Law No. 17.319. Modification.

Original Language Title: Ley Nº 17.319. Modificación.

Read the untranslated law here: https://www.boletinoficial.gob.ar/#!DetalleNorma/10575598/20160703

HYDROCARBONS hydrocarbons law 27.007 law Nº 17.319. Modification. Sanctioned: October 29 of 2014 enacted: October 30 of 2014 the Senate and Chamber of deputies of the nation Argentina gathered in Congress, etc. sanction with force of law: title I modifications to the law 17.319 article 1 °-replace is the article 23 of the law 17.319 and their amended, by the following text: article 23: them deadlines of them permissions of exploration will be set in each tender by the authority of application, according to the objective of the exploration, according to the following detail: term basic : Scan with conventional purpose: 1st. period up to three (3) years. 2nd. period up to three (3) years. Extension period: up to five (5) years. Exploration with unconventional aim: 1st. period up to four (4) years. 2nd. period up to four (4) years. Extension period: up to five (5) years. For the explorations in the platform continental and in the sea territorial each one of them periods of the term basic of exploration with objective conventional may increase is in a (1) year. The extension provided for in this article is optional for the permit holder has complied with the investment and other obligations in charge. The partial transformation of the area of the exploration permit in granting of exploitation performed before the expiry of the basic period of permission, in accordance with article 22, authorized to add the not elapsed time of the exploration permit, excluding the term of the extension in the term of the concession. At any time the permit holder may waive all or part of the area covered by the exploration permit, without prejudice to the obligations prescribed in article 20.
Article 2 ° - article 25 17.319 law and its amendments, replaced by the following text: article 25 https://www.boletinoficial.gob.ar/pdf/linkQR/Z2RhaTFFZzlDVFpycmZ0RFhoUThyQT09: exploration permits will cover areas whose surface does not exceed one hundred (100) units. Which are granted on the continental shelf shall not exceed one hundred fifty (150) units.
Article 3 ° - Replace article 26 of law 17.319 and its modifications, by the following text: article 26: at the end of the first period of the basic period the permit holder will decide if it continues to explore in the area, or if it reverts it completely to the State. The permit holder may retain the area originally granted, provided that you have given good compliance to the obligations of the permit. At the end of the basic period the permit holder will return the total area, except if it exercised the right to use the period of extension, in which case such restitution shall be limited to fifty percent (50%) of the area remaining before the expiration of the second term of the basic period.
Article 4 °-replace is the article 27 of the law 17.319 and its amended, by the following text: article 27: the concession of exploitation confers the right exclusive of exploit them deposits of hydrocarbons that exist in them areas covered in the respective title of concession during the term that fixed the article 35. Holders of exploration and/or exploitation of hydrocarbons concessions permits subjects shall have the right to request the enforcement authority a grant of exploitation not conventional hydrocarbons, in the terms provided in article 22 or article 27 bis, as appropriate.
Article 5 ° - merge as article 27 bis of the law 17.319 and its amendments, the following: article 27 bis: understood by non conventional exploitation of hydrocarbons extraction of liquid and/or gaseous hydrocarbons using unconventional stimulation techniques applied in located in geological formations of rocks deposits schist or shale (shale gas or oil shale), compact sandstone (tight sands (, tight gas, tight oil), coal (coal bed methane) layers or, in general, characterized by the presence of rocks of low permeability. The concessionaire of exploitation within the concession area, may require the subdivision of the area into new areas of non-conventional hydrocarbons exploitation and granting a new concession of exploitation not conventional hydrocarbons. Such request must be founded on the development of a pilot plan that, in accordance with acceptable technical and economic criteria, is aimed at commercial exploitation of the discovered site. The application authority national or provincial, as appropriate, will decide in the term of sixty (60) days and its term will be calculated in the manner referred to in article 35. Holders of a concession of non-conventional exploitation of hydrocarbons, which, in turn, are holders of a concession for the exploitation existing and adjacent to the first, may apply for the unification of both areas as a single non-conventional exploitation concession, provided that is irrefutably established the geological continuity of these areas. Such request must be founded on the development of the pilot scheme referred to in the preceding paragraph. The concession of the area promptly granted and not affected new granting of exploitation not conventional hydrocarbons, shall remain by deadlines and under previously existing conditions, and must the awarding authority readjust the respective title to the resulting https://www.boletinoficial.gob.ar/pdf/linkQR/Z2RhaTFFZzlDVFpycmZ0RFhoUThyQT09 of the branch extension. Is established that the new award of exploitation not conventional hydrocarbons must have as main objective the non conventional exploitation of hydrocarbons. However this, the authorisation holder may develop complementary activities of conventional exploitation of hydrocarbons, within the framework of the provisions of article 30 and matching of this law.
Article 6 ° - merge as article 27 ter of the 17.319 law and its amendments, the following: article 27 ter: projects of tertiary production, Extra heavy oil and offshore to their productivity, location and other characteristics technical and economical unfavorable, and that they be approved by the enforcement authority and by the Committee of planning and strategic coordination of the National Plan of investments hydrocarbon , may be subject of a reduction of royalties of up to the fifty percent (50%) from the authority of application provincial or national, according to correspond. Are considered projects of production tertiary those projects of production in that is apply techniques of recovery improved of the oil (Enhanced Oil Recovery-EOR- or Improved Oil Recovery-IOR-). Be considered projects of oil Extra heavy those that require treatment special (quality of crude lower to 16 degrees API and with viscosity to temperature of reservoir top to them 1000 centipois).
Article 7 °-replace is the article 29 of the law 17.319 and their amended, by the following text: article 29: them concessions of exploitation will be granted, according to appropriate, by the power Executive national or provincial to them people physical or legal that exercise the law agreed by the article 17 fulfilling them formalities consigned in the article 22. The Executive Branch national or provincial, as appropriate, may be also granted exploration areas tested those who meet the requirements and comply with the procedures prescribed by section 5 of this title. This type of concession does not in any way guarantee the existence in such areas of commercially exploitable hydrocarbons. The Executive Branch national or provincial, as appropriate, also grant concessions of exploitation not conventional hydrocarbons according to the requirements provided by articles 27 and 27 bis.
Article 8 ° - replacing article 34 of law 17.319 and its modifications, by the following text: article 34: the maximum area of a new concession of exploitation that is granted from the entry into force of the present and which do not come from an exploration permit, will be of two hundred and fifty square kilometers (250 km2).
(Article 9 °-replace is the article 35 of it law 17.319 and their amended, by the following text: article 35: according to the following classification them concessions of exploitation will have them validity established then, which is count from the date of the resolution that them grant, with more them additional that are of it application of the article 23: to) concession of exploitation conventional of hydrocarbons : twenty-five (25) years. (b) granting of exploitation not conventional of hydrocarbons: thirty and five (35) years. This time https://www.boletinoficial.gob.ar/pdf/linkQR/Z2RhaTFFZzlDVFpycmZ0RFhoUThyQT09

It will include a period of pilot Plan up to five (5) years, to be defined by the concessionaire and approved by the enforcement authority to when starting the award. (c) granting of exploitation with the continental shelf and territorial sea: thirty (30) years. Them holders of them concessions of exploitation (already is that to it date of home of validity of the present modification have been or not so extended) and whenever have met with their obligations as dealers of exploitation, are producing hydrocarbons in them areas in question and present a plan of investments consistent with the development of the award, may request extensions by a term of ten (10) years of duration each an of them. The respective application is submitted with one notice not less than one (1) year upon expiration of the concession. It is established that those concessions of exploitation that have been previously extended to the date of enactment of the present law shall be governed until the deadlines for such extensions by the terms and conditions. Once exhausted these periods of extension, the holders of concessions for exploitation may request new extensions, and must comply with the extension conditions established in this law.
ARTICLE 10. -Replaced article 41 17.319 law and its modifications, by the following text: article 41: the concessions referred to in this section shall be granted and extended for periods equivalent to those awarded for concessions of exploitation linked to transport concessions. Defeated such deadlines, facilities will be the domain of the State national or provincial as appropriate without charge or lien whatsoever and full.
ARTICLE 11. -Replaced article 45 of law 17.319 and its modifications, by the following text: article 45: without prejudice to the provisions of article 27 bis, permits and concessions regulated by this law will be awarded through bids in which any natural or legal person who fulfils the conditions laid down in article 5 ° and meets the requirements in this section may submit tenders. Concessions resulting from the application of articles 29, first paragraph and 40, second paragraph, shall be awarded in accordance with the procedures laid down in title II of this law.
ARTICLE 12. -Replace section 47 of the Act 17.319 and amended, by the following: article 47: prepared the call for tender in any of the procedures considered by article 46, the enforcement authority will produce the respective base specifications specification model, made between the authorities of application of the provinces and the Ministry of energy of the nation which recorded for illustrative and with mention of its origin, the information available concerning the submission of proposals. Also the specification shall contain the conditions and guarantees which should satisfy bids and made the foundations will be taken into consideration to assess the suitability of the proposals, such as the amount and the time limits of investments in works and works that are committed. The call for tender shall spread for not less than ten (10) days in places and by national and international media that are considered suitable to ensure its wider knowledge, looking for more possible, and it must necessarily include among these, concurrency, the Official Gazette. The publications shall be made with a minimum anticipation of sixty (60) days to the https://www.boletinoficial.gob.ar/pdf/linkQR/Z2RhaTFFZzlDVFpycmZ0RFhoUThyQT09 indicated for the commencement of receipt of tenders.
ARTICLE 13. -Replace is the article 48 of the law 17.319 and their amended, by the following text: article 48: the authority of application will study all them proposed and may require of those providers that have presented them of greater interest, them improvements that consider necessary to reach conditions satisfactory. The award will be held by the tenderer who has submitted the most suitable offer that duly founded the Executive national or provincial criteria, as appropriate, in particular propose greater investment or exploration activity. Is attribution of the power Executive national or provincial, according to appropriate, reject all the offers presented or award to the only offeror in the tender.
ARTICLE 14. -Incorporate is to the title II of the law 17.319 and their amended the section VII "Canon and royalties", that will understand them articles 57, 58, 59, 60, 61, 62, 63, 64 and 65, and replacements them articles 57 and 58 of the law 17.319 and its amended by them following texts: article 57: the holder of a permission of exploration will pay annually and in advance a canon by each kilometer square or fraction (, in accordance with the following scale: to) run basic: 1st. period: two hundred fifty pesos ($ 250). 2nd. period: thousand pesos ($ 1,000). (b) extension: during the first year of its term will pay in advance the sum of Seventeen thousand five hundred pesos ($ 17,500) per Km2 or fraction, increasing that amount in twenty five percent (25%) annual cumulative. He amount that must be paid by this concept corresponding to the second period of the term basic and to the period of extension may reset is compensating it with them investment effectively made in the exploration within the area corresponding, until the concurrency of a canon minimum equivalent to the ten percent (10%) of the canon that appropriate depending on the period by Km2 that will be paid in all them cases.
Article 58: The concessionaire of exploitation will pay annually and in advance a barrel by each square kilometre or part thereof covered by the area of four thousand five hundred pesos ($ 4,500).
ARTICLE 15. -Merge as article 58 bis of law 17.319 and its amendments, the following: article 58 bis: application of authority may establish for the extensions of exploration, a bonus payment of extension, the maximum amount of which shall be equal to the result of multiplying proven reserves remaining at the end of the term of the concession by the two percent (2%) average price applicable to the respective hydrocarbon basin during the two (2) years prior to the time of the grant of the extension. In the case of supplementary activities of conventional exploitation of hydrocarbons, from the expiration of the period of validity of the timely concession and within the granting of non-conventional exploitation of hydrocarbons, the enforcement authority may establish a bonus payment of exploitation whose maximum amount shall be equal to the result of proven reserves remaining associated with the conventional exploitation of hydrocarbons at the end of the term of the concession promptly granted and by two by https://www.boletinoficial.gob.ar/pdf/linkQR/Z2RhaTFFZzlDVFpycmZ0RFhoUThyQT09% (2%) average price applicable to the respective hydrocarbon basin during the two (2) years prior to the time of the granting of the concession of exploitation not conventional hydrocarbons.
ARTICLE 16. -Replaced article 59 17.319 law and its modifications, by the following text: article 59: dealer of exploitation shall pay monthly to the licensor in respect of royalty on the produced from liquid hydrocarbons extracted in wellhead, a percentage of twelve percent (12%). Identical percentage of the value of the volumes extracted and effectively utilized, will pay monthly production of natural gas, in concept of royalty. For the payment of the royalty gas value will be fixed according to the procedure indicated for crude oil in article 61. The payment in kind of the royalty only proceed when dealer ensure reasonable permanency of reception. In both cases the Executive Branch national or provincial, as applicable as authorities licensors, may reduce it to five percent (5%), taking into account productivity, conditions and location of wells. Also in case of extension, shall be responsible for the payment of a further royalty of up to three percent (3%) with respect to the royalty applicable at the time of the first extension, and up to a maximum total of eighteen percent (18%) royalty for the following extensions. In cases of concessions of exploitation referred to in the last paragraph of article 35, shall be responsible for the payment of a total royalty which may not exceed eighteen percent (18%). By carrying out complementary activities of exploitation of conventional hydrocarbons, which referred in article 27 bis of this law, from the expiration of the term of the concession promptly and within the granting of exploitation not conventional of hydrocarbons, the enforcement authority may also fix a royalty of up to 3% additional (3%) with respect to the royalty applicable up to a maximum of eighteen percent (18%) as appropriate in accordance with the mechanism laid down in article 35. Aliquots of royalty provided for in this article will be the only mechanism of income on the production of hydrocarbons that will receive regular jurisdictions in the domain of hydrocarbons in the role of Concessionees.
ARTICLE 17. -Replaced section 61 of 17.319 law and its amendments, by the following text:

Article 61: The payment in cash of the royalty shall be carried out according to the value of the crude oil at the wellhead, that will be issued monthly by the permit holder or licensee, subtracting fixed according to the rules laid down in subparagraph (c)) paragraph I of article 56, the shipping of the product to the place that has been taken as a basis to set its commercial value. When the authority of application consider that the price of sale informed by the permit holder or dealer not reflects the price real's market, should formulate them objections that consider relevant.
ARTICLE 18. -Incorporate is as article 91 bis of the law 17.319 and their amended, the following: article 91 bis: them provinces and the State national, each one with relationship to the exploration and exploitation of them resources hydrocarbon of their domain, not established in the future new areas reserved in favor of entities or companies public or with participation State, any outside its form legal. With regard to areas which to date have been reserved by the Concessionees authorities on behalf of entities or provincial enterprises with State participation, whatever its legal form, but https://www.boletinoficial.gob.ar/pdf/linkQR/Z2RhaTFFZzlDVFpycmZ0RFhoUThyQT09 that do not have contracts of association with third parties, the date can be associative schemes, in which the participation of such entities or provincial companies during the phase of development will be proportional to the committed investments and that are effectively carried out by them.
Title II regime of investment promotion for the exploitation of hydrocarbons article 19. -The State will incorporate the investment promotion regime for the exploitation of hydrocarbons, created by Decree 929/13, the projects that involve the realization of direct investment in foreign currency not less than two hundred and fifty million US dollars (U$ S 250.000.000) calculated at the time of the presentation of the "project of investment for the exploitation of hydrocarbons" and to be invested during the first three (3) years of the project. The benefits provided for in this Decree shall be recognised from the third year following the implementation of the respective projects. The percentage of hydrocarbons regarding which apply to the benefits referred to in articles 6 and 7 of the aforementioned Decree, shall be as follows: to) conventional exploitation: twenty percent (20%). (b) exploitation not conventional: twenty percent (20%). (c) exploitation coast outside: sixty percent (60%). Will be included in subparagraph (c)) precedent, exploitation offshore projects in which drilling is performed in locations where the distance between the seabed and the surface, measured at the location of the well, on average between high and low tide exceed 90 meters. All other project operating offshore that does not meet these requirements, must be framed within paragraphs a) or b) as appropriate.
ARTICLE 20. -The conditions for access to the investment promotion regime for the exploitation of hydrocarbons laid down in article 19, shall apply from the entry into force of this law, recognizing investment projects for the exploitation of hydrocarbons approved previously, investment commitments and promotional benefits committed at the time of its adoption.
ARTICLE 21. (- In the framework of investment projects for the exploitation of hydrocarbons that are approved in the future by the Commission for planning and strategic coordination of the national hydrocarbon Investment Plan, referred to in article 19 of this law, are established the following contributions to the producing provinces in which the investment project to develop: to) two point five per cent (2.5%) of the amount of initial investment of the project aimed at Corporate Social responsibility, to be provided by the companies. (b) an amount to be determined by the Commission for planning and strategic coordination of the National Plan of investments hydrocarbons, depending on the magnitude and scope of the investment project to finance infrastructure projects in the producing provinces, to be provided by the State.
ARTICLE 22. -The assets of capital and inputs that are essential for the implementation of the https://www.boletinoficial.gob.ar/pdf/linkQR/Z2RhaTFFZzlDVFpycmZ0RFhoUThyQT09 investment plans of companies registered in the national registry of hydrocarbon investments, because they are imported by such enterprises or those who prove to be of them, service providers will be taxed import duties indicated in the Decree 927/13 or rules that replaced it. This list may expand it to others products strategic.
Title III transitional and supplementary provisions article 23. -The national State and the provincial States, in accordance with the provisions of article 41 of the Constitution, propenderán to the establishment of a uniform environmental legislation, which will have as a priority to apply best environmental management practices to the tasks of exploration, exploitation and transport of hydrocarbons in order to achieve the development of the activity with a proper care of the environment.
ARTICLE 24. -The national State and the provincial States will lead to the adoption of a uniform tax treatment that promotes activities hydrocarbons provided for in this law to develop in their respective territories.
ARTICLE 25. -The national executive power through the planning and strategic coordination of the National Plan of investments hydrocarbon Commission will administer the stimulus program to the surplus Natural Gas created by resolution 1/13 and the "program of stimulation to the injection of Gas Natural for companies with injection reduced" created by resolution 60/13, in both cases the Commission's planning and strategic coordination of the National Plan of investments hydrocarbon injection , and plans with the purpose of stimulating natural gas surplus production set in the future.
ARTICLE 26. -Them authorities of application of the field national and provincial according to corresponds, the Secretariat of energy of it nation and it Commission of planning and coordination strategic of the Plan national of investments hydrocarbon, promote the unification of them procedures and records aimed to the compliance of their respective competencies and the exchange of information with said purpose and with the compliance of them objectives of self-sufficiency planned in it Law 26.741.
ARTICLE 27. – Repeal of article 62 of law 17.319 and its modifications.
ARTICLE 28. -The Executive Branch national or provincial, as appropriate, as authority licensor, may be reduced to twenty five percent (25%) the amount of royalty applicable to the production of hydrocarbons and during the ten (10) years following completion of the pilot project, in favor of companies that request a concession of non-conventional exploitation of hydrocarbons, in the terms of article 27 bis 17.319 law and its amendments , within the thirty-six (36) months from the date of entry into force of this law.
ARTICLE 29. -The authorities in application of the provinces and the Ministry of energy of the nation will make within one hundred and eighty (180) days counting from the beginning of the entry into force of this law the specification model established in article 47 of the law 17.319 and its amendments, which may be reviewed and updated periodically according to the opportunity and convenience of tenders. Said https://www.boletinoficial.gob.ar/pdf/linkQR/Z2RhaTFFZzlDVFpycmZ0RFhoUThyQT09 specifications model will include the terms and conditions applicable to tenders, including inter alia, guarantees that offers, must conform the scope of investments and the income that could possibly correspond to the respective licensors authorities. Also the model specification will contain special conditions applicable to contracts whose object is the exploration and/or conventional exploitation of hydrocarbons, non-conventional operation, offshore, extra heavy oil exploration in areas of border and other situations that can be referred to by the law-enforcement authorities.
ARTICLE 30. -Repeal is the article 2 ° of the law 25.943, leaving for this purpose reversed and transferred all them permissions of exploration and concessions of exploitation of hydrocarbons of them areas costa outside national to the Secretariat of energy of the nation, with regard to which not exist contracts of Association subscribers with energy Argentina society anonymous in the frame of it law 25.943. Exceptions made this reversion to exploration permits or concessions of exploitation existing at the entry into force of this Act which have been granted before the law 25.943. Authorize the National Executive to negotiate by mutual agreement, within a period of six (6) months, with holders of Association contracts that have been signed with Energia Argentina Sociedad Anónima within the framework of the law 25.943, conversion of associative contracts exploration permits or concessions of exploitation of 17.319 law and its amendments , as appropriate.

ARTICLE 31. -When at the date of entry into force of this law any province had already begun the process of extension which concerns article 35 17.319 law and its amendments, with respect to concessions granted by the State, and provided that such process had established certain conditions precedent according to the will of the province and of the respective concessionaire and laws , this province will have of a term of ninety (90) days to conclude the process of extension through the dictated of them acts administrative necessary to charge of the power Executive provincial. The extensions as well certain will subsequently have treatment which provides for article 35 17.319 law and its amendments.
ARTICLE 32. -Communicate is to the power Executive national.
GIVEN IN THE CHAMBER OF THE CONGRESO ARGENTINO, BUENOS AIRES, TWENTY-NINE DAYS OF THE MONTH OF OCTOBER IN THE YEAR TWO THOUSAND FOURTEEN.
-REGISTERED UNDER NO. 27.007 - AMADO BOUDOU. -JULIAN A. DOMINGUEZ. -Lucas Chedrese. -John H. Estrada.

Date of publication: 31/10/2014 https://www.boletinoficial.gob.ar/pdf/linkQR/Z2RhaTFFZzlDVFpycmZ0RFhoUThyQT09