This document discusses cooperation between competition authorities and sector regulators in the oil and gas markets in Latin America. It provides examples of cooperation models from Chile, Mexico, Brazil, and Argentina. Cooperation can include information sharing, capacity building activities, and competition advocacy. Formal cooperation agreements provide benefits like strengthened relationships, more fluid information exchange, and support for competition analyses and legal reforms in the sector.

1. Oil & Gas: Cooperation with Regulators
1
Pablo Trevisán
LACCF – OECD
Rio de Janeiro, 28 September, 2022

3. GENERAL
To fulfil their mandates effectively, it is important that
competition authorities create ties with the sectorial
authorities, in order to take advantage of their specialization in
the markets, as well as the use of useful and truthful
information (e.g. data related to market players such as
corporate structure, turnovers and pricing practices).
In the case of the oil and gas markets, the sectorial authorities
are in charge of supervising the sector, so they have technical
and specialized knowledge on the functioning of these markets.

4. GENERAL
In several cases in the region, competition authorities go a step
further and sign cooperation agreements with regulators, establishing,
among other things, an information exchange mechanism.
Basically, we found three models of cooperation within the region:
1. Derived from a legal mandate (e.g., Chile);
2. Those in which it is limited to cooperation agreements (e.g.,
Mexico); and
3. Those that are applied on a case-by-case basis (e.g., Argentina),
within the framework of the proceedings or investigations of the
competition authority, but with no formal cooperation
agreements.

5. GENERAL
Cooperation between competition authorities and energy regulators can
largely benefit competition analysis in the oil and gas sector.
In addition to the sectorial expertise, energy regulators have data from
the sector, which can be key for merger review, investigations and
market studies
Similarly, competition authorities can also support energy regulator’s
mandate, for instance through joint capacity building activities and
competition advocacy initiatives.
For this purpose, institutional design and application of instruments of
cooperation may facilitate such cooperation and promote consistency
(OECD, 2019).

6. GENERAL
In the end, these cooperation agreements strengthen ties, make more
fluid contacts and train the counterparty (especially so that they report
possible irregularities to the competition authority).
They are not only useful for merger control and possible infringements,
but also -and perhaps especially- in the context of market investigations.
They are, in short, agreements that constitute ways of specifying a
greater relationship, a better interaction between public bodies that do
not have concurrent powers, but do have common interests and
objectives in certain matters.

7. CHILE
In Chile, the obligation of coordination between public bodies is in
the Ley de Bases Generales de la Administración del Estado (Law of
General Bases of the State Administration). Therefore, it has a
legal source.
The Fiscalía Nacional Económica (FNE) entered into an agreement
with the Comisión Nacional de Energía (CNE) on 7 February 2014,
which includes the exchange of public information, mutual
capacity building activities, and competition advocacy.

8. CHILE
The exchange of information covers the use of CNE’s Online
Information Price System, which enables the FNE to access the CNE’s
database that provides an online access to the general public of the
real-time retail fuel prices proposed in all gas stations of the country.
It does not allow the exchange of confidential information (at least
not from the FNE to the CNE), but merely public information.

9. CHILE
In December 2020 the FNE carried out the study of the gas market
(natural gas and liquefied gas) and in this the technical collaboration of
the CNE, to properly understand the market and its dynamics, was
relevant.
In the end, if the competition authority doe not have the support of the
sector regulator, it might be difficult to pass legal reforms (which, in FNE’s
case, is in Congress and has the support of the CNE).
There are other agreements with the SEC (Superintendency of Electricity
and Fuels), the Agencia de Compras Públicas, the National Electrical
Coordinator and the Empresa Nacional del Petróleo (ENAP, a state-owned
company in Chile).

10. MEXICO
An agreement between COFECE and the Comisión Reguladora de
Energía (CRE) was released in 2018. The main objective was to establish
a framework for coordination of the activities of both institutions in
common areas including the exchange of information in order to
improve the quality of their assessments and overall performance.
Agreement between COFECE and Comisión Nacional de Mejora
Regulatoria (CONAMER), implied that any important regulation of any
dependency be previously reviewed in terms of its impact on
competition by COFECE.

11. BRAZIL
A co-operation agreement exist between CADE and the Agência
Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP), which
contains the possibility of the exchange of confidential
information when requested by the head of these institutions

12. ARGENTINA
In the past, some regulators had powers in competition law matters,
granted by their respective regulatory frameworks.
Currently, the competition authority is the only body authorized to
resolve antitrust issues, since any attribution related to the object of
the competition law, was repealed to other state agencies or
entities.
There are no cooperation agreements in place as of to date with any
of the sectorial regulators, including those of the oil and gas market.

13. ARGENTINA
Interaction with ENARGAS and the Secretary of Energy, on merger
control proceedings, conduct cases, as well as on market studies or
investigations.
In 2018, the CNDC carried out the study of the liquid fuel market and
the technical collaboration of the ENARGAS and the Secretary of
Energy, to properly understand the market and its dynamics, were very
relevant.

15. On September 15, the President of the Nation, together with the Minister of
Economy and the Secretary of Energy, presented the Gas Plan 4 and 5.
This might be a good opportunity to explore the possibility of a more active and
closer cooperation between the Argentine competition authority, the Secretary of
Energy and those in charge of finishing the layout of the specifications for the next
tenders of this plan.

16. Thanks!
Pablo Trevisán
ptrevisan@estudiotrevisan.com