocarbons that are exploited in its territory, following the validity of the “bow” values established pursuant to Law No. 17.319, must be resolved by equitably contemplating the interests of the parties;

That the agreement signed, without prejudice to agreeing to the province under conditions that would allow it to adapt financially to the new regime in a reasonable time, ensures the observance of national legislation on hydrocarbons;

That the reservations made by the Province of Mendoza do not preclude the approval of this agreement,

That by Decree No. 393 of 19 February 1970 the Provincial Executive Branch has approved the above-mentioned agreement;

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Article 1- Approve the agreement, which, in connection with the application of Article 12 of Law No. 17.319, held, on 30 January 1970, the Lords Secretary of State of Energy, Administrator General of the Company Tax Petroliferous Foundations and the Government of the Province of Mendoza, whose text is transcribed in the annex and is an integral part of this decree.

Art. 2°- This Decree shall be endorsed by the Minister of Public Works and Services and signed by the Secretary of State for Energy.

Art.3°- Contact, post, give to the National Directorate of the Official Register and archvese.


Convention: Between the Secretariat of State of Energy, represented by its owner, Engineer Juan Pedro Thibaud, the Petroliferous Public Prosecutors Company, represented by the General Administrator Engineer Daniel A. Brunella and the Province of Mendoza, represented by the Minister of Finance, Contador Público Nacional D. José Alberto Donna Bonelli, the latter according to the provisions of provincial decree No. 96/70, in order to arbitrate a procedure that complies with the conditions resulting from the application of the provincial participation regime in the exploitation of oil (Act No. 17.319, Article 12), without prejudice to other solutions that the Province can obtain to fulfil the obligations arising from this agreement and with the express reservation of the province that the subscription of referendum

Article 1 - The difference between what is really perceived by the Province of Mendoza in terms of participation for the exploitation of oil during the time elapsed from July 8, 1967 until December 31, 1969 and what has been to be perceived by the same concept, if the value of the “well pouch” established in Resolution SEEM No. 434/69 has been applied to the amount of reimbursable advance made by the Petroleum Authority to taxation. The restitution of the anticipated advance shall be carried out by the Province of Mendoza in the rule established in Article 4 of the present agreement.

Article 2- Establishing in pesos Law 16.186 forty-four million nine hundred thirty-nine hundred fifty-three with fifty-five cents ($44,930,953.55)- participation paid to the Province in 1968 - the amount to be received annually in the same concept by the Province of Mendoza from January 1, 1970 and until the annual sum to be received by that State according to the values “bearing oil” that governs As of 1 January following any of the two facts, the first of them to occur, the provincial participation will continue to be liquidated in accordance with the general regime established by Law 17.319 and its regulations, as agreed in Article 4 of this document.

Article 3. The amounts received by the Province pursuant to Article 2 of this Agreement, in respect of which they have corresponded as a result of the application of the regime established by Law No. 17.319 and its regulations for the regulation of the participation in the exploitation of oil, shall also be a reimbursable advance of the aforementioned participation by the Petroliferous Tax Foundations, which shall be refunded by the Article in addition to those defined.

Article 4 - From the date on which the participation corresponding to the Province of Mendoza is liquidated under Law No. 17.319 and its regulations, as defined in Article 3, the National State shall retain 12 per cent (12 per cent) of the annual amount resulting in the restitution of the advances made in accordance with this agreement.

Article 5°- The parties agree to exempt from interest the operation in the present.

In proof of conformity, the parties sign three copies of a tenor mims and one effect, in the City of Buenos Aires, on the thirty days of the month of January, a thousand nine hundred and seventy.