Argentina: Decree 484/2022 – Regulation of the benefit of access to the foreign exchange market for the hydrocarbon industry
Decree 277/2022 (“Decree“) was regulated by Decree 484/2022, published in the Official Gazette on August 16, 2022 (“Regulation“).
The decree created the Foreign Exchange Market Access Regimes for Incremental Oil Production (RADPIP) and Natural Gas Production (RADPIGN) and provides flexibility to access the Foreign Exchange Market (MLC) for a percentage of the amount of the incremental production volume or incremental injection. volume, as appropriate.
The regulation establishes the general conditions of access to the advantage both for E&P companies and for their direct suppliers and/or associated third parties. Beneficiaries will be able to calculate the profit from the third quarter of 2022. Nevertheless, as indicated there, different authorities (AFIP, BCRA, Energy Secretariat) will issue additional regulations for its implementation.
- Beneficiaries: The Regulations establish that those who are beneficiaries under the provisions of the Decree (“Beneficiaries“) may also, for the purpose of promoting the investments necessary to increase the production of the hydrocarbon zones they own, present themselves jointly with other legal persons (associated third parties), providing reliable proof of the relationship contract, proving a minimum investment of $50 million.
- How and when to apply for benefits: Beneficiaries may apply for the recognition of benefits from October 2022 (for the third quarter of 2022) and, thereafter, at the end of each quarter, subject to meeting the requirements and within the deadlines set by the Secretariat at energy (“Secretariat“). The recognition of the advantage must be requested within 15 working days following the end of each quarter, in the form of a sworn statement. Once the conditions have been met, the Secretariat issues a statement which will be notified to the Beneficiaries, AFIP and BCRA.When exercising the rights conferred by the Decree, the BCRA and the Secretariat are informed of the destination of the foreign currencies.The benefit does not expire and can be accumulated to access the MLC.
- Transfer of benefits to suppliers: The Regulations set out how to attribute the benefit to the Beneficiaries’ direct suppliers. In this regard, it established (i) that the direct suppliers of the beneficiary are defined as the legal entities that provide special services for the production of hydrocarbons, including fracturing services, drilling equipment and well drilling , and/or others that the Secretariat defines as special services; and that (ii) to transfer the benefits, the beneficiary must request the transfer of the benefits for a determined amount in favor of his direct supplier(s), specifying the services rendered, the terms of the commercial relationship and the method of contractualization with the Secretariat, which will verify compliance with the conditions and inform the BCRA.
- Implications and Waiver: Joining the schemes implies voluntary acceptance of all the requirements set out in both the decree and the regulations, as well as the mechanisms established by the Secretariat to verify the veracity of the information provided, including the mechanisms for the exchange of information with AFIP and BCRA. The interested parties expressly renounce, each time they request the benefits, any administrative and/or legal action against the national State related to the Gas.Ar Plan and Decree 892/20, as well as any claim initiated before the delivery . of this decree.
- Pending Implementation Actions: AFIP, ENARGAS, BCRA and the Secretariat are responsible for providing the means, mechanisms and, where applicable, additional regulations necessary for the proper functioning of the said regimes.
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