July 27 (Bloomberg) -- Argentina’s government mandated the creation of an oil planning commission that will set national energy goals and have the power to review private companies’ investment plans.
Oil producers will be cataloged in a national registry overseen by the new commission, according to a decree published today in Argentina’s official bulletin. Companies will have to submit annual investment plans by Sept. 30 and the commission will be able to reject proposals it deems aren’t consistent with the national energy goals that the body sets.
The decree strengthens Argentina’s control over the oil industry after the April nationalization of YPF SA, Argentina’s largest energy company, on the grounds that it failed to invest enough to increase output. Argentina seized a 51 percent stake from Spain’s Repsol SA after opposing the company’s payment of dividends.
The new commission will be made up of officials from the planning, energy and internal commerce ministries, the official bulletin shows. It will seek to “increase and maximize investments employed to explore, exploit, refine, transport and sell hydrocarbons with the goal of guaranteeing self-sufficiency and sustainability,” according to the document released by the Argentine government.
The body will have 60 days to review the annual investment plans submitted by energy companies and “verify their consistency and adaptation” with the goals it establishes. It can “request the submission of a new annual investment plan that adjusts to the requirements of the national plan for hydrocarbon investments,” the document shows.
The government is authorized to fine companies that don’t comply with national regulations and cancel their concessions, according to the document.
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