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Oil Regulation 2020 Oil Regulation Oil Regulation 2020 Contributing editor Bob Palmer © Law Business Research 2020 Publisher Tom Barnes [email protected] Subscriptions Claire Bagnall Oil Regulation [email protected] Senior business development manager Adam Sargent 2020 [email protected] Published by Law Business Research Ltd Contributing editor Meridian House, 34-35 Farringdon Street London, EC4A 4HL, UK Bob Palmer The information provided in this publication Mayer Brown is general and may not apply in a specific situation. Legal advice should always be sought before taking any legal action based on the information provided. This information is not intended to create, nor does receipt of it constitute, a lawyer– Lexology Getting The Deal Through is delighted to publish the seventeenth edition of Oil client relationship. The publishers and Regulation, which is available in print and online at www.lexology.com/gtdt. authors accept no responsibility for any Lexology Getting The Deal Through provides international expert analysis in key areas of acts or omissions contained herein. The law, practice and regulation for corporate counsel, cross-border legal practitioners, and company information provided was verified between directors and officers. May and June 2020. Be advised that this is Throughout this edition, and following the unique Lexology Getting The Deal Through format, a developing area. the same key questions are answered by leading practitioners in each of the jurisdictions featured. Our coverage this year includes a new chapter on Oman. © Law Business Research Ltd 2020 Lexology Getting The Deal Through titles are published annually in print. Please ensure you No photocopying without a CLA licence. are referring to the latest edition or to the online version at www.lexology.com/gtdt. First published 2003 Every effort has been made to cover all matters of concern to readers. However, specific Seventeenth edition legal advice should always be sought from experienced local advisers. ISBN 978-1-83862-375-3 Lexology Getting The Deal Through gratefully acknowledges the efforts of all the contribu- tors to this volume, who were chosen for their recognised expertise. We also extend special Printed and distributed by thanks to the contributing editor, Bob Palmer of Mayer Brown, for his continued assistance with Encompass Print Solutions this volume. Tel: 0844 2480 112 London June 2020 Reproduced with permission from Law Business Research Ltd This article was first published in July 2020 For further information please contact [email protected] www.lexology.com/gtdt 1 © Law Business Research 2020 Contents Argentina 3 Mexico 93 Hugo C Martelli and Bernardo Bertelloni Diego Campa, Jorge Jimenez and Rogelio López-Velarde Martelli Abogados Dentons López Velarde SC Brazil 11 Myanmar 105 Felipe Rodrigues Caldas Feres and Giovani Loss Khin Cho Kyi, Kana Manabe, Nirmalan Amirthanesan and Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados Albert T Chandler Myanmar Legal MHM Limited Denmark 25 Johan Weihe, Per Hemmer and Rania Kassis Norway 114 Bech-Bruun Yngve Bustnesli Kvale Advokatfirma Faroe Islands 35 Johan Weihe, Per Hemmer and Rania Kassis Oman 125 Bech-Bruun Mansoor Jamal Malik, Asad Qayyum and Hussein Azmy Al Busaidy, Mansoor Jamal & Co Ghana 44 Akua Pinamang Addae, Kafui Quashigah, Kimathi Kuenyehia, Sr, Peru 134 Sarpong Odame and Sefakor Kuenyehia Augusto Astorga Philippon and Carlos D Hamann Kimathi & Partners Corporate Attorneys CMS Peru Greenland 56 Senegal 143 Johan Weihe, Per Hemmer and Rania Kassis Aboubacar Fall Bech-Bruun AF Legal Law Firm India 67 Thailand 152 Suniti Kaur, Shauray Bal and Kunal Lohani Nuanporn Wechsuwanarux, E T Hunt Talmage, III, David Beckstead, Alaya Legal Hiroki Kishi, Tachatorn Vedchapun and Noraseth Ohpanayikool Chandler MHM Limited Italy 75 Pietro Cavasola and Matteo Ciminelli United Kingdom 161 CMS Legal Bob Palmer and Tom Mallalieu Mayer Brown Japan 86 Kentaro Kubo United States 174 TMI Associates Robert A James and Stella Pulman Pillsbury 2 Oil Regulation 2020 © Law Business Research 2020 Argentina Hugo C Martelli and Bernardo Bertelloni Martelli Abogados GENERAL reservoirs was transferred from the federal government to provincial governments. Key commercial aspects 1 Describe, in general terms, the key commercial aspects of the Registering a licence oil sector in your country. 4 Is there an official, publicly available register for licences and licensees? Is there a register setting out oilfield ownership or As of 31 December 2018, Argentina has proven oil reserves of operatorship, etc? 379.796Mm3 and probable oil reserves of 163.257Mm3 (calculated at the end of the fields’ useful lives). The key industry players are YPF, Each province has its own registry of licences and licensees, and this Pan American, Chevron, Tecpetrol, Wintershall, Sinopec, Total, Shell, information is accessible by the public. Registries are maintained by the Sipetrol, Pluspetrol and Capsa. relevant enforcement authority of each province. In the case of offshore As of 2010, the key players started developing unconventional areas, subject to federal jurisdiction, this control is carried out by the operations in the Province of Neuquén (where the Vaca Muerta and Los Federal Secretary of Energy. No fees are due to obtain this informa- Molles formations are located), forcing changes to the existing legal and tion. The registers are physical, and information is obtained by written regulatory framework (extending the exploration and evaluation terms, request. Information regarding operatorship of each block is publicly increasing their acreage through the acquisition of adjacent areas, or by available on the Federal Secretary of Energy’s website. unifying two or more blocks into multi-block evaluation or pilot project commitments, among others). Legal system 5 Describe the general legal system in your country. Energy mix 2 What percentage of your country’s energy needs is covered, The general legal system in the country is civil law and the rule of law directly or indirectly, by oil or gas as opposed to nuclear or is generally upheld. non-conventional sources? What percentage of the petroleum product needs of your country is supplied with domestic REGULATION OVERVIEW production? Legal framework for oil regulation As of 31 December 2018, the country’s energy needs are covered 6 Describe the key laws and regulations that make up the as follows: principal legal framework regulating oil and gas activities. • hydrocarbons – 86.5 per cent (oil, 31.2 per cent; natural gas, 54 per cent; mineral coal, 1.3 per cent); The National Hydrocarbons Law, No. 17,319, amended by Law Nos. • hydroenergy – 4.3 per cent; 26,197 and 27,007, is the main body of legislation for oil and gas explo- • vegetable oils – 4 per cent; ration and production. Despite being of questionable constitutional • nuclear fuel – 2.1 per cent; and grounds, the provinces have passed their own laws and regulations on • other sources – 3.1 per cent. these activities. The transportation, distribution and marketing of gas are independently regulated by Law No. 24,076. About 85 per cent of the of Argentina’s petroleum product needs are supplied by domestic production. Expropriation of licensee interest 7 Are there any legislative provisions that allow for Government policy expropriation of a licensee’s interest and, if so, under what 3 Does your country have an overarching policy regarding conditions? oil-related activities or a general energy policy? Expropriations in Argentina are regulated by the Federal Law on Pursuant to article 3 of Hydrocarbons Law No. 17,319; article 2 of Law No. Expropriations, No. 21,499, and there are no specific provisions for 26,197 (the Short Law); and article 2 of Law No. 26,741 (the Hydrocarbons oil and gas licences. This law was applied when implementing the Sovereignty Law), the federal executive branch establishes the federal expropriation of the majority shareholding by Repsol in YPF in March policy applicable to the exploration, exploitation, refining, transportation 2012, which was finally settled in May 2014 by means of an agreement and marketing liquid hydrocarbons for domestic supply. executed between the federal government and Repsol that was subse- Following the enactment of the Short Law in January 2007, the quently ratified by Law No. 26,932 passed by the Federal Congress. licensing of exploration and exploitation activities in hydrocarbon www.lexology.com/gtdt 3 © Law Business Research 2020 Argentina Martelli Abogados Revocation or amendment of licences the relevant provincial governments until its expiration. International or 8 May the government revoke or amend a licensee’s interest? interprovincial transportation concessions will continue to be subject to federal jurisdiction. Reservoirs located in Argentine territorial waters Exploration permits and exploitation concessions provide a vested right between 12 and 200 nautical miles off the coast exclusively belong to that cannot be terminated without legal indemnification. Nonetheless, the the federal government. Petroleum rights are independent from surface relevant provincial enforcement authority or the federal government, for rights. Oil production belongs to the licensee (the titleholder of an explo- federal offshore blocks, are entitled to revoke these licences in the event of ration permit or exploitation concession) upon its extraction. breach of the permit or concession conditions by the titleholder