Overview and role of the EITI
Argentina’s economy is not highly dependent on the extractive sector, which contributed 3.8% to total governments revenues, 4.5% to exports and 4.6% to national GDP in 2018. Nonetheless, the country hosts the second largest shale gas deposits and the fourth largest unconventional oil resources in the world, mainly in the Vaca Muerta formation in southern Argentina. The development of these resources requires large and continued investments in the coming decade, as well as the enhancement of a governance framework for the extractive sector.
Argentina’s national oil company, YPF, leads exploration, development and production activities for crude oil, natural gas and liquefied petroleum gas. The company is a leader in exploratory and production projects of non-conventional oil and gas in Latin America.
Argentina hosts important reserves of critical minerals, such as lithium, but its mining sector is still at an early stage of development. Social and political conflict around metallic large-scale mining and its environmental effects has resulted in several provinces banning certain mining techniques, such as open-pit mining.
Argentina is using the EITI platform to strengthen accountability and transparency across the value chain of the upstream extractive sector, strengthen systematic disclosure of information and shed light on revenue allocations at the subnational level.
Economic contribution of the extractive industries
- TO GOVERNMENT REVENUE
- TO EXPORTS
- TO GDP
- % to employment
Contracts: What’s the deal in Latin America and the Caribbean?
EITI Board approves Argentina’s application to join the Extractive Industries Transparency Initiative
Why the push back? Tackling beneficial ownership transparency in Latin America and the Caribbean
Argentina makes public its commitment to adhere to the EITI
Argentina’s 2018 EITI Report included a series of recommendations to improve EITI implementation in the country. Since the publication of the report, several actions have been put in place. The EITI Argentina website includes updated data on production (disaggregated by company and project), exports and economic contribution of the sector.
- With the leadership of civil society and government, and with support from the British embassy in Buenos Aires, several provinces have been invited to join the EITI. There is an ongoing effort to incorporate them to the EITI reporting process.
Argentina’s oil and gas sector is governed by the Hydrocarbons Law and managed by the Energy Secretariat (Secretaría de Energía) under the Ministry of Economy, including exploration, exploitation, industrialisation, transportation and commercialisation activities. Argentina has a federal regime, and the National Constitution stipulates that "the provinces have the original ownership of the resources". This provision is regulated in the "Short Law", which provides provinces with the jurisdiction of hydrocarbon fields.
Oil and gas licenses are granted by the national Energy Secretariat in accordance with the Hydrocarbons Law and by provincial governments. The national government issues licenses for fields located more than 12 nautical miles offshore, while provincial governments issue licenses for fields within their territories. Both levels of government are responsible for the ratification and fiscalisation of hydrocarbon contracts.
Mining licenses are granted by provincial governments through concessions. Concessions are issued on perpetuity on the condition that annual payments are made.
Some oil and gas contracts are published via the Energy Secretariat but tend to have commercially sensitive clauses omitted. Several contracts are also published via resourcecontracts.org. Disclosure of mining contracts is not comprehensive, and provincial governments are wary of disclosing their fiscal terms.
Companies based in Buenos Aires are registered via the Public Registry of Commerce of the City of Buenos Aires ("IGJ"). This public registry requires all companies to their beneficial owners. In April 2020, the Federal Administration of Public Revenues ("AFIP") approved a new resolution requiring the registration of the beneficial owners of a wide range of legal entities, including commercial partnerships, associations and investment funds.
The new AFIP regulations represent an improvement in achieving beneficial ownership transparency. However, the confidential nature of the information submitted by companies represents a major obstacle to meeting the disclosure requirements of the EITI Standard.
In 2021, Argentina joined Opening Extractives, a global programme aiming to improve the quality, availability accessibility and use of beneficial ownership data. Argentina’s participation in the programme is supported by the Ministry of Productive Development and is expected to strengthen beneficial ownership disclosures in the country’s extractive sector.
Argentina’s 2018 EITI Report concluded that the EITI’s disclosure requirements on subnational transfers is not applicable as there is no data available, but that it will apply once the EITI is implemented at the provincial level. Argentina’s multi-stakeholder group is taking steps to engage provincial authorities in the EITI process, however these efforts have been hampered by the COVID-19 pandemic.
Argentina-EITI is administered by the Argentina Multi-Stakeholder Group (MSG) which is comprised of 13 members. The MSG is co-chaired by the Secretaría de Energía, representing the Ministry of Economy, and by the Secretaría de Minería, representing the Ministry of Productive Development. The national secretariat, also known as the Secretaría Técnica Nacional (STN), coordinates technical operations.
Argentina’s Validation against the 2019 EITI Standard is expected to commence in January 2022.