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Argentine National Off-Shore Areas: The Contract System Returns to the Hydrocarbons' Arena

Santiago López, International Mining and Oil & Gas Law, Development and Investment (2009)

In Argentina, oil agreements between the Host Government and the international oil companies (or national private companies) to explore hydrocarbons reserves tend to follow the country's prevailing political and ideological trends at every historical moment.

In this work, the history of the oil agreements in Argentina shall be briefly developed, so as to specifically analyze the terms and conditions of the agreement implemented by the state-owned company ENARSA (Energía Argentina S.A.) to explore, develop and exploit the hydrocarbons potential of those areas owned by the national government.

2. A Summary on International Oil Agreements.

International oil agreements may fall into two large categories, namely: ((i) Concessions; (ii) Contracts.2 From a legal standpoint, this classification is based on the possibility to transfer or not the legal title (interest) of hydrocarbons to the oil companies.3

The Concession System has two legal traditions. Under the Anglo-Saxon tradition, the concessionary system allows private ownership of the minerals and individuals may own mineral rights. In some countries the government has the ownership over the mineral, but under the concessionary systems it will transfer the legal title of the minerals to a private company if they are produced. In return, the company is subject to payment of royalties and taxes.4