Today, the Energy Secretariat issued Resolution 522/2019 ("Resolution") establishing the following measure to lessen negative effects caused to oil and biofuels producing companies by Decrees No. 566/2019 and 601/2019 that froze crude oil and fuel prices ("Decrees"):
a. Transfer of AR$ 116,10 (approximately USD 2 at current exchange rate) to oil producing companies for each bbl delivered to the local market during September 2019;
b. 88% of said amount will be for oil producing companies, while the remaining 12% will be transferred to the provinces that granted the exploitation concession (in line with the general royalties' percentage); and
c. transfer of the equivalent of 6% of the price set forth by the Energy Secretariat during August 2019 to the biofuel producing companies as beneficiaries of the promotional regime set forth by laws No. 26,093 and 26,334 ("Promotional Regime").
To receive the transfer described in a), oil producing companies and the provinces, shall file a request with a waiver to any claims related to the application of the Decrees. Additionally, oil producing companies shall hold the National State harmless from any claims in this regard by companies of the same group.
To receive the transfer in c), biofuel producing companies shall make the same waiver, and assume the same indemnity obligation with regards to the regulations that establish the biofuel pricing methodology and those that determined their respective prices under the Promotional Regime.
The measure is one time only and applies to the terms indicated therein, while the effects of the Decrees will extend, in principle, until November 13, 2019.