DECEMBER No. 1029/95

HIDROCARBUROS

Approve the award of the International Public Contest No. E-01/92 for the Area: CCL-03 "Coronel Dorrego".

Bs. As. 07/07/95

VISTO Issue No. 751.430/94 of the SECRETARIAT of ENERGY of MINISTERY OF ECONOMY AND ARTWS AND PUBLIC SERVICES, and

CONSIDERING:

It is the objective of the NATIONAL GOVERNMENT to achieve the deregulation and demonopolization of each of the stages that make up the oil industry.

To that end, and in the context of the privatization process, a number of programmes have been implemented, promoting through the active participation of venture capital the reactivation of the production of hydrocarbons as an element generating greater expansion and development of the national economy.

That this policy on hydrocarbons should be supported by increased exploratory efforts both in the National Territory and in the Continental Shelf in order to expand the geological knowledge that would allow the incorporation of new oil and gas reserves.

That the characteristics of exploratory work are of such significance that they require technical and economic capacity in accordance with the obligations arising from this activity.

That in this regard, the granting of Exploration Permits under the terms of Law No. 17.319 is an appropriate procedure to channel investments leading to the discovery of hydrocarbons.

To that end, the Authority for the Application of the aforementioned Law No. 17.319 has called for the International PUBLIC CONCURSE No. E-01/92, Tenth Round, in which they submit to tender Areas of Exploration according to the provisions of this legal rule.

That the approval of the award made by Resolution No. 263 of 17 August 1994 of the SECRETARIAT OF ENERGIA under the MINISTERY OF ECONOMY AND ARTWORKS AND PUBLIC SERVICES, and the granting of the Permission of Exploration to those who have offered to carry out the largest amount of Work Units in each of the tendered areas.

That the procedures used in the process of tendering and awarding the Areas of Exploration were carried out in an entire manner in accordance with the provisions of Decree No. 2178 of 21 October 1991, approved by the Terms and Conditions.

That Act No. 23,696 empowers the NATIONAL EXECUTIVE POWER to provide for the exclusion of all privileges and/or monopoly clauses and/or discriminatory prohibitions even if they derive from legal norms, the maintenance of which is contrary to the objectives of privatization or deregulation (Article 10 of Act No. 23,696)

It is up to the Law Enforcement Authority No. 17.319 to monitor the activities of the Permissionaries and to verify compliance with the obligations provided for in the Act.

That Articles 18 and 98 of Act No. 17.319 and Act No. 23.696 grant powers for the dictation of the present.

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Article 1 Approve the award of the International PUBLIC CONCURSE No. E-01/92 for the Area: CCL-03 "CORONEL DORREGO".

Art. 2o.- Contact the company BRIDAS SOCIEDAD ANONIMA PETROLERA, INDUSTRIAL AND COMMERCIAL a Permission of Exploration on the Area CCL-03 "CORONEL DORREGO", in order to carry out tasks of search for hydrocarbons under the regime of Articles 16 et seq. of Law No. 17.319 for the period established in Decree No. 2178 of October 1991, from the present decree. This area will be defined by the following provisional coordinates:

 COORDENADAS GAUSS-KRUGER ; Esq. X & 1 5.785.000 5.471,000 2 Costa line 5.471,000 Continues by Costa Line to Esquinero 3 Costa line 5.370.000 4 5.785.000 5.370.000 

Art. 3. The Permissionary shall perform during the First Period of Exploration CINCUENTA (50) Working units engaged in his offer, plus the Minimum K Base in the period of THREE (3) years. The Labour Units are discriminated against in Annex I, which is part of this decree.

Art. 4o.- In case of opting to access the Second Period of Exploration, the Permissionary shall perform at least one (1) Pozo de Exploración más CIENTO CINCUENTA (150) Unites de Trabajo en ese Period. When, for perfectly demonstrated technical reasons, prospective work should be carried out, prior to the drilling of the well, the Applicable Authority may authorize the Exploratory Power to be carried out in the Third Period of Exploration. If the Third Period is not accessed, the Permissionary shall pay the Updated Earring for the unrealized well. The value of the Working Units that exceed the amount of Work Units that the Permissionary was required to perform shall be deducted from that balance.

Art. 5o.- In the event of opting for access to the Third Period of Exploration, the Permissionary shall be obliged to drill one (1) well for exploration, without prejudice to the provisions of the previous Article. If the Permissionary does not make the investments committed for that period, the amount of investments not made and committed to the NATIONAL STATE shall be paid to the NATIONAL STATE. The Permissionary may effect the equivalence of the amounts if the type of work performed was different from that initially committed for the period.

Art. 6o.- The Permissionary may make use of the extension period, which may not exceed the maximum period of CUATRO (4) years. Such extension may not be used for the First Period of Exploration.

Art. 7o.- The Permissionary may make advance use of the Extension Period provided for in the previous Article by adding to the expiration of the Second Period of Exploration, up to UN (1) year. The unused remnant of such extension may be added to the Third Period of Exploration.

In the event that the Exploration Permit is composed of only DOS (2) Periods, by application of point 2.14 of the Terms of Procedure approved by Decree No. 2178 of 21 October 1991, the extension may only be added to the Second Period of Exploration.

Art. 8o.- For the calculation of the remaining area mentioned in Article 26 of Law No. 17.319, the Permissionary shall be entitled to exclude, in addition to the surfaces transformed into Exploitation Lots, the following:

(a) For a period of up to UN (1) year, the area of lots whose commercial declaration is under consideration; and

(b) For a period of up to CINCO (5) years, the surface of the lots corresponding to predominantly natural deposits, conditioned to the previous development of the Natural Gas market, to the possibility of its industrialization and to the capacity available for its transport. Such a period may be prolonged, up to a maximum of TEN (10) years, by the Implementing Authority in the event that the subsistence of undesirable market conditions is checked.

Art. 9o.- If the Permissionary does not comply with the realization of the Working Units committed to the First Period, the Earring Balance Updated within the TREINTA (30) days of restitution of the Area or the completion of the First Period of Exploration, which occurs first.

Art. 10.- In the following periods, the waiver of the Permission of Exploration or the failure to comply with its obligations and commitments, as set out in Articles 80 and 81 of Law No. 17.319, shall oblige it to pay the NATIONAL STATE the amount corresponding to the engaged and unrealized Working Units corresponding to the period in which such waiver and/or non-compliance occur within the TREINTA (30)

If in any of the Periods the Working Units made exceed the respective commitments, the Permissionary may impute what has been done in excess of the period or subsequent periods.

Art. 11.- The Permissionary shall pay annually and in advance, for each square kilometre or fraction, the canon provided for in Article 57 of Law No. 17.319 and Decree No. 3036 of 31 May 1968, the amount of which is fixed by the NATIONAL EXECUTIVE PODER and maintained without any other update than that resulting from the application of Article 102 of Law No. 17.319.

Art. 12.- The Permissionary shall have the right to obtain UNA (1) Concession of the Exploitation of Hydrocarbons which he discovers within the perimeter of the Permission, in accordance with Article 17 of Law No. 17.319. The concession holder shall have the free availability of hydrocarbons produced in that area, in accordance with Article 6 of Law No. 17.319, Article 15 of Decree No. 1055 of 10 October 1989 and Articles 5 and 6 of Decree No. 1589 of 27 December 1989, the terms of which are incorporated into the title of the concession.

Art. 13.- Within the TREINTA (30) days from the date of publication of the present decree, the Permissionary shall, in full satisfaction of the Authority of Application, constitute a guarantee of compliance of the Units of Labour described in Annex I to the present, for an equivalent amount in American Dollars.

On the date of initiation of the subsequent periods of exploration and within the same time period, the Permissionary shall constitute a guarantee of compliance with the drilling programme established for that period, under the same conditions as those detailed above.

Art. 14.- The amounts of the guarantees shall be adjusted and renewed on a quarterly basis as the Labour Units and/or the drilling programmes referred to in the preceding article are met, deducting from the amount of the guarantees the CIEN per CIENTO (100%) of the amounts corresponding to each completed Working Unit or well completed.

Art. 15.- For the purposes of computing the limitations set forth in Article 25 of Law No. 17.319, when the holders of an Exploration Permit constitute a distinct legal person or assume the form of a COMPANY TRANSITORY UNION (U.T.E.) or association, the restriction shall be applied only in the case of equal membership.

Art. 16.- Within the OCHENTA SCIENTA (180) days counted from the date of validity of the Exploration Permit, the Permission shall carry out the messure of the corresponding area and submit it to the Application Authority.

Art. 17.- The Permissionary shall conform to Resolution No. 319 of 18 October 1993 of the SECRETARIAT of ENERGIA under the MINISTERY of ECONOMY and ARTWS and PUBLIC SERVICES, in all matters relating to the delivery of information and technical documentation, and to any other rule that the Authority of Application dictates.

Art. 18.- The Permissionary of Exploration shall be subject to the general legislation regulating the imposition of profits and shall not be subject to provisions that may discriminate against or specifically encumber the person, status or activity of the person, or the assets affected to the exploration or to the tasks arising therefrom; Article 56, subparagraphs (c) and (d) of Act No. 17.319 is not applicable.

Art. 19.- Please refer to the SECRETARIAT OF ENERGIA under the MINISTERY OF ECONOMY AND ARTWS AND PUBLIC SERVICES to approve the provisions of the Exploration Permit relating to technical matters, including the arbitration procedure provided for in Article 86 of Law No. 17.319.

Art. 20. Invite the General Writer of the Government of the Nation, in accordance with Article 55 of Law No. 17.319, to protocol to the Register of the NATIONAL STATE without charge, the instruments to be forwarded by the SECRETARIAT of ENERGIA under the MINISTERY of ECONOMY and PUBLIC SERVICES.

Art. 21.- At the time established by Article 22 of Law No. 24.145, the NATIONAL EXECUTIVE PODER shall transfer to the Province of BUENOS AIRES the domain of the area specified in Article No. 2 of this Decree.

Art. 22.- Contact, post, give to the National Directorate of the Official Register and archvese.-MENEM - Domingo F. Cavallo.

Annex I

DISCRIMINATION OF WORKING UNITIES

TENTATIVE PROGRAMME OF WORK AREA: CCL-3 "CORONEL DORREGO"

 EQUIVALENCE IN A WORKING PARTIES GEOFISIC REGISTRATION OF REFLEXION 200 Km. 50 TOTAL WORKING UNITS . 200