(Note Infoleg: by art. 1 Decree No. 941/88 arts were repealed. 4, 5 and 6 of this Decree. For Act No. 23,678 B.O. 03/07/1989 the validity of the same was restored. ). HIDROCARBUROS Please note that the Energy Secretariat will set the "Pozo Bank" value of liquid and gaseous hydrocarbons for the settlement of the royalties provided for in articles 59 and 62 of Law 17.319. Decree No. 631

Bs. As. 28/4/87

VISTO Expediente Nro. 36.304/87 of the Registry of Energy and Decree No. 2.227 of 24 October 1980, and

CONSIDERING:

That under the provisions of Decree No. 2227 of 24 October 1980, the provincial jurisdictions in whose territories are deposits of liquid and gaseous hydrocarbons would be affected by their income levels as a result of the adjustment in the prices of the international crude oils used for the determination of the value of the relevant national oil royalties and oils.

It is the intention of the National Government to ensure during 1987 a level of income similar to that of 1986 in the provincial jurisdictions benefited from the payment of royalties by the National State, despite the decline in international oil prices used as a reference for the calculation of the same.

That the implementation of Decree No. 2.227 of 24 October 1980 would lead to a substantial reduction in the amounts to be received, mainly since May of the current year.

That such a measure, as it implies a financial effort on the part of the National Government, aims to contribute to the attention of the provincial budgets involved.

On the other hand, through the Commission established by decree No. 1.105 of 2 July 1986, the implementation of the final regime to be applied in the matter is considered as of 1 January 1988.

That it is necessary to implement a transitional system of application in this year.

That it is reasonable to consider that only the portion of the royalty referred to the domestic sale price F.O.B. of the oil and to the transfer price of the natural gas are in charge of Yacimientos Petroliferos Fiscales Sociedad del Estado.

That the present provision does not imply the modification of the provisions of Decree No. 1.671 of 9 April 1969.

That the executive branch is empowered to issue the measure in order to the provisions of article 12 of Act No. 17.319.

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Art. 1o La The Energy Secretariat, in its capacity as the implementing authority of Law No. 17.319, shall set the mouth value of the liquid and gaseous hydrocarbons, for the liquidation of the payment and royalties provided for by the arts. 59 and 62 of Act No. 17.319, beginning on 1 May 1987, henceforth, on the basis of monthly adjustment for the variation in the wholesale price index, published by the National Institute of Statistics and Censuses, the values set by Resolution S.E. No. 655 of 1 December 1986.

Art. 2o . Tax oil deposits, Society of the State, starting from the validity of this decree, will liquidate in favor of the corresponding provincial jurisdictions, in terms of oil royalties and natural gas, the amounts arising from applying the mouth values of wells resulting from applying the provisions of Article 1 of this Decree.

Art. 3o Los The amounts referred to in the previous article will be paid to the provincial jurisdictions of the thirty (30) days following the last working day corresponding to the month of calculation of the royalties of oil and natural gas. Art. 4o La The General Treasury of the Nation will contribute monthly to the Fiscal Petroliferous Deposits, the State Society as compensation for royalties, the amounts that arise from considering the mouth values of well emerging from the application of the provisions of Article 1 of the present, with respect to those that originate the ninety-six percent (96 %) of the local sale prices F. O. B. of the national oils.

Art. 5o La The General Treasury of the Nation, under the specific headings included in the General Budget of the Nation, will contribute to the Petroliferous Fiscals, Society of the State, as compensation for royalties, the amounts that arise, for the period 1 January to 30 April 1987, to consider the mouth values of well set by Resolution S. E. No. 40 and 122 dated 30 January and 16 March 1987, respectively, with respect to those originating in the ninety-six percent (96 percent) of the sales prices F. O. B., of national oils and the local price of transfer between natural gas companies, fixed by the Energy Secretariat for the same period.

Art. 6th . Tax Petroliferous Foundations, Society of the State shall monthly communicate to the Ministry of Finance the differences by the General Treasury of the Nation, which correspond to the compensations for the difference of royalties provided for in this Decree. Art. 7o . Revise Decree No. 2227 of October 24, 1980.

Art. 8o . Communicate, publish, give to the National Directorate of the Official Register and archvese.