Argentina approves bill to create state energy firm Enarsa

Oct 07, 2004 02:00 AM

Argentina's lower house approved a bill that would create state energy company Enarsa, and sent the bill back to the senate with various changes to increase state control.
Argentina's governing PJ (Partido Justicialista) party had delayed the vote for a week because of a lack of intra-party consensus. Despite senate approval of the company's creation in August, PJ legislators could not agree over whether the bill should be modified to make Enarsa a state-owned company, which would give the government more control over its operations, or whether it should be a limited company, as proposed by the government.

In the end, the house agreed to approve the bill but opted to make Enarsa a state-owned company to ensure that the state always maintains its majority stake. The house changed Article 2, which deals with the award of exploration and production licenses, to specify that the contract processes "should observe mechanisms of transparency and competition that respect the hydrocarbons law."
This means that the attorney general and the national trustee office SIGEN will supervise all contract processes, which was not considered in the original bill. The government's proposal would give the federal government 53 % of Enarsa and provincial governments 12 %, with the remaining 35 % listed on the stock market.

Enarsa will allow the government to regulate the energy market and it will own all the exploration permits and production concessions for offshore areas not currently under license.
Now the bill returns to the senate which must decide whether to accept the changes from the lower house or insist on its original version.

Source: BNamericas
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