Malvinas: The Precedent for a Law Punishing Unauthorized Oil Exploration by Companies

Javier Milei’s announcement about natural-resource exploitation in the Malvinas Islands has brought renewed attention to a law passed 15 years ago to punish unauthorized hydrocarbon activity in areas Argentina regards as part of its continental shelf.

Law 26.659, also known as the Pino Solanas Law, was enacted on March 16, 2011, during Cristina Fernández de Kirchner’s first presidency. It requires Argentine and foreign companies seeking to explore for or exploit hydrocarbons on the Argentine Continental Shelf to obtain authorization from Argentine authorities.

The law emerged amid tensions over hydrocarbon exploration around the Malvinas, which are administered by Britain. Although it does not expressly name the islands, it created a mechanism to sanction companies involved in operations that Argentina considers to have taken place within its continental shelf without authorization.

Its second article sets out the main restrictions. Individuals and companies, whether Argentine or foreign, may not conduct hydrocarbon activities in the Argentine Continental Shelf without approval from a competent Argentine authority. The prohibition also covers people or companies with direct or indirect interests in unauthorized operators, as well as firms that contract for or provide commercial, financial, logistical, technical, consulting or advisory services connected to those operations.

Violators can be barred from operating for between five and 20 years. Hydrocarbon concessions they hold may be transferred back to the national government or the provinces, depending on the case. The disqualification must also be recorded, and tax or social-security exemptions and other benefits may be withdrawn.