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22/04/2019
PAGBAM Energy Newsletter
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First unconventional exploitation concession in the province of Mendoza
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Province of Mendoza granted to our client Petrolera El Trébol S.A. (“PETSA”) a non-conventional exploitation concession over Area CNQ 17 “Puesto Rojas,” to carry out exploitation and development of non-conventional hydrocarbons and develop ancillary activities for a 35- year period.
The operations include a Pilot Plan, which must be fulfilled by the concessionaire by June 30th, 2020, renewable for 2 years at the concessionaire’s discretion.
The Pilot Plan includes the drilling of eleven vertical
wells into the Vaca Muerta formation, 120km2 of high resolution 3D seismic and the drilling of the first horizontal well, with multiple stages of hydraulic fracturing.
Within 90 days after the successful conclusion of the Pilot Plan, the concessionaire must file a detailed Development Plan with the Enforcement Authority for analysis, approval and follow-up. The Development Plan must be executed within 10 years. Thereafter, the concessionaire must file successive five-year plans.
On account of the high complexity of this operation, the Decree includes a royalty discount from 12% to 9% for unconventional production sold at a wellhead price below four dollars per MMbtu (4,00 USD/MMbtu), in the case of natural gas, and below sixty dollars per barrel (USD 60/bbl) in the case of crude oil. The discount applies for 10 years following the date of approval of the Development Plan by the Enforcement Authority.
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Renewable energy - Tax cuts - Province of Neuquén adheres to national law
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On March 26th, 2019, by means of Decree No. 355/2019 the Executive Power of the Province of Neuquén approved the implementation regime for the use of renewable energy sources for the production of electricity set forth in Provincial Law No. 3,108.
The Decree grants tax benefits to individuals or legal entities that hold renewable energy generation projects in the Province within the framework of National Laws No. 26,190 and 27,191.
Benefits include:
- Real Estate Tax exemption for 20 years, for real estate affected to the installation of plants for electric power generation from renewable sources.
- Stamp tax exemption for 20 years, over acts, contracts or operations related to the development of projects, construction, acquisition of technology, civil works, electromechanical or electrical works, power generation, supply and operation and maintenance contracts, and, in general, everything related with the activity of power generation from renewable sources.
- Gross Turnover Tax exemption, for the power generation activity from renewable sources for the first 5 years. Thereafter, the tax stability provisions of the Fiscal Consensus, approved by National Law No. 27,429 and ratified by Neuquen Law No. 3,090 and shall apply.
Benefits shall become effective upon approval of the relevant project by the Enforcement Authority. For the benefits to apply, beneficiaries must provide evidence of tax compliance.
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Price discount for the network distribution of natural gas and undiluted propane
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On March 29th, 2019, the Secretary of Energy issued Resolution 148/2019, establishing a discount for natural gas and undiluted propane consumption at the Transportation System Entry Point of 27% for April 2019 and of 12% for May 2019. The Resolution is based on Decree 2255/1992, which establishes seasonal tariff adjustments for the network distribution of those products.
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Public hearing No. 98: Rules for natural gas marketing
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By means of Resolution 202/2019, published on
April 3rd, 2019 on the Official Gazette, the Natural Gas Regulator, ENARGAS, approved Public Hearing No. 98, which discussed the following topics: (i) Tariffs Biannual Adjustment Mechanism for the natural gas transportation and distribution licensees; (ii) the natural gas producers’ price pass-through to tariffs according to the Basic Rules of the Distribution Licenses; (iii) the creation of an Entry Point to the Transportation System in Escobar and; (iv) the applicable tariffs for LPG networks. (For more information, please refer to our February 2019 Energy Newsletter.)
The Resolution also approved the tariffs for each Natural Gas Distributor. The rates will be effective
from the date of the publication, May 1st, 2019
and June 1st, 2019, in accordance to Annexes
IF-2019-19921824-APN-GDYE#ENARGAS,
IF-2019-19921833-APN-GDYE#ENARGAS and
IF-2019-19921841-APN-GDYE#ENARGAS, respectively. |
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Environmental case law in Cordoba: More control over judicial activism
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On February 22nd, 2019, in the case styled “Cruz, Silvia Marcela et al v Ministry of Energy and Mining on environmental injunction,” the Federal Appeals Court of the Province of Córdoba, partially revoked the interim resolution of the lower court to consult experts on the feasibility of an investigation to determine the existence of pollution and diseases from the PORTA HNOS bioethanol plant.
The claim seeks a cease and desist order to stop air pollution and preemptively close the Plant. The lower court sent a notice to the Centre of Environmental Investigations of the Chemistry Department at the Exact Sciences Faculty of the University of La Plata to consult about the feasibility of conducting a study of environmental contamination. The court sent also a notice to the Dean of Medical Sciences of the same university to enquire about the possibility of conducting medical tests over 100 individuals to verify the existence of respiratory or dermic pathologies. The defendant appealed.
The Appeals Court pointed out that the evidence solicited by the lower court exceeds the object of the claim and therefore violates the congruence principle, signifying a denial of the right to a fair trial which is embodied in the Argentine Constitution.
This case represents a departure of the general trend in environmental cases, where we have seen an inordinate amount of activism on the part of the courts and a very loose application of the congruence principle.
Expte. No 21076/2016 – “Cruz, Silvia Marcela y otros c/ Ministerio de Energía y Minería de la Nación s/ amparo ambiental” – CÁMARA FEDERAL DE CÓRDOBA - SALA A – 22/02/2019 |
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