In brief
Decree 277/2022 (“Decree“) was regulated by means of Decree 484/2022, published in the Official Gazette on 16 August 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 the incremental injection volume, as the case may be.
The Regulation establishes the general conditions for accessing the benefit both for E&P companies and their direct suppliers and/or associated third parties. Beneficiaries will be able to calculate the benefit from the third quarter of 2022. Notwithstanding, as indicated there in different authorities (AFIP, BCRA, Secretariat of Energy) shall issue additional regulations for its implementation.
In focus
- Beneficiaries: The Regulation establishes that those who are beneficiaries by virtue of the provisions of the Decree (“Beneficiaries“) may also, for the purpose of promoting the necessary investments to increase the production of the hydrocarbon areas under their ownership, present themselves jointly with other legal entities (associated third parties), providing reliable proof of the contractual relationship, proving a minimum investment of USD 50 million.
- How and when to apply for benefits: Beneficiaries may apply for recognition of benefits from October 2022 (for the third quarter of 2022) and, afterward, at the end of each quarter, upon compliance with requirements and within the deadlines established by the Secretariat of Energy (“Secretariat“). Recognition of the benefit must be requested within 15 working days after the end of each quarter, in the form of a sworn statement. Once the requirements have been met, the Secretariat shall issue a certificate that will be notified to the Beneficiaries, AFIP and BCRA. At the time of exercising the rights conferred by the Decree, the BCRA and the Secretariat shall be informed of the destination of the foreign currency. The benefit will not expire and can be accumulated to access the MLC.
- Transfer of benefits to suppliers: The Regulation established how to assign the benefit to the direct suppliers of the Beneficiaries. In this regard, it established (i) that direct suppliers of the beneficiary are defined as those legal entities that provide special services for hydrocarbon production, including fracturing services, well drilling and rig equipment, and/or others that the Secretariat defines as special services; and that (ii) to assign the benefits, the beneficiary must request the assignment of the benefit for a specific amount in favor of its direct supplier/s, specifying services rendered, terms of the commercial relationship, and mode of contracting before the Secretariat, which will verify the fulfillment of the conditions and inform the BCRA.
- Implications and waiver: Adherence to the regimes implies voluntary acceptance of all the requirements set forth in both the Decree and the Regulation, and of the mechanisms established by the Secretariat to verify the veracity of the information provided, including information exchange mechanisms with the AFIP and BCRA. The interested parties shall expressly waive, each time they apply for the benefits, any administrative and/or judicial action against the National State related to Plan Gas.Ar and Decree 892/20, as well as desist from any claim initiated prior to the issuance of this Decree.
- Pending implementation actions: The AFIP, ENARGAS, BCRA and the Secretariat are instructed to provide the means, mechanisms and, where appropriate, complementary regulations for the proper functioning of the aforementioned regimes.
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