Registration of crude oil and gas oil exports

On December 23, 2004 the Secretary of Energy issued Resolution No. 1679/2004 which provides the reestablishment of the Registry of Export Operations for crude oil and gas oil exports provided by Decree No 645/2002 (see “Elimination of Restrictions to Crude Oil Exports” in Marval News # 8 for a description of the provisions of Decree No 645/2002)

Any company or any other market agent that wishes to export crude oil and gas oil must register with, and obtain the prior approval of, the Dirección Nacional de Refinación y Comercialización of the exports to be made.

1.    Crude oil exports

To export crude oil the exporter must demonstrate that the demand of all the refineries authorized to operate in Argentina is duly satisfied or that local refineries have been offered the opportunity to acquire crude oil.

The operators will file an affidavit containing evidence of having notified the local refineries of an offer to sell the crude oil to be exported.

The commercial conditions offered to all local refineries must be basically identical, but may be modified by the parties.The offered conditions must be for a price that is not higher than the price in the local market, and must not discriminate nor block or limit the ability of local refineries to accept the same.The offer must remain open for a minimum period of 4 working days.

Any local refineries who do not have sufficient supply of crude oil may file a claim with the Subsecretaría de Combustibles, who may in turn require any applicable producers to comply with this resolution.

2.    Gas oil exports

To export gas oil the exporter must demonstrate that the demand of all the commercial chain of gas oil in Argentina is duly satisfied or that local refineries have been offered the opportunity to acquire gas oil.Gas oil is demanded in Argentina by agricultural producers and transport companies.

The exporter must demonstrate that all of the commercial chain that depends of the supply of such refinery shall be duly supplied, taking into consideration not only the agreements between the parties but also the estimated demand of such commercial chain during the calendar year.If the estimations made by such refinery were incorrect, the refinery would be required to import at its own cost the volume exported to compensate the difference and avoid altering the commercial chain due to its estimation errors.

The offer of sale of gas oil must be published in at least 3 national written massive means of communication and in the Official Gazette.

The commercial conditions offered must be basically equal to those offered to its company distribution network.The commercial conditions offered must be basically identical, but may be modified by the parties.The offered conditions must be for a price that is not higher than the price in the local market, and must not discriminate nor block or limit the ability of local demand to accept the same.The offers shall remain open for a minimum of 10 working days.

Retailers or wholesalers of the commercial chain duly authorized to operate in Argentina which do not have capacity to satisfy their gas oil supply needs shall have to give notice to the Undersecretary of Energy (Subsecretaría de Combustibles), submitting certified copy of the gas oil sale offer made to refineries and stating and evidencing the reasons of the lack of supply.

Refineries whose market share turns to be higher than their own production capacity shall be held responsible before the Subsecretaría de Combustibles for the continuous supply of their commercial chain at market prices so as to avoid supply problems in the market.If the refinery does not comply, members of the commercial chain may operate with suppliers other than their regular refineries in order to obtain gas oil from other supplier and thus keep the supply of their ordinary customers.

Refineries may not interrupt the supply of their commercial chain as a consequence of technical stoppages or implementation of maintenance programs or changes or improvements to their refinery processes.Refineries must supply their retail and wholesale clients with a volume of no less than their market share.