Country
Assessment
Article 73 of the Petroleum Law, 2004 , states that when gas flaring is authorized, the supervising authority may determine that a relevant fee be charged in accordance with the quantity and quality of the gas flared and its location. No evidence could be found in the sources consulted on enforcement of such a fee. In the case of marginal or small deposits, the MMRPG may authorize the flaring of associated gas to make its exploitation viable. Flaring authorizations may be granted only upon submission of an EIA.
Article 73 of the Petroleum Law, 2004 , expressly forbids natural gas flaring except for short periods for testing or other operating reasons, which require special permission from the MMRPG.
The MMRPG, created in 1978, oversees petroleum activities. It focuses mainly on coordination and cooperation with other entities. Its statute is provided under Presidential Decree 12/2018 as amended by Presidential Decree 159/2020. Other ministries, such as the Ministry of Environment and the Ministry of Finance, also have some degree of oversight and regulatory powers. Law 5/2019 created a new regulator, the National Oil, Gas and Biofuel Agency (Agência Nacional de Petróleo, Gás e Biocombustíveis). Presidential Decree 49/2019 provides the organic statute of this regulator, which took over from Sonangol as the exclusive holder of mineral rights for oil and gas exploration and production. Law 5/2019 granted Sonangol preferential acquisition and operational rights in oil and gas concessions and operations.
No evidence regarding targets and limits could be found in the sources consulted. However, there is a de facto zero-flare policy for all new fields.
The Angola Liquefied Natural Gas Project (ALNG) is the first LNG project in Angola. It uses associated natural gas, helping to reduce gas flaring and associated greenhouse gas emissions. Daily capacity is 1.1 billion cubic feet (bcf). Decree 10/2007 created a special legal regime for the ALNG that includes specific maritime, tax, customs, and foreign exchange regimes. The ALNG is subject to a specific tax regime under which sponsor entities hold a tax credit of 144 months starting from the date of initial commercial production, deductible against the profit income tax. The ALNG is subject to a quarterly gas tax from the first LNG export shipment date. Decree 7/2018 provides more attractive tax rates to gas operations. The gas production tax is 5 percent (compared with 10 percent for oil). PSCs state that any surplus gas produced by oil companies that is not used for field use must be given free of charge to Sonangol (see section 5 of this chapter). The capital expenditures borne by companies for the storage and delivery of associated gas to Sonangol are cost recoverable. Sonangol will manage the gas infrastructure once commissioned and will also bear the cost of operating it. Should funding the gas infrastructure have a significant negative impact on the economic conditions agreed to in the PSCs for the contractor, Sonangol is required to modify the economic terms of the contract to restore the contractor’s economic position before the gas infrastructure project.
No evidence regarding the use of market-based principles to reduce flaring, venting, or associated emissions could be found in the sources consulted.
The volume of gas flared in Argentina doubled from 0.6 billion cubic meters (bcm) in 2012 to 1.2 bcm in 2022 (Figure 1). During this period, oil production varied by about 10 percent with a significant uptick to 583,000 barrels a day in 2022. After broadly stabilizing in the first half of the 2010s, the flaring intensity increased steadily after 2017, reaching the highest level in 2021 and dropping again slightly in 2022. There were 156 individual flare sites in the most recent flare count, conducted in 2022. Figure 1. Gas flaring volume and intensity in Argentina, 2012–22 Argentina participates in the Global Methane Initiative (n.d.) and the Climate and Clean Air Coalition. It submitted its first NDC in 2016 and its second in 2020. In its second NDC, Argentina committed not to exceed net emissions of 359 million tCO2e by 2030. This new goal is 26 percent lower than the target in the 2016 NDC. It represents an emissions reduction of 19 percent by 2030 from the 2007 peak emissions level. Argentina participates in the Global Methane Initiative, the Global Methane Pledge, and the Climate and Clean Air Coalition. It submitted its first NDC in 2016 and its second in 2020. In its second NDC, Argentina committed not to exceed net emissions of 359 million tCO2e by 2030. At the end of 2021, Argentina updated its second NDC target to 349 million tCO2e by 2030. This new goal is 27.7 percent lower than the target in the 2016 NDC. It represents an emissions reduction of 21 percent by 2030 from the 2007 peak emissions level. The NDC does not specifically mention gas flaring or venting. Most of Argentina’s oil and gas production is in Patagonia. The province of Chubut produces most of the oil. About half of the country’s natural gas comes from the Neuquén Basin, which is home to unconventional reserves, including the Vaca Muerta formation, which stretches across four provinces: Neuquén, La Pampa, Mendoza, and Rio Negro. Yacimientos Petrolíferos Fiscales (YPF) is the country’s largest producer of oil and gas. In the 1990s, 80 percent of YPF was privatized. YPF relinquished some upstream areas and entered into joint ventures with private operators for its most productive blocks. The state subsequently sold its remaining 20 percent stake to the Spanish oil company Repsol. However, the government retained veto power over crucial decisions. In the gas sector, another state-owned company, Gas del Estado, was also privatized and unbundled into two gas transport and eight gas distribution companies. In 2012, through Law 26.741, 2012, the government expropriated a 51 percent controlling stake in YPF. Subsequently, the government promoted public-private partnerships with the renationalized YPF, with the primary goal of addressing Argentina’s energy shortages. YPF committed itself to reducing its carbon dioxide emissions intensity by 10 percent by 2023. It will achieve this reduction through more efficient energy management, reductions in flared and vented gas, electrification and digitization of its operations, and adoption of low-carbon energy sources.
Natural gas provides more than 60 percent of power generation and more than half of the total energy consumed. Law No. 24.076, 1992, known as the Natural Gas Law, established the basis for deregulation of natural gas transport and distribution industries. The Federal Gas Regulatory Authority, created in 1992 by Decree No. 2255/92, oversees the transportation and distribution of natural gas. Natural gas prices are a mix of regulated and market prices. Before the 2015 energy reform, domestic oil and gas prices were significantly lower than those at trade parity, and public services tariffs did not cover operational costs. The domestic supply of oil and gas was insufficient to meet demand. After 2015, domestic oil and gas prices started to align with international levels. Resolution No. 46-E/2017, as amended by Resolutions No. 419/2017 and 12/2018, introduced producer subsidies to attract investments in unconventional natural gas reservoirs in the Neuquén Basin. A minimum price of US$7.50 per million British thermal units (mmBtu) was guaranteed during 2018, decreasing by US$0.50/mmBtu a year to US$6/mmBtu by 2021. On December 31, 2021, the program was to end, at which point prices were expected to match import-parity values. Law No. 26.197, 2006 , vests the federal government with the authority to grant concessions for interprovincial and export transport. Transport concessions located within the territory of only one province and not connected to export facilities were transferred to the provinces. Operators of pipelines and other transport and distribution infrastructure are required to provide open access to third parties if they have available capacity. Third parties have the right to access this transport infrastructure if they comply with the relevant procedures. The growth of natural gas production will require substantial new investment in infrastructure and export routes in the near and medium term as well as cost-effective production and transport systems. The federal government launched a public tender for constructing and operating a new gas pipeline from the Vaca Muerta area in Neuquén to Saliqueló, south of Buenos Aires. Construction is underway.
Section 9 of Resolution No. 143/1998 on inspections and sanctions, cites noncompliance with it as a sufficient reason for revoking the corresponding authorizations, except where the Energy Secretariat deems the noncompliance justified. Section 9 sets out the appeal process. Any transgression of the resolution will make the concessionaire or permit holder liable to the sanctions imposed in Law No. 17.319, 1967, under the law’s Titles VI and VII. The Energy Secretariat may request the revocation of the concession or exploration permit granted in the event of the assumptions outlined in Article 80 of the law.
Section 6 of Annex 1, on norms and procedures for venting gas, of Resolution No. 143/1998 covers flow rate measurement and registering. It requires the establishment and implementation at each venting point of a system to measure and record the flow of flared or vented gas and its composition in all cases. Article 14 of the Neuquén province’s Decree No. 29/2001 includes similar requirements.