HIDROCARBUROS

Decree No. 1.443/1985

Rules 2°, 11, and 95 of Act No. 17.319 are amended to enable Y.P.F. to convene international public competition and to conclude contracts for the exploration and subsequent exploitation of hydrocarbons in various areas of the Argentine Republic.

Appropriate the basis of the "Terms and Conditions" and the "Principles of the Type Contract".

VISTO the expte. 25,618/85 of the Register of the Energy Secretariat through which the regulation of arts is promoted. 2nd, 11th and 95th Law 17.319; and

CONSIDERING:

That the National Government, in taking over the mandate conferred by popular sovereignty, must face the consequences of a devastating economic policy, the effects of which still remain with a marked impact on the productive sectors of the Nation, despite the corrective efforts made.

That the energy sector and under the pretext of its inefficiency, a sensitive decapitalization of the Public Enterprises, its unjustified indebtedness and loss of markets that they set up, in the special case of the State's Petroliferous Fiscal Deposits a strong decrease in its operational capacity, one of whose consequences has been the least incorporation of hydrocarbon reserves.

That the magnitude of the verified reserves has not been increased in recent years, compensating the exploratory effort only a part of the volumes extracted; this makes it necessary to reverse the trend, projecting a hydrocarbon policy aimed at ensuring self-sufficiency, achieving an adequate level of reserves and obtaining increasing exportable margins, thereby helping to improve the terms of the external sector and to contribute to the development of its people.

To that end, it is necessary to promote the unbeatable decision to undertake the exploitation of the vast sedimentary basins of the national territory, in order to incorporate new commercially exploitable hydrocarbon reserves, for which the concurrent participation of the public and private sectors should be encouraged.

Such a policy tends to achieve the transformation of the country into oil producers not only for the satisfaction of their needs but to achieve export targets capable of mobilizing their economic-industrial potential.

To this end, the search for and extraction of liquid hydrocarbons should be intensified and such oil should be paid with prices referring to the value of the international crude in its different qualities.

On the other hand, the verified gas reserves and the need for their use in the country recommend setting comparatively low prices for those of liquid hydrocarbons to be extracted, allowing the payment in foreign exchange only in case of their income.

That contractors should in turn take on the risks inherent in the exploration and exploration of hydrocarbons and commit themselves to providing to their exclusive position the technology, equipment, machinery and other investments necessary for the development of the work to be carried out according to the respective contract.

It will be an obligation for them to carry out their tasks in accordance with the most rational, modern and efficient techniques and to conform to all standards consistent with proper exploration and subsequent exploitation of deposits.

That is exceptionally and by reason. Petroliferous Public Prosecutor ' s Offices, where reasons of urgency, of technical and economic specialty or when there are no offers or are not strictly in line with the folds, direct recruitment may be available in all cases subject to the express ratification of the National Executive.

That contracts to be concluded should provide for a period of pre-spection, a period of exploration that will allow access in the event of the discovery of commercially exploitable hydrocarbons to a later period of exploitation that will have the characteristics of a construction site, following a declaration of commerciality proposed by the contractor and declare the authority of application.

That such contracts will have as essential elements the recognition in favor of the National State of a royalty and in favor of the State Society of a canon, referred to the international price of the equivalent oil. They will also contain the possibility of the Petroliferous Taxation Societies of the State to associate themselves with their sole option in the period of exploitation, in accordance with the technical and economic evaluation of each commercial declaration proposal or when they fundamentally take into account the declarations and their own operational possibilities.

That, despite the economic condition imposed on it by its current situation, the National State shall ensure that its obligations are met by payment in ordinary currency in the country, in foreign currency, with the alternative of processed products or crude oil from the time that domestic needs are satisfied with the national production of hydrocarbons, and this latter circumstance must be declared by the national executive branch as a general rule.

That the Petroliferous Public Prosecutions State Society through a well-founded resolution shall establish the award of tenders for subsequent approval by the National Executive.

That such contracts shall be subject to general tax rules, respecting the rates provided by the enforcement authority, but the risk assumed by contractors shall recognize the tax stability provided for in section 15 of Act No. 21.778.

That also and in the event that the provinces adhere to such tax stability in their own orbit, they will be recognized by the State Company in a proportion of its canon.

That contractors should comply with the provisions of Act No. 18,875, Decree-Law No. 5,340 of 1 July 1963 and Decree No. 2,930 of 23 December 1970.

Finally, it should be expressed that the bases of the solicitation documents for the call to international public contracts and the draft type contract should be approved all subject to the particular modifications that for each area proposes Tax Petroliferous Deposits State society when technical, economic or legal reasons justify it, any ad referendum of the National Executive.

In accordance with article 98 (g) of Act No. 17.319, it is incumbent upon the National Executive to dictate this Decree.

Therefore;

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Article 1 - Rule Articles 2o, 11 and 95 of Law No. 17.319, empowering the Petroliferous Public Prosecutors Society of the State to convene international public competition and to conclude contracts for the exploration and subsequent exploitation of hydrocarbons, in accordance with the provisions of this Decree and with respect to the areas reserved for them by the National Executive.

Art. 2o - In contracts to be concluded pursuant to this Decree, contractors shall assume all the risks inherent in the exploration of hydrocarbons, and shall undertake to provide to their exclusive position the technology, capitals, equipment, machinery and other investments that are necessary for the operations that are developed in the area under contract, in the context of the provisions of Article 8 of the present and without prejudice to the association that may be agreed between the companies.

Art. 3o - Contractor companies shall not acquire any mining right on the deposits that are discovered in the contract area or consequently the domain of extracted hydrocarbons.

Art. 4o - The contractors shall exercise on behalf of the National State and with the intervention of the Petroliferous Fiscal Deposits State Society the rights agreed by the Mining Code in Articles 42 et seq., 48 et seq. and concordants of both respect of the property of tax or particular property located within or outside the limits of the contract area.

The relevant procedures will be carried out through the enforcement authority, and the resolutions adopted should be communicated to the jurisdictional mining authorities as appropriate.

The owner ' s opposition to the occupation itself or his lack of agreement with the compensation set, in no case will be sufficient cause to suspend or prevent the authorized work, provided that the contractors satisfactorily adhere to the damages.

When the area covered by the contract is covered by the waters of seas, rivers, lagoons or lakes, the contractors will exercise the same rights in the same way, with respect to the coastal land or the coasts closest to it for the establishment of docks. warehouses, offices, communication and transport routes and other facilities necessary for the implementation of the work.

Art. 5o - They constitute obligations of contractors, in addition to the compliance of the implementing Authority, the following:

(a) To execute its tasks in accordance with the most rational, modern and efficient techniques, in accordance with the characteristics and magnitude of the reserves that they verify while ensuring the maximum production of hydrocarbons compatible with the economic and technically adequate exploitation of the deposit;

(b) Take the necessary measures to prevent damage to the deposits due to the drilling, operation, maintenance or abandonment of wells;

(c) Preventing any hydrocarbon spill, requiring contractors to respond to the damage caused. In case of guilt that is attributable to them and determined by the application authority, they must also pay the royalty and sing for those volumes;

(d) Take the security measures recommended by accepted practices in the field in order to avoid or reduce sinisters of all kinds;

(e) Take the necessary measures to prevent or reduce damages to agricultural, fishing and communications activities, as well as to water blankets found during drilling;

(f) In operations at sea, rivers or lakes, contractors should take the necessary precautions to avoid contamination of the waters and adjacent coasts;

(g) In operations that are carried out on the surface of National or Provincial Parks, they must conform to the rules that the competent agencies dictate in this regard;

(h) To deliver to the Petroliferous Public Prosecutors ' Societies with the periodicity established in the contracts, all technical documentation related to the basic information, studies or analysis carried out during the duration of the contract, with the corresponding assessments, whether or not there has been commercial discovery, and must certify the verified reserves on an annual basis;

(i) To allow the State Society and the Authority of Implementation to have access to the respective areas, in order to carry out the inspections and prosecutions necessary for the implementation of the legislation in force;

(j) Commit to non-venture of gas, except authorized by the Implementation Authority. Any violation of this obligation will generate royalty and canon payment.

In all cases of this article, contractors shall act in accordance with generally accepted practices in the exploration and exploitation of hydrocarbons.

Art. 6o - Contracts governed by the present decree shall be held prior to the call of international public examination, except for the assumptions of the following article.

Petroliferous Public Prosecutor's Offices of the State Society shall issue the specific regulations governing such examinations, in accordance with the guidelines set out in this Decree and its Annex I on the occasion of each call to the International Public Competition or in its case, of Direct Procurement.

The amount of work units proposed by the contractor and the percentage of the current currency retribution in the offered country will be taken into account as a core award.

Art. 7o - Petroliferous Public Prosecutor ' s Offices, exceptionally and by a well-founded resolution, with prior favourable intervention by the Authority of Implementation, will be entitled to direct contract ad referendum of the National Executive, in the following cases:

(a) When an international public competitive examination had been conducted, no tenders had been made or the same was strictly adjusted to the folds; in such a situation, direct recruitment could be held up to one year after the date on which the international public competitive examination was declared desert;

(b) When urgent, specialty or technical-economic reasons, they make it necessary.

Art. 8o - Contracts to be entered into as a result of this Decree must provide for the following stages:

(a) A period of Previous Prospection that may include the realization of geological, geophysical, geochemical, photogeological and any other exploratory nature and even the drilling of wells.

This period will last up to three (3) years, according to the qualification of areas carried out by Potrolific Public Prosecutors Society of the State based on the costs and risks associated with them.

The contractors will undertake the commitment to make the amount of work units proposed by them, which will be valued only to establish the penalty established for non-compliance. At the end of this period you will be able to access the exploration by performing the amount of mandatory drillings set out in the contract or have to restore the area. In the latter case, no subsequent duties or obligations shall be incurred by either party, except those arising from the breach by the contractor.

(b) A period of exploration:

That it will include a minimum mandatory work of annual drilling, as established by the Petroleum Tax Authorities State Society under the conditions of the contest;

It will last up to four (4) years, divided into two subperiods of two (2) years each;

That an additional period of up to two (2) years may be authorized at the request of the contractor when it is justified by reasons of better exploratory evaluation in the opinion of the Petrolmal Public Prosecutor ' s Office;

That in all cases, the deadlines shall be computed from the date of access of contractors to the exploratory period, by means of a fervent communication to the State Society Petroleum Deposits;

The establishment of a partial restitution system of areas, with the indication of the respective time frames and percentages, with an exception regime that foresees the realization of greater number of boreholes than those originally committed and agreed upon.

Once the exploratory period has been completed, the obligation of the contractors to re-establish the State Society Petroleum Deposits shall be established at their disposal, where no commercially exploitable deposits of hydrocarbons have been made, without any rights or obligations being measured by any party, except those resulting from the breach by the contractor.

(c) One Exploitation Period. In the event of hydrocarbon discovery, the contractors will have a period of one (1) year to evaluate and propose their trade declaration to the Implementation Authority without prejudice to the outstanding exploratory obligations in the rest of the area. Such a period may be extended to the trial of the Petroliferous Tax Authorities State Society, for up to one (1) year. At the request of the contractor, the enforcement authority shall make the commercial declaration of the lot of exploitation, confirming the ownership of the mining rights resulting from that declaration in the head of the National State.

Such a declaration shall be made within a maximum period of ninety (90) days from the successful receipt of the proposal by the Implementation Authority.

The deadline and silence on the part of the Implementation Authority shall be accepted and the declaration of commerciality issued on the last day of the period.

Such a declaration shall enable the contractor ' s access to the exploitation stage, in accordance with the terms and conditions of the respective contract.

The programmes of work and development should be submitted by the contractor for approval by the State Society Petrolmal Foundations, which may object to them and require the necessary modifications and corrections to meet the requirements of Article 5 of this Decree.

The declaration of commerciality does not limit the right of the Petroliferous Fiscal Deposits State Society to choose - when the quality of the crude is not suitable for processing in the country - to require the contractor to fully comprehend the production of the deposit and pay the corresponding price.

Declared by the Implementing Authority, the contractors will have a deadline for the implementation of the development and production tasks of up to twenty (20) years for each lot of exploitation, counted from that statement and independently between each lot.

In the event of the discovery of natural gas deposits, the Application Authority is empowered to condition its declaration of commerciality with the prior development of the natural gas market, the possibility of its industrialization and its transport capacity.

In the case of the preceding paragraph, the National Executive Power may, under the conditions established in a timely manner, authorize contractors to operate such deposits, where they commit to undertake all investments necessary to develop transport projects, re-engagement, industrialization in the country or to export them, at their sole position and risk.

In the case of the transport and industrialization projects referred to in the preceding paragraph, the valuation of the gas should take into account the royalty to be paid to the National State and a canon for the Petroliferous Tax Foundations State Society for every thousand cubic meters of natural gas used, which will vary according to the respective project and which will not exceed fifty per cent (50 per cent) of the price set in the same paragraph.

In case the natural gas produced is intended for re-injection or consumption of the operation itself, its use will be free of charge.

In any case related to the exploitation of natural gas deposits, its declaration of commerciality may not be suspended for a period exceeding 10 years, counted from the date of completion of the exploratory period.

In the opinion of the Petroliferous Public Prosecutors Society, when technically and economically justified, with intervention to the Authority of Implementation, the extension of the period of exploitation may be accessed based on subsequent increases of the recoverable reserve in each lot of exploitation, including the application of techniques to obtain greater reserves.

In all cases where the commerciality of a lot of exploitation is determined prior to the expiration of the period of exploration of the unused period of the latter may be added to the period of exploitation.

In all cases referred to in this paragraph, the maximum period of the period of exploitation in the area covered by the contract shall not exceed thirty (30) years from the expiration of the period of exploration.

With the end of the period of exploitation, the contractors will restore the contracted area and all its fixed facilities, as well as the necessary ones to maintain the area in the same operating conditions that exist at that time, which will become the property of the State Society Petroliferous Deposits, without charge;

(d) Guarantees. Guarantees to be provided by contractors to support the fulfilment of the valued work commitment, and the manner in which they will be restored, as the investment materializes; such guarantees shall be established within the time limit established in the contracts.

In addition, the clauses that ensure the performance of the contract shall be established, with specific penalties that may be terminated in cases foreseen in each case.

(e) Regulation. Canon. Exploitation result. On the value of the total production extracted in the area under contract and delivered to the Petrolfer Tax Deposits State Society (net production), it shall be established:

- The recognition in favour of the National State of a royalty of 12 percent (12 %), in conjunction with the principles contained in Articles 12 and in accordance with Law No. 17.319:

- The determination of a percentage to be set between 8 per cent (8 per cent) and 18 per cent (18 per cent) at the time of the call to international public contest for each lot of exploitation in favor of Petroliferous Taxes State Society, in concept of canon that will have two components: A fixed one that represents the recognition of the rights emanating from the Act No. 17.319, of the value of the hydrocarbon tasks carried out before

The remaining portion of the value of the total production will constitute the result of the exploitation and will be paid as the sole retribution to the contractors, except in cases where the State Society Petrolfers exercises its right of association in the period of exploitation.

In no case will the sum of royalty and canon exceed thirty percent (30 percent) of the value of the total production extracted.

(f) Association. A single-choice association regime of the Petrolfer Tax Deposits State Society shall be established for the period of exploitation of the whole declared commercial lot, under the legal form provided for in Articles 377 to 383 of Law No. 19.550, amended by Law No. 22.903, which necessarily covers:

- that the Petroliferous Public Prosecutions Society of the State shall exercise its option to associate within the period of ninety (90) working days counted from the declaration of commerciality of each lot of exploitation by the implementing authority;

- that, however, in the event of a substantial change in the technical and economic conditions taken into account for the declaration of commerciality, the State Society Petroleum Deposits will have a new option to associate itself with the contractor on an equal basis and from the time it has taken a fruitful understanding of the changing circumstances;

In both cases, the possibility of the exercise of the option should be assessed on the basis of the technical and economic studies justifying that decision, and the percentage of the participation should be determined according to the magnitude of the recoverable reserves in the exploitation of each deposit, investments and expenses to be carried out, the feasible levels of profitability and return appropriate for the implementation of each project. This percentage will be set at a minimum of fifteen percent (15 percent) and a maximum of fifty percent (50 percent).

- the obligation of the Petroliferous Fiscal Societies of the State to pay to the contractors in proportion to that participation of the direct costs of drilling and termination of the exploration wells that have been commercially productive and are incorporated into the production of each lot of exploitation, as well as in a timely manner all those to be carried out during the period of development and exploitation thereof.

(g) Retribution of Contracting Companies. The retribution of the contractors by the volumes of hydrocarbons extracted in the contract area and delivered to the State Society Petroleum Deposits shall be determined, where the latter has not exercised its right of association, as follows:

- in the case of liquid hydrocarbons: Depending on a percentage of the international price of the equivalent oil, value FOB, place of origin, with delivery in the place where the State Society Petroliferous Foundations determines, without this implicating substantially modifying the economic equation of the contract. This percentage will be the same as the result of the exploitation, defined in the article (e) on the value of total production;

- in the case of natural gas, according to the following variants, applying the one that determines a higher price:

(a) shall consist of a percentage set in the folds that shall not exceed per thousand cubic meters (1000 m3) of gas up to fourteen per cent (14 per cent) of the international price per cubic meter of a constant reference oil established by the Authority of Application, which shall be the same for all contracts, based on a corrective scale according to its calorific value of which the contract is to be deducted and given

(b) shall consist of the transfer price of the Petroliferous Tax Deposits State Society to Gas of the State Society of the State, discounted the royalty guaranteed by Article 13 of this Decree and the canon;

- liquefied gases: for each metric tonne delivered at the place where the State Society's Petroliferous Fiscal Developments determines, similar criteria will apply for liquid hydrocarbons.

Where the State Society Petrolfers has exercised its right of association, the contractors shall receive the corresponding percentage of the prices set, which shall be equal to the corresponding percentage on the value of the outcome of the exploitation.

(h) Payment form. The corresponding retribution to the contractors on liquid hydrocarbons extracted and liquefied gas delivered to the State Society Petroleum Deposits shall be paid in currency in the country and in currency, in the proportions fixed by the contracts.

Petroliferous Tax deposits State Society may choose to pay the contractors the currency payment component through processed products. These products will be valued at the FOB price of the product equivalent in international geographical point to be established in each of the folds and will consist in a specific nomenclator that will be part of the respective contracts as an Annex.

You may also choose to pay the crude oil contractors the integral part in payment currency when the National Executive declares that the conditions set out in Articles 3 and 6 of Act No. 17.319 are met.

In the case dealt with in the preceding two paragraphs, the amounts delivered as a payment shall be calculated in such a way as to enable the contractor to effectively obtain an equivalent amount of currency to which he or she is entitled in the event of his or her cash retribution, without prejudice to the fact that the contractor shall pay the retributive rates of services and respect Argentine flag reservations for maritime export.

The various payment options should be programmed by the State Society Petrolfers and communicated to the contractor quarterly and in advance not less than sixty (60) working days.

When the State Society's Petroliferous Authority ruled that the quality of the oil produced is not suitable for processing in the country's refineries, the retribution to the contractors will be paid with the same product. Petroliferous Public Prosecutions State Society will have the option for such contractors to buy the rest of the production of the area. The valuation shall be carried out in accordance with the guidelines set out in the respective contract. In such a case, and taking into account that the crude will be fully exported, the contractor must pay 12 per cent (12 per cent) provided for the royalty of the National State and the canon established in the respective contract for the Tax Petrolfer Societies of the State in full currency. As for tax retentions, if applicable, they will be paid in ordinary currency in the country.

(i) Retribution by natural gas extracted will be paid in ordinary currency in the country.

However, the possibility of partial payment in foreign exchange may be considered when its industrialization or marketing is for export.

(j) Operation of the Area. The operation of the contracted area, whether or not there is association, will be carried out by the contractors.

Art. 9o - The provinces in whose territory there are gas deposits, in the event that they decide in accordance with the policies of the National Executive Power to promote primarily the industrialization of origin, may agree on reductions or still renounce the royalties and percentage of canon in which they can participate.

In such a case, it shall be communicated to the Authority of Application and to the Petroliferous Tax Deposits of the State Society, for the purpose of transferring the benefits resulting in favour of the contractor or third parties that radiate the industries.

Art. 10. - The contractors will present with their offers a guarantee of maintenance of the same in the conditions and for the amounts set in the respective solicitation documents.

The call for an international public competitive examination shall be set out in the Official Gazette for five (5) days and not less than forty-five (45) days in advance for the day set for the receipt of the offers.

Without prejudice to the mandatory publication set out in this article, the call should be made available in places and by means deemed appropriate to ensure its widest dissemination, both in the country and abroad.

Petroliferous Public Prosecutor ' s Office through the Ministry of Foreign Affairs and Worship and the Secretariat for Foreign Trade will make the relevant communications aimed at achieving the widest publicity on international competitions in all countries with which the Argentine Republic maintains diplomatic or commercial relations.

Art. 11. - Petroliferous Public Prosecutor ' s Offices State Society will analyse all proposals and will be empowered to require the offeror who has submitted the most convenient, any improvements that it considers necessary to achieve satisfactory conditions.

By a well-founded resolution, the Petroliferous Fiscal Societies of the State will declare which offer is the most advantageous and once the respective contract has been signed, it will raise the corresponding hierarchical way for approval by decree of the National Executive.

Art. 12. - Contractor companies shall be subject to general tax rules.

They will pay annually and in advance a rate per square kilometre or fraction affected by the contract, the product of which will be intended to meet the costs incurred by the enforcement authorities in the exercise of police power.

This rate will be established by the Implementation Authority when each call to international public contest is available, taking into account the characteristic of the contested areas.

By virtue of the exploratory risk assumed by the contractors in the contracts established by this decree, as defined in Article 2 they shall be expressly applicable to the provisions contained in Article 15 of Law No. 21.778, taking as the determining date of the tax situation the call to the corresponding international public contest.

Petroliferous Public Prosecutors ' Offices of the State shall recognize the provinces that are in conformity with the regime established in the preceding paragraph, a fixed right of twenty-five per cent (25 per cent) of the canon referred to in Article 8, subparagraph (e) of this Decree, provided that they are committed not to increasing the taxes and contributions of the provincial or municipal taxes and not to creating new duties in respect of the contracts that arise in respect of the national taxes.

The provinces adhering to the tax stability regime should undertake such a commitment throughout the validity of the emerging rights or obligations of the contracts that take place as a result of this Decree.

Art. 13. - The National Executive Branch guarantees the provinces to accede to the regime of this Decree and to participate in the gas royalties, that in no case will the Nation receive inferior values than those received by the current deposits of hydrocarbons in operation, except the case provided for in Article 9o.

Art. 14. - Appropriate the bases of the "Secondment of conditions for the exploration and subsequent exploitation of hydrocarbons in various areas of the Argentine Republic" and the "Basic clauses of the type contract" that form part of the said fold included as Annex l of this Decree, instruments that may be modified by the Petrolfer Tax Authorities of the State when technical, economic or legal reasons justify it within the guidelines established by the present Decree

Art. 15. - Contractor companies shall comply in their submissions with the provisions of Act No. 18.875 Decree-Law No. 5.340 of 1 July 1963 and Decree No. 2.930 of 23 December 1970.

Art. 16. - Assign the Ministry of Works and Public Services to the Ministry of Energy the nature of the authority of application referred to in Article 97 of Law No. 17.319, which is empowered to issue complementary and interpretation of this Decree.

Art. 17. - Contact, post, give to the National Directorate of the Official Register and archvese.




Article 1

Article 2

Article 3 DEFINITIONS

Article 4 PRESENTATION OFFERS

Article 5 on "A"

Article 6 on "B"

Article 7 COTEJO BASES AND PROCEDURES

Article 8 of the Convention


ARTICLE 1

1.1. Call the International Public Competition for the Exploration and Further Exploitation of Hydrocarbons in each of the Areas whose surface, location, canon and other characteristics are contemplated in Annex 1 in accordance with Articles 2o, 11 and 25 of Law No. 17.319 and its Regulatory Decree and in the present Terms & Conditions.

1.2. Those interested in participating in the present International Public Contest will be able to purchase the Terms and Conditions at the Central Headquarters of Y.P.F. (Contract Management), located in Avenida Presidente Roque Sánez Peña 777, Piso 8o, Oficina 832, Capital Federal, República Argentina.

In the same place mentioned above and once the Terms and Conditions are purchased, the interested parties may acquire the technical documentation corresponding to the Areas in which they are interested in presenting their offers.

1.3. The Terms & Conditions and the technical documentation will be delivered to the interested parties at the location indicated in 1.2 after display of the respective payment receipts.


ARTICLE 2

To contract the exploration and subsequent exploitation of hydrocarbons in each of the areas covered in accordance with the conditions set out in this Pliego and the annexes that integrate it.


Article 3

3.1. Y.P.F.: Petroliferous Tax deposits State society as a contracting company, in its capacity as holder of the emerging rights of Article 6 of Law No. 17.319 on the areas covered and hydrocarbons that might eventually be located within those limits.

3.2. OFERENTE: The natural or legal person, or as a whole, who offers his services under the conditions of this Contest.

3.3. CONTRACT: The Contract provided for in Article 2 to subscribe between Y.P.F. and the offeror to whom one of the contested areas is adjudged.

3.4. CONTRATISTA: The Offerer who celebrates with Y.P.F. the Contract object of this Contest.

3.5. PART OR PARTIES:

3.5.1. PART: Y.P.F. or the Contractor.

3.5.2. PARTIES: Y.P.F. and the Contractor

3.6. DATE OF VIGENCE OF THE CONTRACT: The following day of the date of publication in the Official Gazette of the National Executive Decree to approve the respective Contract.

3.7. AREA OR AREAS: Each or all of those referred to in Article 1 of this Terms, the surface and location of which is determined in Annex 1.

3.8. LOTE IN EVALUATION: Within the limits of the area, the surface that the Contractor should delimit in order to determine whether the discovered deposit is commercially exploitable.

3.9. LOTE OR LOTES OF EXPLOTATION: Within the limits of the Area, the fraction or fractions in the(s) that commercially exploitable hydrocarbons are located, the(s) that must coincide as close as possible with all or part of the productive traps.

3.10. HIDROCARBUROS: Oil Crudo, Gas Natural and Gas Liquefied in any of the conditions and relationships in which they are linked.

3.10.1. Crude oil: Mixing of liquid hydrocarbons in its natural state or obtained by condensation or extraction of Natural Gas and remaining liquid under normal pressure and temperature conditions (760 mm Hg. and 15° C).

3.10.2. Natural gas: Mixing gaseous hydrocarbons in their natural state, in any of the following conditions are defined:

Associated gas: The gas linked to oil deposits and which can be found in the conditions of pressure and temperature of the reservoir in the form of gas dissolved in oil or free forming a gasiferous "catch" in contact with it.

Gas deposit: The gas found in this state in the conditions of pressure and temperature of the reservoir, lacks "retrograde" condensation properties.

Condensed gas deposit gas: The gas found in that state in the conditions of pressure and temperature of the reservoir has components that, due to isothermal decrease of the pressure, suffer the phenomenon of the "retrograde" condensation.

3.10.3. Liquefied gases: Propane and butane.

3.11. NEED PRODUCTION: Hydrocarbon volumes produced by the Contractor and delivered to Y.P.F. under the conditions set out in the Contract.

3.12 POZO OF EXPLORATION: For the purposes of the implementation of the Pre-Prospection Programme and the Perforation Programme, any well that is carried out in a structure or stratigraphic trap in which a productive well has not been previously drilled shall be considered Pozo de Exploración.

3.13. PREVIOUS PROSPECTION PROGRAMME: Tentative Work Plan proposed by the Contractor for the Pre-Prospection Period and which may be modified without diminishing the amount of committed Work Units.

3.14. PROGRAMME OF PERFORATION: Minimum and mandatory drilling program established by Y.P.F. in Annex 5, which the Contractor must comply with in the E-Exploration Period.

This programme, which has been disaggregated in its main headings, shall have monetary values assigned for the purpose of the Comptroller.

3.15. EVALUATION PROGRAMME: The Valued Work Programme that the Contractor must undertake in each Lote in Evaluation, in order to determine whether the discovered deposit is commercially exploitable.

This programme, which has been disaggregated in its main headings, shall have monetary values assigned for the purposes of the association provided for in Article 12 of Annex 2.

3.16. EXPLOTATION PROGRAMME: The Development and Production Work Programme that the Contractor will carry out in each Exploitation Lot.

3.17. PREVIOUS PROSPECTION PROGRAMME: Period during which the Contractor shall comply with at least the Pre-Prospection Program indicated in 3.13.

3.18. OF EXPLORATION: Period during which the contractor shall meet at least the Perforation Programme indicated in 3.14.

3.19. EXPLOTATION PERIOD: Period for the development and production of the Area and in which Y.P.F. may be associated or not, in accordance with Article 12 of Annex 2.

3.20. BOOKINGS: Estimated amounts of hydrocarbon reserves that geological and engineering data show with reasonable certainty that they will be recovered in the future, from known reservoirs and in economically convenient conditions at the date of each evaluation.

3.21. _ Its definition, scope and effects will be those provided for in the Argentine Civil Code (Articles 512 and 514 and concordants) and in Article 16 of Annex 2 to this Law.

3.22. AUTHORITY OF IMPLEMENTATION: Article 16 of Decree No. 1.443/85.

3.23. OPERADOR: Operator will be the company that the Contractor has proposed in his offer or the one that replaces it during the development of the Contractor on the proposal of the Contractor and accepted by Y.P.F.

3.24. AREA OPERATION: Set of tasks to be performed by the Operator, necessary to maintain the extraction, capture, treatment, etc. systems, including the corresponding studies, controls and checks to achieve a rational and efficient exploitation of hydrocarbons.

3.25. _ Difference to a certain date between the updated valuation of the Pre-Prospection Programme or the Perforation Programme and the updated valuation of the work actually carried out by the Contractor in order to implement such programmes.

The above-mentioned approach will also be applied to the Labour Units.

3.26. WORKING UNIT: Conventional economic unit that will allow comparing, measuring and adding works and services of different nature (meths of perforation, kilometers of seismic lines, surfaces carried with photogeology, etc.) and whose valuation will allow to obtain a total representative value of the various categories of the Pre-Prospecting Program offered.

3.27. EQUIVALENT PETROLEO: For the purposes of the Emerging Contracts of this Competition, equivalent oils will be considered as indicated in Deputy K of Annex 2.


ARTICLE 4

4.1. The offers will be received in the General Manuel Belgrano Hall of Acts (Piso 13) of the Central Headquarters of Y.P.F., located in Avenida Presidente Roque Sáenz Peña 777, Buenos Aires (Argentina Republic), closed with the following legend:

Petroliferous Taxes State Society - International Public Competition No ... Hydrocarbon Exploration and Exploitation in Various Areas of the Argentine Republic.

Within the envelope indicated in the first paragraph of the present point, two (2) envelopes will be presented, also closed, one corresponding to "Antecedents", identified with the letter "A" and the other with the letter "B" (identified also with the name of the offerer) that will contain the offer.

4.2. The offers should be clear and complete, written in Spanish, having to be presented in original and two (2) copies, signed in all their fojas by the or the persons who claim to be duly authorized by the offeror, which must be saved with their rubrics the scraps or amendments they contain.

4.3. The offers will be received until the hours of the day of 19 , an opportunity to be held in the General Assembly Hall Manuel Belgrano of the Central Headquarters of Y.P.F. (Avenida Presidente Roque Sáenz Peña 777, Piso 13, Buenos Aires, República Argentina) the act of opening the general envelope and the "A", with constancy of the reservation on "B" for its eventual consideration.

The analysis of the background contained in the "A" envelope and its subsequent approval will enable the opening of the "B" envelope of all those ofers who had been qualified.

4.4. If the background of the envelope "A" is not considered admissible, Y.P.F. shall communicate such a circumstance to the offender to the constituted home.

After fifteen (15) days after such notification, without the offerer having withdrawn the envelope "B", Y.P.F. will proceed to incineration.

4.5. The consultations and clarifications that the offerors wish to make should be presented in writing at the Directorate of Contracts of Y.P. F., located at its Central Headquarters (Avenida Presidente Roque Sáenz Peña 777, Piso 8o, Oficina 832, Buenos Aires, República Argentina) until the 19th inclusive.

Those arriving at Y.P.F. by postal or similar means shall also be considered before 2400 hours of that date.

The texts of the consultations and their response will be made available to all the acquirers of the Pliego.

4.6. Foreign companies that submit to the Competition shall comply with the obligation to associate with local companies (public or private), in a whole according to the provisions of Articles 8 and 11 of Law No. 18.875 and Article 8 of Decree No. 2930 of 23 December 1970, providing the relevant information from which the percentage of participation should arise.

4.7. Stay in US Dollars (U$S), amount of the supply maintenance guarantee for each of the Areas and in days the period of maintenance of the respective offer.

This guarantee will be included in the "A" envelope and may be made in cash, through bank endorsement, public values that collide in Bag, rubber insurance or other form similar to full satisfaction of Y.P.F.

Y.P.F. will not recognize interest for deposits of warranty, but those who accrue the securities or securities will belong to their depositors and will be available to them when the issuing entity made them effective.

The offerer whose bid has been selected must maintain the guarantee of supply maintenance until Y.P.F. accepts the guarantee of performance of the contract or the negotiations for reasons not attributable to the offerer.

4.8. In order to facilitate the preparation of the offers, the interested parties may visit and have access to the area of operations and to the Y.P.F. installations linked to the Areas concursadas, upon authorization by Y.P.F.


ARTICLE 5o

The envelope "A" must contain:

5.1. Findings that demonstrate the experience and capacity of the Offerers, both in the technical aspect and in relation to their economic solvency and financial support, so that, in the opinion of Y.P.F., they will ensure the fulfilment of their commitments in relation to this Contest.

When guarantees of technical, economic or financial support come from non-official third parties, they must be drafted in terms that explicitly ensure their enforceability, admitting as the sole condition of such enforceability that the contract is approved by the National Executive.

During the execution of the Contract such guarantees may only be replaced by express consent of Y.P.F.

5.2. Authentic documentation that credits the constitution of societies and the embodiment of their representatives.

5.3. Constitution of domicile in the Federal Capital of the Argentine Republic and acceptance of the jurisdiction of the Federal Courts of the Argentine Republic for all the effects derived from the Competition and the eventual Contract that is signed.

5.4. Express statement of companies that submit offers as a whole, of which it results their common and solidarity relationship with Y.P.F. to all the effects derived from the Contest, and must also constitute a common domicile and unify its personry.

5.5. In their case, the elements justifying their status as a local national capital company for the purposes provided for in 7.4.

5.6. Supply maintenance guarantee.

5.7. Official copy, signed, of the present Terms and Conditions and receipts of the acquisition of the same and of the respective technical documentation.

5.8. The Presentation Form according to model Annex 3.

5.9. Nomin and background of the professional technical staff of the Offererente.

5.10. Name and background of the Area Operator and his professional technical staff.

ARTICLE 6


The envelope "B" must contain:

6.1. The Preview Program mentioned in 3.13.

The proposed Working Units, corresponding to the Pre-Prospection Period, shall be carried out within a period of up to twenty-four (24) months for Medium-Risk Areas and up to thirty-six (36) months for high-risk areas, as identified at Annex 1. This period shall be counted from the date of commencement of the Contract.

These Working Units will be referred to a tentative programme that will include the conduct of geological, geophysical, geochemical, photogeological and any other exploratory nature and even the drilling of wells, to be carried out within the most modern and efficient techniques, valued and grouped according to the headings specified in Annex 4.

6.2. The percentage of the remuneration to be paid in ordinary currency in the country to offer, which may not be less than thirty percent (30 percent).

In the event of filing in two (2) or more Areas, the offerer must deliver an envelope "B" for each of these Areas.


ARTICLE 7

7.1. Y.P.F. will select for each contested area the best offer according to;

7.1.1. The amount of work units to be carried out in the period of pre-spection.

7.1.2. The percentage of the remuneration to be paid in ordinary currency in the country.

7.2. The selection will be made by choosing the offer obtained by the highest award factor, by applying the following formula:


Where:

F.A.: Adjudication factor.

U.T.O.: The number of work units offered by each offerer.

M.U.T.O.: The number of major work units offered for each contested area.

P.O.: The percentage of the retribution to pay in ordinary currency in the country offered by each offerer.

M.P.O.: The percentage of the largest retribution offered to pay in ordinary currency in the country for each contested area.

7.3. Y.P.F. will be empowered to require the Selected Offerer the improvements he deems necessary to achieve satisfactory conditions. It may also require any improvements it deems appropriate to facilitate selection if it considers that there is parity in offers.

Y.P.F. may refuse all offers when they do not consider them suitable or do not conform to the fold.

7.4. In the event of a parity of offers, Y.P.F. may give preference to the Offerer who is associated with a local national capital company that justifies to Y.P.F. satisfaction the requirements provided for in Article 2(4) of Law 21. 382.

7.5. The conditions of the offers that are opposed to the documents of the Contest or to the Argentine legislation shall be unwritten without invalidating the offers. Only those conditions that do not contract such documentation may be admitted, provided that their admission does not affect the equal treatment of offers for the purposes of their collection.


ARTICLE 8

8.1. With respect to each of the contested areas, Y.P.F. will proceed to subscribe with the offerer whose offer had been selected, the Contract object of this Contest, subject to the approval of the National Executive. The refusal or lack of approval of the Contract shall not give the right to claim or compensation.

8.2. In the event of divergences impeding the formalization of the Contract, Y.P.F. may reject the Selected Offerer and choose to call successively, for the purposes of such formalization, the offenders who follow him in order of merit or leave the Contest without effect.

8.3. The Contract model to subscribe between Y.P.F. and the Offerer is added as Annex 2 as an integral part of this Pliego.


Annex 1 - DOCUMENTATION OF LICITADA AREAS

Annex 2 - MODEL OF THE CONTRACT

Annex 3 - SUBMISSION

Annex 4 - PREVIOUS PROSPECTION PROGRAMME - LISTED OF WORKING ON ITEMS

Annex 5 - PROGRAMME OF PERFORATION

In accordance with Article 6 of the Approving Decree of this Annex I, annexes 1, 3, 4 and 5 shall be made by Y.P.F. on the occasion of each call to the International Public Competition.



Entre Yacimientos Petrolíferos Fiscales Sociedad del Estado, con domicilio constituted in Avenida Presidente Roque Sáenz Peña 777, de la ciudad de Buenos Aires, y.P.F. por una parte y.

with registered office

of the City of Buenos Aires, henceforth the Contractor, on the other hand, have agreed to hold the present Contract.


Article 1 - OBJECT

Article 2 - DEFINITIONS

Article 3 - PREVIOUS PROSPECTION PERIOD

Article 4 - Exploitation period

Article 5 - Exploitation period

Article 6.

Article 7 - OBLIGATIONS OF THE CONTRACTOR

Article 8 - INFORMATION TO ENTREGAR A Y.P.F.

Article 9 - SERVIDUMBRES AND DAMAGES

Article 10 - OF PRODUCTION AND

Article 11 - REGALIA - CANON - RESULTS OF EXPLOTATION

Article 12 - ASSOCIATION

Article 13 - ReTRIBUTION OF THE CONTRACTOR

Article 14 - FACTURATION AND FORMA DE PAGO

Article 15 - TRIBUTARY REGIME

Article 16 - FORTUITO CASE AND MAYOR FORCE

Article 17 - SESSION OF THE CONTRACT

Article 18 - DOCUEMNTS OF THE CONTRACT, JURISDICTION AND ARBITRATION

Article 19 - MORA and INCUMPANCE

Article 20 - CONFINDENCIALITY

Article 21 - FOLLOW-UP TO

Article 22 - COMMISSION ON ENLACE AND INSPECTION

Article 23 - EQUIPMENT TRANSFER

Article 24 - VARIOUS

Article 25 - FINAL


ARTICLE 1

Y.P.F. entrusts the Contractor and the Contractor is obliged to perform in three (3) consecutive periods the work aimed at the preview, exploration and subsequent exploitation of hydrocarbons in the Area " Province of ...

The Contractor shall assume all risks inherent in the exploitation of hydrocarbons and shall provide to his exclusive position the technology, capitals, equipment, machinery and other investments that are necessary for the preview and exploration of the Area of the Contract, as well as for the further development and production of the deposits that are eventually discovered and that they are declared commercially exploitable by the Authority of Application and without prejudice to the association that is possible.

The Contractor shall not acquire any mining right on the deposits that are discovered in the Contract Area or consequently the domain of the hydrocarbons extracted.


ARTICLE 2

Those corresponding to this Agreement are found in Article 3 of the Terms and Conditions.


Article 3

3.1. The contract area will be available to the contractor from the date of commencement of the Contract.

3.2. Stay in twenty-four (24) months for Medium-Risk Areas and in thirty-six (36) months for High-Risk Areas from the date of commencement of the Contract the period of the Pre-Prospection Period during which the Contractor undertakes to perform, at least, the amount of Work Units offered as indicated in Deputy B.

3.3. The value of the working units committed for this period is from US Dollars (US$...)

3.4. At the end of the period, or upon completion of the commitment of Working Units established in Deputy B, the contractor shall choose to access or not the Period of Exploration. In the event of access to this period, the specific task of drilling wells should be carried out in the structures that it had identified. Otherwise you can restore Y.P.F. the entire Contract Area without the need to await compliance with the terms, provided that it had fulfilled Y.P.F.'s satisfaction with the commitment of Labor Units.

In the event of restitution of the Area, no subsequent rights or obligations shall be mediated by any Party except those arising from the breach by the Contractor.

3.5. If it had not fulfilled Y.P.F.'s satisfaction, the Contractor must pay Y.P.F. the updated outstanding balance to be paid within thirty (30) days of restitution of the Contract Area, or of the end of the period, which occurs first.

3.6. During the development of the period the Contractor is empowered to make changes in the tentative program of Deputy B and other unscheduled works consistent with the objective of the Contractor, without diminishing its obligation for the entirety of committed Labour Units.

3.7. In addition, when a discovery of hydrocarbons by drilling wells occurs, without this freeing it from its obligation to comply with the total of Working Units committed and established in Deputy B, the Contractor shall, in accordance with the definition contained in Chapter III, paragraph 15 of Resolution S.E.E. 83/70 (Official Gazette of 8 June 1970), communicate it to Y.P.F.

3.7.1. Be within three (3) months of the discovery of Hydrocarbons, the maximum time for the presentation of the aforementioned Evaluation Program and in twelve (12) months, counted from the same time, the maximum time for its implementation. This term may be extended for up to one (1) more year in a single Y.P.F trial. if the proposed Evaluation Programme does so without prejudice to the fulfilment of the outstanding exploratory obligations in the rest of the Area.

In this presentation the Contractor will submit to Y.P.F. approval the surface whose commerciality will evaluate and be considered Lote in Evaluation once approved by Y.P.F.

3.7.2. If the Contractor determines that the deposit is commercially exploitable, he will present Y.P.F. the technical-economic evaluation that warrants it, providing all the necessary data for its study and consideration, as well as the Exploitation Programme and schedule of work and will submit to approval the surface to declare as Lote de Explotación.

Y.P.F. will have a deadline of up to one hundred and twenty (120) days to consider the Exploitation Program proposed by the Contractor and to raise the background that allows the App Authority to declare the commerciality of the Lote in Evaluation and to approve the Lote of Exploitation, an opportunity in which Y.P.F. will faithfully communicate to the Contractor such elevation.

The Implementation Authority will make the Lote's commercial declaration in Evaluation. Confirming the ownership of mining rights resulting from that declaration in the head of the National State.

Such a declaration shall enable the Contractor to access the stage of exploitation, in accordance with the terms and conditions of this Agreement.

Within the aforementioned period, Y.P.F. may object to the Exploitation Programme and require the necessary modifications and corrections to meet the requirements set out in Article 5 of the Approving Decree of the present.

The declaration of commerciality does not limit the right of Y.P.F. to choose - when the quality of the crude oil is not suitable for processing in the country- to require the Contractor to fully comprehend the production of the deposit and pay the corresponding price in the terms provided for in the last two paragraphs of point 14.5.

From the time the Implementation Authority makes the declaration provided for in 5.1., Y.P.F. may make use of the option to associate in accordance with Article 12.

If Y.P.F. makes use of the partnering option, the Exploitation Programme will be considered by the Parties in accordance with the provisions of Deputy J.

3.7.3. Where the Contractor determines that the deposit is not commercially exploitable, the immediate restitution of the Lote in Evaluation will occur.

3.7.4. If the evaluation programme is fulfilled, the deposit may be commercially exploitable for the Contractor, in the event of subsequent discoveries that permit its joint exploitation, the Contractor may choose not to propose the declaration of the commercial nature for a period equal to the time lacking for the expiry of the Exploration Period, including, where appropriate, the extension provided for in item 4.2. In this case, and until the eventual declaration of the commercial nature of the deposit occurs, the respective area will continue to be considered Lote in Evaluation.

3.7.5. In the event of the discovery of natural gas deposits, the Application Authority will be empowered to condition its declaration of commerciality to the prior development of the Natural Gas market, the possibility of its industrialization and its transport capacity.

In the case of the preceding paragraph, the National Executive Power may, under the conditions established in a timely manner, authorize the Contractor to operate such deposits, when it undertakes to make all necessary investments to develop transport projects, re-engagement, industrialization in the country or to export to its exclusive position and risk.

In the case of the transport and industrialization projects referred to in the previous paragraph, for the valuation of the Natural Gas the relevant royalty established in point 11.1 and a canon for Y.P.F., for every thousand cubic meters (1,000 m3) of Natural Gas used that will vary according to the respective project and which will not exceed fifty per cent (50 per cent) of the same price fixed in 13.2 as the corresponding project.

In any of the cases related to the exploitation of natural gas deposits, its declaration of commerciality may not be suspended for a period exceeding ten (10) years, counted from the date of completion of the Period of Exploration.

3.7.6. The oil obtained before the Implementation Authority approves the Exploitation lot, will be delivered by the contractor to Y.P.F., where the latter determines as set out in item 10.5.1.

Declared the commerciality and approved the Lote de Explotación Y.P.F. will recognize to the Contractor the volumes delivered and effectively taken advantage of CCudo Oil and will pay them in accordance with Articles 10, 13 and 14. If the contractual terms expire, the Contractor does not propose the declaration of commerciality, Y.P.F., it will recognize in favour of the Contractor a retribution by the Crude Oil delivered which will be up to twenty percent (20 %) of the retribution that has corresponded to it by the application of Articles 10, 13 and 14, in the nature of the operational cost of the extraction.


ARTICLE 4

4.1. Please note in forty-eight (48) months the period of the Exploration Period in which the contractor undertakes to carry out the detailed Perforation Programme in Deputy C. The Exploration Period will comprise two (2) sub-periods of twenty-four (24) months each.

4.2 The period of forty-eight (48) months will be computed from the date the Contractor has communicated to Y.P.F. In a fruitful way your decision to access the exploration period and may be extended twelve (12) or twenty-four (24) more months at the request of the Contractor and only Y.P.F. judgment, when justified by reasons of better exploratory evaluation.

The extension should be requested by the contractor in advance not less than three (3) months regarding the expiration date of the Exploration Period, accompanying the Perforation Plan that it proposes to carry out.

4.3. The value of the Perforation Programme has a total monetary value of U.S. Dollars ($s) as follows:


4.4. At the end of the first sub-period indicated at point 4.1, the Contractor will replace Y.P.F., at least fifty percent (50 percent) of the total area of the Area. If the Contractor performs in that sub-period greater number of wells than those committed in the Perforation Programme will cease the aforementioned obligation to restore.

4.5. At the end of the Exploration Period, the Contractor will restore Y.P.F., the total area, except the surfaces that would have been declared Lotes of Exploitation or Lotes of Evaluation.

4.6. At the end of each sub-period or at the end of the first twelve (12) months of each of them or its extension, the Contractor may opt for the total return of the Area, provided that it has completed the scheduled work to that date.

In the event of restitution of the Area, no subsequent rights or obligations shall be mediated by any Party except those arising from the breach by the Contractor.

If a compromised well does not reach the depth established in the Contract, the respective commitment will be considered to be fulfilled, if it were completed to Y.P.F. satisfaction and it considered the exploratory objective of the well to be realized.

If the Contractor had not fulfilled the satisfaction of Y.P.F., with the Perforation Program, he must pay, within thirty (30) days of the return of the Area or the end of the period, according to the case the Updated Earring.

The restitutions indicated shall be in accordance with the procedure provided for in the Resolution. of the former Secretary of State for Energy 501/69 (Official Gazette of 18/11/69).

4.7. When a discovery of hydrocarbons occurs, the Contractor shall proceed in accordance with the provisions of point 3.7, where instead of Total Working Units committed and established in Deputy B, "Programme of Perforation committed and established in Deputy C."

4.8. During the period of exploration, the contractor is empowered to perform outside the Programme of Perforation committed and, on its own and risk, other work consistent with the objective of this Agreement, without diminishing its obligation for the work committed.

4.9. The Contractor is obliged to present up to thirty (30) days before beginning each sub-period of exploration, technical memories of the work to be carried out in the sub-period that begins without diminishing the Program of Perforation committed or the effective realization of the objectives of the Contract.


ARTICLE 5o

5.1. Declared by the Authority of Application the commerciality of one (1) or more Lots in Evaluation the Contractor will have a deadline for the execution of the tasks of development and production of twenty (20) years for each Lot of Exploitation, counted from that statement and independently among them.

5.2. In the opinion of Y.P.F., when technically and economically justified, with the intervention of the Implementation Authority, the extension of the Period of Exploitation may be accessed according to subsequent increases of the Checked Reserve in each Lote of Exploitation, understanding the application of techniques that allow to recover further reserves.

5.3. In all cases where a Lote of Exploitation is determined before the expiration of the period of the Exploration period, the unused period of that period may be added to the period of the Exploitation period.

5.4. The full period of the Period of Exploitation in the Area under Contract shall not exceed thirty (30) years from the expiration of the period of the Exploration period.


ARTICLE 6

6.1. The Contractor shall provide the following guarantees:

6.1.1. Within thirty (30) days from the date of the beginning of the contract's vigilance, the contractor shall constitute a guarantee of compliance with the Working Units committed for the period of pre-trial inspection in the amount of U.S. dollars.

6.1.2. On the date of initiation of each exploration sub-period, the contractor shall provide a guarantee of compliance with the Perforation Programme in the amount of United States dollars.

Such guarantees must be incorporated in cash, through bank endorsement, public values that collide in Bolsa, insurance of caption to another form similar to full satisfaction of Y.P.F.

Y.P.F. will not recognize interest in the security deposit, but those who earn the securities or securities will belong to their depositor and will be at their disposal when the issuing entity made them effective.

6.2. The amounts of the guarantees will be adjusted and will be renewed quarterly as the Labour Units mentioned in 6.1.1 are met and/or the program referred to in point 6.1.2 is advanced, deducting from the amount of the guarantees 80 per cent (80 per cent) of the amounts corresponding to each completed well or to each of the remaining items completed in each quarter.

6.3. The guarantees established according to points 6.1 and 6.2., shall be returned to the Contractor within the ninety-ninety (90) days after the completion of each period, if no outstanding obligations remain.

6.4. Within thirty (30) days from the date of commencement of the Exploitation Period, the Contractor shall constitute a guarantee of compliance with the Contract.

The corresponding guarantee shall be constituted in accordance with the provisions of the penultimate paragraph of point 6.1. and in the amount of United States dollars. This guarantee shall be restored to the Contractor within the ninety-ninety (90) days of the termination of the Contract, if there are no outstanding obligations under its responsibility.

The last paragraph of point 6.1.

6.5. The values of the Working Units quoted in 6.1.1, as well as the program mentioned in 6.1.2. and their outstanding balances, will be updated according to the Industrial Price Index (Producer Prices - Industrial Commodities Indexes), published monthly in the Survery of Current Business of the United States Department of Commerce, taking as the base index for the month prior to the submission of bid corresponding for the previous month.

6.6. The amounts of the guarantees for the Labour Units referred to in 6.1.1 and that of the programme mentioned in 6.1.2 will be updated quarterly in accordance with the quarters indicated in 6.2.

The guarantee of the Exploitation Period will be updated annually.

The guarantees referred to at this point will be updated according to the procedure provided for in 6.5.


ARTICLE 7

1 Constitutes obligations of the Contractor, in addition to compliance with the rules of the Implementing Authority, the following:

7.1. To provide its exclusive position and risk the technology, capitals, equipment, machinery and in general all investments that are necessary for the proper performance of the Contract.

7.2. Execute your tasks according to the most rational, modern and efficient techniques in correspondence with the characteristics and magnitude of the reserves you check, while ensuring the maximum production of hydrocarbons compatible with the economic and technically adequate exploitation of the deposit.

7.3. Subcontractors who are employed shall possess recognized technical solvency and shall act under the exclusive responsibility and risk of the Contractor, who shall inform Y.P.F., the names and background of the subcontractors of drilling and special services prior to the initiation of the respective works.

7.4. Take the necessary measures to prevent damage to the deposits due to the drilling, operation, conservation or abandonment of wells, and must immediately inform Y.P.F. of any developments in this regard.

7.5. Avoid any hydrocarbon spill, by obliging the Contractor, if such thing happens, to respond to the damage caused as set out in 9.3.

Regardless of the provisions of the preceding paragraph, the Contractor shall pay the amounts provided for in 11.1. and 11.2. In the event that the spill is attributable to its fault, determined by the Implementation Authority, the amount provided for in 10.2 (a) must also be paid.

7.6. Take the security measures imposed by the legislation or advised by accepted practices in the field, in order to avoid or reduce sinisters of all kinds.

7.7. Take the necessary measures to prevent or reduce damages to agricultural activities, fishing and communications, as well as to water blankets found during drilling.

7.8. Comply during the development of its operations with the existing legal and regulatory provisions and those that the competent agencies make in this regard on national or provincial parks and the protection and conservation of wildlife, as well as any natural resource.

7.9. To adopt in the operations that are carried out in the sea, rivers or lakes, the necessary precautions to avoid contamination of the waters and adjacent coasts by complying with Rule 21, Annex I, "International Conference on the Pollution of the Sea", London 1973 (Second D of this Agreement).

7.10. Take all necessary measures to ensure that the waters from the dehydration of the Crude Oil, previously recovered the quantities of the same as possible, do not contain the surface of the land, rivers, lakes, etc., or the underground layers of public or private interest.

7.11. Submit to Decree Law No. 5,340/63, Law No. 18,875 and Decree No. 2,930/70, as well as applicable national, provincial and municipal legal and regulatory standards.

7.12. Arrange, in accordance with the procedure provided for in Decree No. 8.546/68, the Contract Area and hand over to Y.P.F. the corresponding plans within the first twelve (12) months of the date of commencement of the Contract.

Proceed in the same way for lots of exploitation within six (6) months from the beginning of the period of exploitation.

7.13. To employ, for the performance of the contract, at least seventy-five percent (75 percent) of Argentine citizens. This percentage shall be required upon completion of the third year on the date of commencement of the contract. For this purpose, the staff of subcontractors will also be computed.

Contractor or subcontractor staff performing tasks outside the country and the staffing and maintenance of exploration platforms and their ships and support aircraft shall not be computed for this purpose.

7.14. Facilitate access to the Y.P.F. inspection for the verification of operations and their technical and accounting documentation, without prejudice to the inspections and prosecutions established by existing legislation.

7.15. In all cases the Contractor shall act in accordance with generally accepted practices in the exploration and exploitation of hydrocarbons.

7.16. The contractor and its subcontractors are obliged to use in the execution of the contract's emerging activities, the fuels, fats and lubricants that are produced and expended by Y.P.F., provided that the same are appropriate to their destination and that there is sufficient existence in the area.

The acquisition, transport and storage of such products shall be by account and risk of the Contractor, and Article 11 of Act No. 17.597 applies.

The Contractor and its subcontractors shall be authorized to use special fats and lubricants not exempted by Y.P.F. when expressly required by the technical specifications or guarantees of the machinery or equipment affected by the contracted tasks.

7.17. At the time of the start of the Costa Aoutera operations, the Contractor must have a specific insurance coverage internationally recognized, for marine pollution, that will repair the operations carried out by the platforms and their services, including the affected support vessels, which must be approved by the Implementation Authority in the event of no objection. This insurance will have a sum of per sinister in the amount of 50 per cent (50 per cent) of that amount to cover the damage caused by pollution and 50 per cent (50 per cent) to remedies against it.

The performance of the present point does not release the Contractor from his responsibility for the damage caused.

7.18. Do not burn or sell gas, except authorized by the Implementation Authority. Any infringement shall generate payment of the amounts provided for in 11.1 and 11.2.


ARTICLE 8

8.1. During the performance of the Contractor the Contractor shall supply Y.P.F. with the following:

8.1.1. The programmes, information and technical documentation detailed in the Resolution of the former Ministry of Energy No. 83/70, as early as possible in advance of the deadlines provided for in that Resolution, for submission to the Implementation Authority.

8.1.2. Copy of the programs and results of all the basic records of wells, such as profiles, hydrocarbon control during drilling, training tests, flow measurement, pressures, cement and stimulation tasks.

8.1.3. All measurements, reports, studies and analysis that you have with the corresponding assessments, whether or not there has been commercial discovery, when required to:

(a) Fiscalizing the performance of the Contract.

(b) Control that the Contractor's obligations under this contract are carried out in accordance with the best rules of the technique.

(c) To comply with existing legislation.

(d) Any case of partial or total restitution of the Area.

8.2. What is established in 8.1. shall be provided in the form, opportunity and periodicity established in Deputy E, for the Pre-Prospection Period, for the Exploitation Period and during the implementation of the Evaluation Programme and in Deputy F for the Exploitation Period.

8.3. During the implementation of the programmes committed and within 10 days of the end of each month, the Contractor shall make available to the Y.P.F. Inspectorate in the Area, the information related to the work carried out during the month, for the purposes of its certification and subsequent application of the provisions of Article 6.


Article 9

9.1. The Contractor will exercise on behalf of the national state and with the intervention of Y.P.F. the rights agreed by the Mining Code in Articles 42° et seq., 48° et seq., and concordants of both, regarding the properties of tax or particular property located within or outside the limits of the Contract Area.

The relevant procedures will be carried out through the Publication Authority, and the resolutions adopted should be communicated to the jurisdictional mining authorities as appropriate.

The owner ' s opposition to the occupation itself or his lack of agreement with the compensation set, in no case will be sufficient cause to suspend or prevent the authorized work, provided that the Contractor successfully enforces any damage.

9.2. When the Area object of Contract is covered by the waters of seas, rivers lagoons or lakes, the Contractor shall exercise in the same way the same rights as indicated in 9.1., with respect to the coastal or coastal terrains with the Area or the coasts closest to them for the establishment of docks, warehouses, offices, communication and transport channels and other facilities necessary for the execution of the works.

9.3. The Contractor shall be responsible for the payment of the appropriate compensation and damages to the super-official owners and other affected third parties.


ARTICLE 10

10.1. In the event of access to the Exploitation Period, the Contractor has the right and the obligation to produce and deliver to Y.P.F. the maximum volumes of Crude Oil compatible with the provisions of item 7.2.

10.2. The production of Natural Gas shall be in accordance with the possibilities of reception and use according to the alternative provided for in point 3.7.5. Its burning or bandage is prohibited as set out in point 7.18.

10.3. The obligation of maximum production of Crude Oil referred to in point 10.1 does not include the obligation to re-engineer the Associated Gas that is dissolved in the Crude Oil, the prohibition to sell or burn it in other cases as indicated in point 10.2.

10.4. The Contractor may use without charge the necessary volumes of hydrocarbons produced in the Contract Area in re-engineering operations for the maintenance of pressure, "gas-lift", recycling, stimulation of wells and for the consumption of the operation itself.

10.5. The production of hydrocarbons will be delivered by the Contractor to Y.P.F. in the places and in the following conditions:

10.5.1. Crude oil: It must be delivered to the place that Y.P.F. determines without this implying a substantial change in the contract's economic equation.

The Contractor shall carry out the necessary facilities for storage, measurement and delivery, which shall be considered for the purposes of the Contract as if they were carried out within the Contract Area.

In the case of Marine Areas, the Contractor must build the necessary facilities to carry out the delivery on a boat (FOB condition). The above-mentioned facilities and locations must be approved by Y.P.F., who can only deny their approval for technically based reasons.

The facilities must have a minimum storage capacity of or equivalent to days of production, the largest of both figures.

The Crude Oil must conform to commercial conditions of delivery, measured in the delivery place, reduced to dry-seco and to fifteen degrees centigrade (15°C); the upper limit of water and impurities will be one percent (1 %) and the total salinity of one hundred grams per cubic metre (100 g/m3) expressed in Sodium Cloride (Cl Na). For delivery the Contractor must conform to the rules contained in Deputy G. Parties may modify the place of delivery if the magnitude of future volumes or other attentive factors make it desirable.

10.5.1.1. :

In the event that the water or salinity of crude oil exceeds the limits specified above, Y.P.F. will not be obliged to receive it. The Crude Oil not received by Y.P.F. for this cause will be resubmitted by the Contractor to the dehydration process until reaching the above values.

10.5.1.2. :

However, when for serious operational reasons the Contractor is prevented from reaching the specified limits, Y.P.F. will receive production out of specification up to a maximum of two hundred forty (240) hours per calendar year. In such case, the Net Production price received will be applied, a percentage discount equal to two and a half times the percentage of water and sediments or the value resulting from dividing by forty grams per cubic meter (40 g/m3) the total salinity contained in the total volumes delivered out of specification, applying to the higher one.

10.5.1.3. :

Y.P.F. will not be obliged to receive Crude Oil containing a percentage of water and sediments greater than 5% (5 %). If it resolves to accept it, both Parties will agree on the conditions of this delivery.

10.5.1.4. :

In the event that the impossibility of reaching the limits indicated above for the volumes produced come from facts or acts constituting fortuitous Case or Force majeure, the delivery period outside the specified thus elapsed shall not be computable for the purposes of the application of the specified time limit.

10.5.2. Natural Gas: It should be delivered in the section closest to the gastroncal gas pipeline of the State Society, at a pressure not less than seventy kilograms per square centimeter (70 kg/cm2) and at a maximum temperature of thirty-five degrees centigrade (35° C).

The conditions for measurement and specifications to which the volumes delivered should be adjusted are contained in Deputy H.

10.5.2.1. :

Y.P.F. will accept the production of Gas Natural de Contratista that Gas of the State is in a position to receive, having the Contractor mount and operate the necessary facilities. For transport, measurement and delivery at the location indicated in 10.5.2.

10.5.2.2. :

In case Y.P.F. is not in a position to receive the production of Natural Gas as set out in 10.5.2.1. the provisions of point 3.7.5 will apply.

10.5.2.3. :

Liquid hydrocarbons obtained from the gas phase after the first separation of oil, without external energy, will be called "condemned gas" and will be considered as Crude Oil to all effect.

10.5.2.4. :

Liquid hydrocarbons that are recovered as a result of gas conditioning for gas transportation by gas pipeline will be called "gasoline of gas" and will be considered as Crude Oil to all effect.

10.5.3. Liquefied Gas: For the fractionation of propane and butane in the area, the contractor may, upon authorization of Y.P.F., assemble and operate the installations necessary for its obtaining, subject to agreement on the percentages of performance and the storage and delivery facilities, complying with the Gas Processor Asociation (G.P.A.) regulations, publication 2140/75 and the standars of the American Society for Testing and Material (ASTM).

10.5.4. Restrictions on Reception: The reception of productions of Crude Oil, Natural Gas and Liquefied Gas can only be restricted for reasons of Fortuitous Case or Major Force or serious operational problems.

In the case of reasons arising from serious operational problems that do not constitute a Fortuitous Case or Force Major, Y.P.F. may only totally or partially restrict the delivery of Crude Oil by the Contractor, up to a maximum of days per calendar year and the delivery of Natural Gas up to a maximum of days per calendar year.

In case the serious operational problems impossibiliten Y.P.F. the total or partial receipt of the production, for longer than the periods indicated above, shall pay to the Contractor the following amounts:

(a) During the first ten (10) days following the expiry of the above-mentioned deadlines, twenty-five per cent (25 per cent) of unreceived production will be paid in that period.

(b) If the restrictions continue, the total amount of damages to the Contractor shall be paid.

10.5.4.1. : In the event of partial restrictions, the deadlines set at 10.5.4 shall be deemed to have been met when the volumes not received reach an amount equivalent to the total production corresponding to those periods.

10.5.4.2. : For the purpose of finishing unreceived production in the case of Oil Crudo, the average production of the thirty (30) last days prior to the beginning of the restrictions will be taken into account. With regard to Natural Gas, the average schedule of deliveries made in the last thirty (30) days prior to the beginning of the restrictions will be taken into account.


ARTICLE 11

On the value of net production, it is stated that:

11.1. A percentage of 12 per cent (12 per cent) will correspond to the National State for royalty.

11.2. A percentage will correspond to Y.P.F. as canon, which is composed of a fixed percentage and another variable depending on the production, according to a growing scale, as indicated in Deputy L.

11.3. The percentage remaining of the percent (%) will constitute the result of the exploitation.


ARTICLE 12

12.1. Y.P.F. may, in its sole opinion, associate with the Contractor for the exploitation of any Exploitation Lot, must communicate it in a fruitful manner within the period of ninety (90) working days counted from the time the Implementation Authority makes the declaration referred to in 5.1.

In the event that Y.P.F. did not make such communication at the prescribed time, it will be considered that it has decided not to associate itself for the exploitation of that Exploitation lot.

However, in the event of a substantial change in the technical and economic conditions taken into account for the declaration and commerciality, Y.P.F. will have a new option to associate with the Contractor, having to communicate such a decision within the ninety-nine (90) working days counted from the moment he has made a fruitful understanding of the changing circumstances.

12.2. In the event that Y.P.F. decided to join in the exploitation of an Exploitation lot, it must communicate to the Contractor, simultaneously with its decision to do so, the percentage of participation that it determines, which can be established between the fifteen (15) and the fifty percent (50 %) of the result of the exploitation.

12.3. On the basis of Y.P.F.'s notification to the Contractor of his decision to associate himself with the exploitation of a Lote de Explotación, a Transitory Union of Companies shall be established between the parties, in the terms of Articles 377 to 383 of Law No. 19.550, amended by Law No. 22.903.

This Transitory Business Union shall be governed by applicable legal rules and by clauses and conditions contained in Deputy J.


ARTICLE 13

13.1. Retribution of the Contractor by volumes of hydrocarbons extracted in the area and delivered to Y.P.F. in the places specified in Article 10 shall be determined, where the latter has not exercised its right of association, in accordance with the following points:

13.1.1. Liquid hydrocarbons

For every cubic meter delivered in the place that Y.P.F. designates as set in 10.5.1. the value to be determined according to a percentage of the international price of the Equivalent Oil, value FOB, place of origin, corresponding to the last business day of the month prior to the delivery of the production, published in Platt's Oilgram Price Report, in the denointed table "World Crude Oil Prices". This percentage will be the same as the result of the exploitation defined in point 11.3.

The above will also apply to liquid hydrocarbons defined in 10.5.2.3. and 10.5.2.4.

13.1.2. Natural gas

For every thousand cubic meters (1000 m3) of natural gas of nine thousand three hundred (9300), calories delivered in the place indicated in 10.5.2., the greater of the values that result from applying the result of the exploitation defined in point 11.3. to the equivalent value of up to 14 percent (14 %) of the international price per cubic meter of a constant reference oil that will be established by the Authority of Application, or the transfer price of Y.P.F. to Gas of the State Society.

13.1.3. Liquefied gas

For each metric ton of propane and butane delivered in the place that Y.P.F. determines, will consist of an amount equal to the fixed retribution for each cubic meter of liquid hydrocarbons in 13.1.1.

13.2. When Y.P.F. has exercised its right of association in accordance with Article 12, the Contractor shall receive the corresponding percentage of the fixed prices, which shall be equal to the corresponding percentage regarding the result of the exploitation defined in point 11.3.


ARTICLE 14

14.1. Billing: Within the first ten (10) days of each month the contractor will invoice the amount resulting from the application of Article 13 to the Net Production that he has delivered in the previous month, presenting fruitful records of the volumes verified by the Y.P.F. Inspection at the time of delivery. If the inspection had not been carried out for reasons attributable to Y.P.F., the volumes invoiced by it will be considered in principle, accepted by Y.P.F. for the purposes of the present. The volumes delivered will be considered definitively accepted by Y.P.F., if it did not make its observations founded within the (10) days of submission of the relevant invoice.

The volumes received by Y.P.F. that the Contractor fails to invoice involuntarily may be invoiced after the prices corresponding to the month of delivery. The Contractor shall not be entitled to interest in the amounts omitted in due course.

14.2. Payments: Except as provided for in item 14.5. the time limit for payment of invoices will be forty-five (45) days from the date of submission to the Central Headquarters of Y.P.F.

14.2.1. Invoices for Liquid Hydrocarbons and Liquefied Gas will be paid in ordinary currency in the country and US dollars according to the following percentages:

Current currency in the country.................. %

U.S. dollars............

The change to apply for current currency payments in the country will be the type of seller quoted by the Bank of the Argentine Nation at the end of the operations of the day prior to the payment or the previous working day, if that was traded.

14.2.2. The natural gas bills will be paid in currency in the country.

However, the possibility of partial payment in foreign exchange may be considered, when its industrialization or marketing is intended for export in accordance with 3.7.5.

14.3. Payment form: Foreign currency payments will be made by transferring the corresponding currency to the Bank of the Argentine Nation (New York Branch).

The Contractor may change the foreign bank indicated or add others, subject to Y.P.F. compliance. Such payments shall be deemed to be made "at the date of receipt of funds" in the designated bank. The bank commission shall be in charge of the Contractor, to the extent that it does not exceed the levels usually admitted to international banking practices. The Central Bank of the Argentine Republic will guarantee Y.P.F. and the Contractor (against the delivery of currency in the country in sufficient quantity) that without prejudice to any restrictions limiting the transfer of foreign currency to meet the emerging obligations of this Agreement, will deploy its best efforts to ensure the availability of them in a way that allows the payments.

If the Contractor chooses to receive foreign currency payments in the country, instead of receiving them abroad in accordance with the provisions of this article, he shall have the free availability and transfer abroad of such foreign currency.

All payments made by Y.P.F. in the country will be made at Y.P.F. Central Headquarters.

14.4 Non-compliance with payments: In the event of a non-payment within the foreseeable time frame, the appropriate amount will accrue an interest which Y.P.F. will agree at the time of the final Contract. Such interest shall be deriving without the need for judicial or extrajudicial appeals, from the expiration of the payment period and until such time as it becomes effective.

14.4.1. In the case of default of payment on term, at the request of the contractor Y.P.F., you will pay for the total or part of the amount owed with more the respective interest according to this point 14.4, which will be calculated for the period from the expiration of the period for the payment of the invoice until the expiration date of the payment in question.

Payments that eventually are issued will have a deadline of not more than one hundred and twenty (120) days.

14.4.2. In case you mediate Y.P.F.'s disagreement with the invoice presented by the Contractor, Y.P.F. must indicate the amount and concept questioned and the balance not questioned must be paid within the terms provided for in this Agreement.

The invoiced amounts that are observed by Y.P.F. but which are ultimately accepted will accrue the interest indicated in this point 14.4. for the time that exceeds its original maturity.

14.5. Payment with products: Y.P.F. may choose to pay to the Contractor the currency payment component set out in item 14.2.1. through processed products. These products will be valued at the FOB price of the equivalent product at an international geographical point established in Deputy I of this Agreement, where a specific nomenclator is also included.

You may also choose to pay the Contractor in Crudo Oil the integral part in currency of payment when the National Executive Power declares that the conditions established by Articles 3 and 6 of Law No. 17.319 are met, in which case the crude oil will be assessed in accordance with the provisions of point 13.1.1.1.

In the case dealt with in the preceding two paragraphs, the amounts delivered as a payment shall be calculated by deducting the costs of transportation in such a way that the Contractor may effectively obtain an equivalent amount of currency to which he or she is entitled in the event of his or her cash retribution, without prejudice to the fact that the Contractor shall pay the retributive rates of services and respect the Argentine flag reservation for the export by sea.

The various payment options should be programmed by Y.P.F. and communicated to the Contractor quarterly and in advance not less than sixty (60) working days.

When Y.P.F. decided that the quality of the Crude Oil produced is not suitable for processing in the refineries of the country, the remuneration to the Contractor will be paid with the same product Y.P.F. will have the option for the Contractor to buy the rest of the production of the Area. The valuation shall be carried out in accordance with the guidelines set out in this Agreement. In such a case and taking into account that the Crude Oil will be fully exported, the Contractor must pay the royalty and the canon provided for in Article 11 in favour of Y.P.F. in full currency. As for tax retentions, if applicable, they will be paid in ordinary currency in the country.


ARTICLE 15

15.1. The Contractor shall be subject to tax rules that result in general application.

15.2. The variation in retribution agreed with the Contractor shall be admitted, to the extent of the exact incidence resulting from differences in tax levels that occur after the increase or decreases in national or provincial taxes, the creation of new ones or derogation from existing ones and that reach the Contractor as the subject of law of the same.

Except for the forecasts of this point, the retributive rates of services and contributions for improvement.

15.3. The contractor shall bear the payment of the rate provided for in the second paragraph of Article 12 of the Approving Decree of the present.

15.4. In cases where special tax regimes are established, the canon to be paid by the Contractor will be raised in the exact proportion in which the tax incidence decreases.

15.5. And.P.F. notes that it will recognize the provinces that have received the regime established in Article 12 of the Approving Decree of the present, a fixed right equal to twenty-five per cent (25 per cent) of the canon referred to in item 11.2. provided that the same ones are committed not to increase the bonds of taxes, provincial and/or municipal taxes created and not to create new ones in relation to the national inventory itself.


ARTICLE 16

16.1. In the case of Fortuitous Case or Major Force, the rights and obligations arising from the Contract shall be suspended as long as the case lasts.

Each Party shall notify the other Party within thirty (30) days of known circumstances of the Fortuitous Case or Major Force, attaching all the documentation that at its discretion credits such configuration under Article 2 and informing the duration and extent of the suspension, the total or partial character and the nature of the Fortuitous Case or Major Force.

16.2. Any Party whose obligations have been suspended pursuant to the above shall, in full law, resume the obligation to comply with them as soon as the act of Fortuitous Case or Major Force disappears, without the right to claim compensation from the other Party for the period of inactivity elapsed, and must notify the other Party of this fact.

16.3. In no case shall the Fortuitous Case or Major Force be deemed to affect an obligation to deliver sums of money derived from the Contract.

16.4. Fortuitous Case or Major Force may not be invoked to extend the expiry date of the Exploitation Period.


ARTICLE 17

17.1. Prior to the express authorization of Y.P.F. and without this implying a modification of the Contract that requires approval from the National Executive, each of the contractors will be able to fully or partly yield the rights and obligations arising from the Contract for third parties that meet technical and economic skills acceptable to Y.P.F.

17.2. Each of the Contracting Companies may assign its participation in this Agreement to each other or to a controlling or controlled society in respect of the assignor or in respect of the controller of the assignor, in the terms of Article 33 of Law No. 19.550, while the assignor remains bound except express conformity of Y.P.F.

17.3. No assignment of the Contract shall be considered and therefore shall not be subject to Y.P.F. authorization. the cession of the rights to receive emerging payments from this Agreement which may eventually be made for funding.

In the event that such assignment of rights includes the authority of the assignee to propose to Y.P.F. the replacement of the Operator, such substitution cannot be made effective without Y.P.F. expressly approves the new Operator that is proposed in due course.


ARTICLE 18

18.1. This Contract shall be governed and interpreted in accordance with the laws of the Argentine Republic.

18.2. For the purpose of interpreting the Contract, the current legislation will be considered and the following order of priority of documentation is established:

(a) The Contract, its Deputys and amendments that may be agreed upon by the Parties.

(b) The terms of reference with its modifications and clarifications.

(c) The Contractor ' s offer.

(d) The documentation that the Parties exchange during the implementation of the Agreement.

18.3. The Parties shall resolve in good faith, through mutual consultation, any matter or dispute arising from or relating to the Contract and shall seek to reach a satisfactory agreement on such matters or disputes.

The divergences that may arise and which cannot be resolved between the Parties shall be submitted to the Federal Courts of the Federal Capital of the Argentine Republic, with express waiver of any other jurisdiction.

18.3.1. Without prejudice to the above provisions, the Parties of common agreement may submit to arbitration the divergences relating to the technical issues arising during the validity of this Agreement.

It will be understood by "technical questions" all those issues whose solutions depend substantially on establishing facts or circumstances concerning a determining art or profession.

18.3.2. In order to commence arbitration, the Parties of common agreement shall formalize an arbitral undertaking by appointing a sole arbitrator, setting the points to be submitted to its decision and establishing the time limit for the award.

In the event that the Parties do not agree on the appointment of the sole arbitrator, each Party shall designate its own arbitrator in the same act. In the case of formalizing the arbitration, a Party shall not designate the appropriate arbitrator, the same shall be appointed by the President of the Supreme Court of Justice of the Argentine Nation.

Within twenty (20) working days of the second arbitrator, both arbitrators shall jointly designate a third arbitrator.

If there was no match for the appointment of the third arbitrator, the same will be appointed by the president of the Supreme Court of Justice of the Argentine Nation.

The arbitrators should be persons of recognized experience and qualification on the technical issues raised. The arbitral award will be appealable.

The rules on arbitration of the Code of Civil and Commercial Procedure of the Argentine Nation shall apply.


ARTICLE 19

19.1. In all cases, in order to be in arrears to one of the Parties, the other must first make a fruitful appeal.

19.1.1. The total or partial non-compliance with any substantial obligation by one of the Parties, which does not originate in the Fortuitous Case or Major Force, shall authorize the performing party to resolve the Contract, subject to the other party ' s intention to require due compliance with that obligation within a period not less than fifteen (15) days.

19.1.2. In any case, whether it elects compliance or the resolution, the compliant Party shall have the right to claim the relevant damages.

19.2. In the event of total or partial non-compliance by Y.P.F. with its obligation of payment assumed in this Agreement, following compliance with the seizure established in point 19.1 the Authority of Application at the request of the Contractor shall instruct Y.P.F. to make available to it an amount of crude oil equivalent to the amount owed with more its interest, in conditions such that this form of payment would have obtained the second use of equal economic results.

19.3. Without prejudice to the provisions of item 19, the compensatory amounts for those who wish cases of breach of the Contractor shall be filled:

(a) For acts or omissions imputable in the name of guilt or dolo that originate spills in the production of hydrocarbons, an amount equal to once and a half the value corresponding to the sum of the concepts defined in points 11.1 and 11.2, as "criminal clause".

If the application of item 7.6 required the burning or sale of the Natural Gas, the contractor shall only pay, if any, the compensation provided for in item 7.18. In any case, the provisions of point 9.3 shall apply. When the burning or sale of the gas has been generated by its fault or dolo, the Contractor shall pay the amount provided for in the first paragraph of this subparagraph (a) for "criminal clause".

(b) Unwarranted failure to comply with the time-frames resulting from the Contract and the omissions reiterated in the delivery of the information shall authorize Y.P.F. to apply fines that may not exceed in each case of one percent (1 %) of the original updated amount of the warranty provided for in point 6.4, which shall be graduated according to the severity and incidence of non-compliance.


ARTICLE 20

20.1. During the validity of this Agreement, any data or information, whatever its species or nature, related to its development, shall be treated by the Parties and the Operator as strictly confidential, in the sense that its content shall not be disclosed in whole or in part to third parties, without prior written consent of the other Party. The information required by governmental authority or financial entities or those that are made to companies that are in the situation provided for in Article 33 of Law No. 19.550 concerning any of the companies that are members of the Contractor is exempt from such limitation.

20.2. The Parties shall take appropriate measures to ensure that their employees, agents, representatives, leaders and subcontractors comply with the same confidentiality obligations as set out in this article.

20.3. All information concerning those areas of Area that are restored to Y.P.F., shall be exclusively owned by it, who may freely dispose of it as such restitution occurs, the obligation of confidentiality of the Contractor and the Operator up to two (2) years after the total restitution of the Area.


ARTICLE 21

21.1. If there are deposits that extend beyond the limits of the Contract Area, the Contractor shall undertake a study of the existing total reserves, for which Y.P.F. will provide you with all the geologic-mineral information that you have available corresponding to the adjacent area.

21.2. According to this study, the Contractor will attempt to conclude an agreement with the or adjacent parties on the conditions of exploitation. In case of agreement, it will be submitted to Y.P.F., who must be issued within the sixty (60) days of his presentation.

21.3. If the adjacent area was operated by Y.P.F. or not in operation. both Parties shall undertake a study to determine the best method for their exploitation, seeking to reach an agreement within the one hundred and eighty (180) days of the situation by any Party.

21.4. If an agreement is not reached in the situations referred to in the preceding points of this article, Y.P.F. will raise the case ' s record to the Implementation Authority, which will impose the conditions of exploitation of the border areas of the areas.

21.5. In the cases of points 21.2. and 21.3, Y.P.F. will raise the background to the Implementation Authority, reporting on the agreements reached.


ARTICLE 22

22.1. The Liaison Commission shall be constituted and operate as follows:

22.1.1. Within thirty (30) days of the date of commencement of the contract, a Liaison Commission shall be constituted, consisting of two (2) representatives of each Party, in order to facilitate the solution of problems and differences that might arise in the performance of the Contract.

22.1.2. The Liaison Commission shall issue its own rules of procedure, schedule of meetings and orders of the day.

22.2. Both Parties shall designate representatives based on the site of the Contract Area, who shall record all activities related to the acts of the Contract relating to the inspection of the work, to the reception by Y.P.F. of the hydrocarbons produced and other communications between the Parties in books of "Service Orders" and "Company Orders", which will be expressed in Spanish.

22.3. The Y.P.F. Contract Management, located at its Central Headquarters, will represent Y.P.F. in all matters arising from the implementation of this Agreement. All that correspond to it shall be presented before it, for whose answer it shall be, besides fully authorized.


ARTICLE 23

23.1. The total or partial return to Y.P.F. of one or more Exploitation Lots, whether due to the period of the Exploitation Period, advance restitution or contract resolution that was not attributable to Y.P.F., will import the transfer in favor of Y.P.F., without any charge, of full right and free of any tax, of the same production wells with their equipment in normal conditions for operation.

23.2. The offices, depots, houses and supplementary facilities of the contractor ' s property in the Control Area will also be transferred without charge, with all the necessary equipment for the operation.

23.3. In the event that the Contract's resolution is attributable to Y.P.F., this company will pay the replacement value of the elements mentioned in the above points less its amortization and depreciation by state of conservation and use.

23.4. In the case of early restitution, the elements set forth in this article are linked to another Lote or Lotes of Exploitation that the Contractor continued to exploit, Y.P.F., as the owner of the same, may allow the Contractor to use such elements without charge, to the extent of its involvement in the Lote or Lotes of remanent exploitation.

23.5. The equipment and elements will be transferred in good condition of conservation and use which implies the obligation of the Contractor to carry out its proper maintenance until the time of the transfer.

23.6. In the Pre-Prospection period and in the Exploration Period, the Contractor shall only transfer the drilled wells.


ARTICLE 24

24.1. The deadlines set out in this Agreement include the untiring days unless otherwise stated.

24.2. The titles of the articles only respond to reasons of ordering and reading comfort without legal scope and will not be used for the interpretation of the Contract.

24.3. In the face of any event that might jeopardize the physical security of the facilities and the production within the Contract Area, the Contractor shall immediately notify Y.P.F. and the competent authorities so that they may take all the measures that the circumstances require.

24.4. The Parties recognize that this Agreement is based and reflects the conditions of the International Public Contest No.

24.5. In recognition of the fact that a fluid and rapid execution of the operations contemplated here is for mutual benefit, the Parties agree to implement the terms of this Agreement with the diligence and reasonableness of a good businessman.

The Parties shall consider any necessary changes in the contractual terms if such changes are of mutual benefit and shall agree, if necessary, to them subject to the approval of the National Executive.

The Contractor and subcontractor shall directly request the National Customs Administration of the Argentine Republic to permit the dispatch of goods and goods to square in the conditions established by the legislation governing at the time, at the earliest possible time, for which Y.P.F. will issue the certifications that are relevant.


ARTICLE 25

25.1. The present "ad referendum" contract of the National Executive is extended under Article 11 of Decree No. 1.443/85 and pursuant to Article 98 of Law No. 17.319.

25.2. The signing of this Agreement shall not generate for Y.P.F., the Contractor and the National State, any right until its approval by the National Executive.

25.3. Y.P.F. shall not pay any amount in respect of this Agreement in respect of seal taxes because it is an act that will have effects on the establishment of national utility.

25.4. , assume in solidarity both active and passive all the obligations and emerging rights of this Agreement and unify its personry in

25.5. They subscribe to this Agreement on behalf of Y.P.F. and the Contractor.

25.6. The present Contract extends in the City of Buenos Aires, in the days... of the month... of the year..., in two (2) copies of the same tenor and a single effect.

STATE SOCIEDY PETROLIFERS.

THE CONTRACT


Deputy A - AREA OF THE CONTRACT

Deputy B - PREVIOUS PROSPECTION PROGRAMME

Deputy C - PROGRAMME OF PERFORATION

Deputy D - INTERNATIONAL CONFERENCE ON CONTAMINATION OF THE SEA

Deputy E - INFORMAICON BASICA TO SUMINISTRATE BY THE CONTRACT OF PREVIOUS PROSPECTION AND EXPLORATION PERIODS

Deputy F - BASICA INFORMATION TO SUMINISTRATE BY THE CONTRACTOR FOR THE PERIOD OF EXPLOTATION

Deputy G - RECEPTION CONDITIONS OF THE CRUDO PETROLE

Deputy H - NATURAL GAS RECEPTION CONDITIONS

Deputy I - PAYMENT WITH PRODUCTS

Deputy J - MODULE OF ASSESSMENT

Deputy J1 - CONTABILITY PROCEDURES

Deputy K - EQUIVALENT PETROLEO

Deputy L - CANON COMPONENTS

In accordance with Article 6(2) of the Approving Decree of this Annex I, the above attachments shall be made by Y.P.F. on the occasion of each call to the International Public Contest.