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Pampa Energia (PAM)

Cover

Cover12 Months Ended
Dec. 31, 2020shares
Cover [Abstract]
Entity Registrant NamePampa Energy Inc.
Entity Central Index Key0001469395
Document Type20-F
Document Period End DateDec. 31,
2020
Amendment Flagfalse
Current Fiscal Year End Date--12-31
Entity Incorporation State Country CodeC1
Document Annual Reporttrue
Document Transition Reportfalse
Is Entity a Well-known Seasoned IssuerYes
Is Entity a Voluntary FilerNo
Is Entity Reporting Status CurrentYes
Entity Interactive Data CurrentYes
Entity Filer CategoryLarge Accelerated Filer
Document Shell Company Reportfalse
Entity Emerging Growth Companyfalse
Entity Shell Companyfalse
Auditor Attestation Flagtrue
Entity Common Stock, Shares Outstanding1,451,170,791
Document Fiscal Period FocusFY
Document Fiscal Year Focus2020

CONSOLIDATED STATEMENT OF COMPR

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions12 Months Ended
Dec. 31, 2020Dec. 31, 2019Dec. 31, 2018
Statement of comprehensive income [abstract]
Revenue $ 1,071 $ 1,338 $ 1,436
Cost of sales(663)(811)(831)
Gross profit408 527 605
Selling expenses(38)(26)(37)
Administrative expenses(93)(105)(130)
Exploration expenses (9)(1)
Other operating income56 79 223
Other operating expenses(36)(43)(156)
Impairment of property, plant and equipment, intangible assets and inventories(139)(62)(32)
Share of profit from associates and joint ventures85 101 118
Income from the sale of associates 28
Operating income243 462 618
Gain on monetary position, net 403
Finance income9 23 30
Finance costs(177)(187)(184)
Other financial results84 175 (808)
Financial results, net(84)11 (559)
Profit before income tax159 473 59
Income tax(35)130 32
Profit of the year from continuing operations124 603 91
(Loss) Profit of the year from discontinued operations(592)197 196
(Loss) Profit of the year(468)800 287
Other comprehensive income (loss) Items that will not be reclassified to profit or loss
Results related to defined benefit plans1 2 (4)
Income tax 1
Share of loss from joint ventures (1)
Items that may be reclassified to profit or loss
Exchange differences on translation(8)(9)1
Other comprehensive loss of the year from continuing operations(7)(7)(3)
Other comprehensive (loss) income of the year from discontinued operations(33)(28)8
Other comprehensive (loss) income of the year(40)(35)5
Total comprehensive (loss) income of the year(508)765 292
Total (loss) income of the year attributable to:
Owners of the Company(367)692 224
Non - controlling interest(101)108 63
Total income (loss) of the year(468)800 287
Total (loss) income of the year attributable to owners of the Company:
Continuing operations132 594 85
Discontinued operations(499)98 139
Total income of the year attributable to owners of the company(367)692 224
Total comprehensive income of the year attributable to:
Owners of the Company(393)672 225
Non - controlling interest(115)93 67
Total comprehensive income of the year(508)765 292
Total comprehensive income (loss) of the year attributable to owners of the Company:
Continuing operations124 588 80
Discontinued operations(517)84 145
Total comprehensive income (loss) of the year attributable to owners of the company $ (393) $ 672 $ 225
(Loss) Earnings per share attributable to the equity holders of the Company during the year
Basic and diluted earnings per share from continuing operations $ 3.30 $ 12.38 $ 1.63
Basic and diluted (loss) earnings per share from discontinued operations(12.48)2.042.68
Total basic and diluted (loss) earnings per share $ (9.18) $ 14.42 $ 4.31

CONSOLIDATED STATEMENT OF FINAN

CONSOLIDATED STATEMENT OF FINANCIAL POSITION - USD ($) $ in MillionsDec. 31, 2020Dec. 31, 2019
NON-CURRENT ASSETS
Property, plant and equipment $ 1,610 $ 3,507
Intangible assets41 151
Right-of-use assets10 16
Deferred tax assets108 28
Investments in joint ventures and associates549 511
Financial assets at amortized cost100 18
Financial assets at fair value through profit and loss11 11
Other assets1 1
Trade and other receivables43 79
Total non-current assets2,473 4,322
CURRENT ASSETS
Inventories116 153
Financial assets at amortized cost25 54
Financial assets at fair value through profit and loss325 365
Derivative financial instruments 4
Trade and other receivables341 561
Cash and cash equivalents141 225
Total current assets948 1,362
Assets classified as held for sale1,469
Total assets4,890 5,684
SHAREHOLDERS' EQUITY
Share capital38 46
Share capital adjustment201 260
Share premium516 510
Treasury shares 1
Treasury shares adjustment1 1
Treasury shares cost(6)(44)
Legal reserve61 42
Voluntary reserve1,057 422
Other reserves(18)(18)
Retained earnings(372)726
Other comprehensive income(50)(29)
Equity attributable to owners of the company1,428 1,917
Non-controlling interest341 492
Total equity1,769 2,409
NON-CURRENT LIABILITIES
Investments in joint ventures and associates2 4
Provisions111 145
Income tax and minimum notional income tax provision131 10
Deferred revenue 5
Taxes payables2 4
Deferred tax liabilities1 368
Defined benefit plans17 27
Salaries and social security payable 4
Borrowings1,372 1,764
Trade and other payables16 90
Total non-current liabilities1,652 2,421
CURRENT LIABILITIES
Provisions16 20
Income tax and minimum notional income tax provision11 53
Taxes payables36 72
Defined benefit plans4 4
Salaries and social security payable23 65
Derivative financial instruments 3
Borrowings242 183
Trade and other payables116 454
Total current liabilities448 854
Liabilities associated to assets classified as held for sale1,021
Total liabilities3,121 3,275
Total liabilities and equity $ 4,890 $ 5,684

CONSOLIDATED STATEMENT OF CHANG

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in MillionsShare capitalShare capital adjustmentShare premiumTreasury sharesTreasury shares adjustmentTreasury shares costLegal reserveVoluntary reserveOther reservesOther comprehensive income / (loss)Retained earnings (Accumulated losses)SubtotalNon-controlling interestTotal
Beginning balance at Dec. 31, 2017 $ 55 $ 289 $ 491 $ (3) $ 19 $ 333 $ 10 $ (10) $ 313 $ 1,497 $ 472 $ 1,969
Change in accounting policies[1] (1)(1)(1)(2)
Balance as of Juanary 1, 201855 289 491 (3)19 333 10 (10)312 1,496 471 1,967
Constitution of legal and voluntary reserve 5 128 (133)
Stock compensation plans
Dividends provided for pay (2)(2)
Acquisition of own shares(5)(29) 5 29 (332) (23) (355)(14)(341)
Capital reduction (5)(25)296 (266)
Sale of interest in subsidiaries (93)(93)
Profit/loss for the year 224 224 63 287
Other comprehensive income for the year 1 1 4 5
Ending balance at Dec. 31, 201850 260 491 4 (39)24 195 (13)(9)403 1,366 429 1,795
Constitution of legal and voluntary reserve 18 351 (369)
Stock compensation plans 1 1 1
Dividends provided for pay (1)(1)
Acquisition of own shares(4) 19 4 (135) (6) (122)(29)(141)
Capital reduction (3)(3)130 (124)
Profit/loss for the year 692 692 108 800
Other comprehensive income for the year (20) (20)(15)(35)
Ending balance at Dec. 31, 201946 260 510 1 1 (44)42 422 (18)(29)726 1,917 492 2,409
Constitution of legal and voluntary reserve 19 707 (726)
Stock compensation plans
Dividends provided for pay (9)(9)
Acquisition of own shares(8)(59)6 8 59 (102) (96)(8)(104)
Capital reduction (9)(59)140 (72) (19)(19)
Profit/loss for the year (367)(367)(101)(468)
Other comprehensive income for the year (21)(5)(26)(14)(40)
Ending balance at Dec. 31, 2020 $ 38 $ 201 $ 516 $ 1 $ (6) $ 61 $ 1,057 $ (18) $ (50) $ (372) $ 1,428 $ 341 $ 1,769
[1]Adjustment to the opening balance in equity as a result of the application of IFRS 9, as amended, as of January 1, 2018. See Note 6.2.1.2

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions12 Months Ended
Dec. 31, 2020Dec. 31, 2019Dec. 31, 2018
Cash flows from operating activities:
Profit of the year from continuing operations $ 124 $ 603 $ 91
Adjustments to reconcile net profit to cash flows generated by operating activities:380 (23)521
Changes in operating assets and liabilities(22)52 (226)
Net cash generated by operating activities from discontinued operations211 170 224
Net cash generated by operating activities693 802 610
Cash flows from investing activities:
Payment for property, plant and equipment(124)(426)(455)
Payment for acquisitions of intangible assets 2
(Payment) collection for public securities and shares, net(151)190 31
Payments for capital integration in associates(3)(108)
Collections for sales of shares in companies and property, plant and equipment1 42 457
Dividends received3 87 19
Colletion (pay) from loans, net7 6 (3)
Early collection for sale of subsidiary5
Recovery (suscription) of investment funds, net93 (74)189
Net cash used in investing activities from discontinued operations(86)(86)(221)
Net cash (used in) generated by investing activities(255)(369)19
Cash flows from financing activities:
Proceeds from borrowings353 556 245
Payment of borrowings(291)(523)(240)
Payment of borrowings interests(190)(129)(116)
Payment for acquisition of own shares(104)(141)(341)
Payments of dividends from subsidiaries to third parties(9)(1)(2)
Repurchase and redemption of corporate bonds(110)(66)(3)
Payments of leases(2)(1)
Payments for capital reduction(19)
Net cash used in financing activities from discontinued operations(73)(85)(13)
Net cash used in financing activities(445)(390)(470)
(Decrease) Increase in cash and cash equivalents(7)43 159
Cash and cash equivalents at the begining of the year225 241 31
Cash and cash equivalents at the begining of the year reclasified to assets classified as held for sale 6
Exchange difference generated by cash and cash equivalents(25)(59)53
Loss on net monetary position generated by cash and cash equivalents (8)
Cash and cash equivalents at the end of the year reclasified to assets classified as held for sale(52)
(Decrease) Increase in cash and cash equivalents(7)43 159
Cash and cash equivalents at the end of the year $ 141 $ 225 $ 241

1. GENERAL INFORMATION AND GROU

1. GENERAL INFORMATION AND GROUP STRUCTURE12 Months Ended
Dec. 31, 2020
General Information And Group Structure
GENERAL INFORMATION AND GROUP STRUCTURENOTE
1 1.1
General information of the Company The
Company is a fully integrated power company in Argentina, which directly and through its subsidiaries, participates in the electric
energy and gas value chains. In
the generation segment, the Company, directly and through its subsidiaries and joint ventures, has a 4,955 MW installed capacity,
which represents approximately 12% of Argentina’s installed capacity, and is the second largest independent generator in
the country. Additionally, the Company is currently undergoing a process to expand its capacity by 295 MW. In
the distribution segment, the Company has a controlling interest in Edenor, the largest electricity distributor in Argentina,
which has more than 3.2 million customers and a concession area covering the Northern part of the City of Buenos Aires and Northwestern
Greater Buenos Aires. On account of the execution of the contract for the sale of the 51% interest in Edenor (see detail in Note
5.3.1), all Edenor’s assets and liabilities have been classified as held for sale as of December 31, 2020, and the associated
results and cash flows, for each of the years ended December 31, 2020, 2019 and 2018, are disclosed under discontinued operations. In
the oil and gas segment, the Company develops an important activity in gas and oil exploration and production, with operations
in 13 production areas and 5 exploratory areas reaching a production level of 6.9 million m3/day of natural gas and 4,400 barrels/day
of oil equivalent for oil in Argentina, as of December 31, 2020. Its main natural gas production blocks are located in the Provinces
of Neuquén and Río Negro. The results and cash flows for 2018 associated with the divestment mentioned in Note 5.3.2
are disclosed under discontinued operations. In
the petrochemicals segment, operations are located in the Republic of Argentina, where the Company operates three high-complexity
plants producing styrene, synthetic rubber and polystyrene, with a domestic market share ranging between 85% and 98%. Finally,
through the holding and others segment, the Company participates in the transmission and gas transportation businesses. In the
transmission business, the Company jointly controls Citelec, which has a controlling interest in Transener, a company engaged
in the operation and maintenance of a 21,090 km high-voltage electricity transmission network in Argentina with an 85% share
in the Argentine electricity transmission market. In the gas transportation business, the Company jointly controls CIESA, which
has a controlling interest in TGS, a company holding a concession for the transportation of natural gas with 9,231 km of gas pipelines
in the center, west and south of Argentina, and which is also engaged in the processing and sale of natural gas liquids through
the Cerri Complex, located in Bahía Blanca, in the Province of Buenos Aires. Besides, the Company owns a 28.5% direct interest
in Refinor, which has a refinery with an installed capacity of 25.8 kb of oil per day and 91 gas stations. Additionally, the segment
includes advisory services provided to related companies. The
results and cash flows for 2018 associated with the divestment of the main assets of the refining and distribution segment mentioned
in Note 5.3.3 are disclosed under discontinued operations in the Holding and others segment.
1.2 Economic context
in which the Company operates The
Company operates in a complex economic context which main variables have recently suffered significant volatility both in the
domestic and international spheres. The
outbreak of the COVID-19 pandemic in March 2020 caused by the Coronavirus has brought about several consequences globally. Most
governments around the world, including the Argentine Government, implemented drastic measures to contain the spread of the virus,
including, but not limited to, the closure of borders and the mandatory lockdown of the population, halting non-essential economic
activities and generating a pronounced decrease in the economic activity and production levels. As a result, most governments
implemented a series of tax aid measures to sustain the income of part of the affected population, mitigate the risk of disruptions
in payment chains and avoid financial crises. Globally,
as from the month of May, a gradual lockdown easing process started; however, some countries experienced a new increase in infection
levels, which led to the temporary reimplementation of some measures. In
Argentina, the social, preventive and mandatory lockdown measures decreed by the Federal Government as from March 20, 2020 have
affected the power industry, mainly in the second and third quarters of 2020, as detailed below:
- As regards the electric
power generation market, in the second and third quarters of 2020 the SADI’s net demand for electricity decreased by
5.7% and 2.0% compared to the same periods of 2019, mainly due to the lower industrial and commercial activity resulting from
the social lockdown. Furthermore, the tariff freeze and the social lockdown have generated delays in the electricity distribution
company’s payment chain, added to deferrals in the National Treasury contributions, as a result of which CAMMESA has
recorded a growing delay in payment terms to generation and hydrocarbon producers, reaching a maximum of 45 days in July 2020.
Additionally, the SE instructed CAMMESA to suspend the automatic adjustment mechanism for the spot remuneration set by SE
Resolution No. 31/20.
- As regards the gas
sector, in the second and third quarters of 2020 gas production recorded a 9.0% and 10.2% year-on-year decrease, respectively,
due to the restraining effects of the social, preventive and mandatory lockdown, combined with a higher efficiency of power
generation facilities as a result of the renewable and thermal energy installed over the last three years. The average price
of gas at wellhead in the second and third quarters of 2020 amounted to US$2.2 and US$2.4 per MMBTU, respectively, experiencing
an approximate 35% decrease compared with the same periods of 2019. This decrease is mainly due to the lower prices tendered
at CAMMESA’s monthly calls, the lower industrial activity and the diluting effect of inflation on the price of gas sold
to distributors.
- The economic recession
caused by the spread of COVID-19, the significant decline in the demand for fuels and the disagreement between producers that
are members of the Organization of Oil Exporting Countries (“OPEC”) and non-OPEC (“OPEC+”) producers
resulted in a supply and storage crisis of such magnitude that the oil market was greatly impacted. The WTI showed a record
drop, reaching -37.63 US$/bbl, whereas the Brent price fell below 20 US$/bbl. After the cutbacks on supply implemented by
the OPEC and the OPEC+ and the gradual easing of lockdown measures attempted by several countries, a recovery trend was evidenced
in the listings of crude oil and its derivatives, with the Brent crude oil showing a sustained quotation above 40 US$/bbl
as from mid-June. Even though domestic oil prices use international values as benchmarks, they have experienced a strong decline
as a result of the collapse in demand. In this sense, on May 18, 2020, the Federal Government set a support price of 45 US$/barrel
for the domestic production. However, this support price was suspended as a result of the increase in the Brent reference
price. (see Note 2.3.2).
- As regards the petrochemicals
segment, during the second quarter of 2020 there was a significant decrease in the demand for certain products sold by the
Company, such as styrene and octane bases and, to a lesser extent, polystyrene. As a result of these declines, the styrene
and reforming plants halted production for 40 and 60 days, respectively, between May and June, whereas the polystyrene plant
stopped production for 30 days in June. Furthermore, the production of rubber had to be suspended in the months of April and
May as it was not considered an essential activity and in line with the shutdown of its main domestic customers, which impacted
on the recoverability of inventories of several raw materials and products for sale, generating the posting of an allowance
for impairment of inventory for US$ 11 million.. Sold volumes experienced a substantial improvement as from the third
quarter of 2020 as a result of the recovery of the industrial activity and the international context. The
Argentine economy was undergoing a recession process, which was deepened by the described COVID-19 pandemic, with an accumulated
11.8% year-on-year fall in the GDP as of the third quarter of 2020, a 36.1% cumulative inflation (CPI) for 2020 and a 40.5% depreciation
of the peso against the U.S. dollar according to the BNA’s exchange rate. Furthermore, stricter exchange restrictions were
imposed (see Note 2.7), which affect the value of the foreign currency in existing alternative markets for certain exchange transactions
that are restricted in the official market. The
context of volatility and uncertainty continues as of the date of issuance of these Consolidated Financial Statements. The
Company’s Management permanently monitors the evolution of the variables affecting its business to define its course of
action and identify potential impacts on its assets and financial position. The Company’s Consolidated Financial Statements
should be read in the light of these circumstances.

2. REGULATORY FRAMEWORK

2. REGULATORY FRAMEWORK12 Months Ended
Dec. 31, 2020
Regulatory Framework
REGULATORY FRAMEWORKNOTE
2 2.1 Generation
2.1.1
Generation units The
Company’s revenues from the electric power generation activity come from: i) sales contracts with large users within the
MAT (Resolutions No. 1,281/06 and No. 281/17); ii) supply agreements with CAMMESA (Resolutions No. 220/07, No. 21/16, No. 287/17
and Renovar Programs) and iii) sales to the Spot market pursuant to the provisions applicable within the WEM administered by CAMMESA
(SEE Resolution No. 19/17, from February 2017, SRRYME Resolution No. 1/19 as from March 2019 and SE Resolution No. 31/20 from
February 2020). Furthermore, energy not committed under sales contracts with large users within the MAT and with CAMMESA are remunerated
at the Spot market. The
Company’s generating units are detailed below, directly and through its subsidiaries and joint businesses:
In
operation:
Generator Generating
unit Tecnology Power Applicable
regime (1)
CTG GUEMTG01 TG 100
MW Energy
Plus Res. No. 1,281/06
CTG GUEMTV11 TV ≤100
MW SE
Resolutions No. 31/20
CTG GUEMTV12 TV ≤100
MW SE
Resolutions No. 31/20
CTG GUEMTV13 TV >100
MW SE
Resolutions No. 31/20
Piquirenda PIQIDI
01-10 MG 30
MW SE
Resolution No. 220/07
CPB BBLATV29 TV >100
MW SE
Resolutions No. 31/20
CPB BBLATV30 TV >100
MW SE
Resolutions No. 31/20
CT
Ing. White BBLMD01-06 MG 100
MW SEE
Resolution No. 21/16
CTLL LDLATG01 TG >50
MW SE
Resolutions No. 31/20
CTLL LDLATG02 TG >50
MW SE
Resolutions No. 31/20
CTLL LDLATG03 TG >50
MW SE
Resolutions No. 31/20
CTLL LDLATV01 TV 180
MW SE
Resolution No. 220/07 (1)
CTLL LDLATG04 TG 105
MW SEE
Res. 220/07 (75%)
CTLL LDLATG05 TG 105
MW SEE
Resolution No. 21/16
CTGEBA GEBATG01/TG02/TV01 CC >150
MW SE
Resolutions No. 31/20
CTGEBA GEBATG03 TG 169
MW Energy
Plus Res. No. 1.281/06
CTGEBA GEBATG03/TG04/TV02 CC 400
MW SE
Resolutions No. 287/17
Ecoenergía CERITV01 TV Renewable ≤
50 Energy
Plus Res. N° 1,281/06 (1)
CT
Parque Pilar PILBD01-06 MG 100
MW SEE
Resolution No. 21/16 (1)
CTB EBARTG01
- TG02 TG HI
– Small 50<P≤120 SE
Resolution No. 220/07 (1)
HIDISA AGUA
DEL TORO HI HI
– Small 50<P≤120 SE
Resolutions No. 31/20
HIDISA EL
TIGRE HI HI
– Small 50<P≤120 SE
Resolutions No. 31/20
HIDISA LOS
REYUNOS HB HB
– Media 120<P≤300 SE
Resolutions No. 31/20
HINISA NIHUIL
I - II - III HI HI
– Chica 50<P≤120 SE
Resolutions No. 31/20
HPPL PPLEHI HI HI
– Media 120<P≤300 SE
Resolutions No. 31/20
P.E.
M. Cebreiro CORTEO Eólica 100
MW Renovar
PEPE
II PAMEEO Eólica 53
MW SEE
Resolution No. 281/17
PEPE
III BAHIEO Eólica 53
MW SEE
Resolution No. 281/17
(1)
In
construction:
Generator Tecnology Capacity Applicable
regime
CTLL MG 15
MW SE
Resolutions No. 31/20
CTB CC
280
MW SE
Resolution No. 220/07 2.1.2
Remuneration at the Spot market Resolutions
SEE No. 19/17 and SRRYME No. 1/19, applicable as from February 2017 and March 2019, respectively, established remunerative items
based on technology and scale with US$-denominated prices payable in AR$ by applying BCRA’s exchange rate. On
February 27, 2020, SE Resolution No. 31/20 was published in the BO, which superseded the remuneration scheme established by SRRYME
Resolution No. 1/19, and provided as follows: i) a reduction in U.S.-denominated values for power capacity availability, maintaining
the values of the remuneration for generated and operated energy; ii) converted remuneration values to Argentine pesos at a 60
$/US$ exchange rate; and iii) an additional remuneration, in pesos, for the power capacity generated during the hours of maximum
thermal demand of the month, taking into consideration the average power capacity generated by thermal generators and the average
power capacity operated by hydroelectric generators. Finally,
it established that the new values set would be updated monthly from the second month of implementation, through a factor that
envisages a 60% adjustment by IPC and a 40% adjustment by IPIM. However, on 8 April 2020, through Note No. 2020-24910606-APN-SE-MDP
of 8 April 2020, the SE instructed CAMMESA to postpone until a new decision the implementation of the above-mentioned automatic
adjustment mechanism, which has not been restored to the date of issuance of these Consolidated Financial Statements. 2.1.2.1
Remuneration for Available Power Capacity 2.1.2.1.1
Thermal Power Generators Resolution
SEE No. 19/17 set a minimum remuneration for power capacity based on technology and scale, and allowed generating, co-generating
and self-generating agents owning conventional thermal power plants to offer guaranteed availability commitments for the energy
and power capacity generated by their units and not committed under sales contracts with large users within the MAT and supply
agreements with CAMMESA. This scheme remains in force until the current resolution. In
Resolution SEE No. 19/17, the availability commitments for each unit were declared for a term of three years, together with information
for the summer seasonal programming, with the possibility to offer different availability values for the summer and winter six-month
periods. The thermal generators’ remuneration for committed power capacity was proportional to their compliance. In SRRYME
Resolution No. 1/19 and SE Resolution No. 31/20, an offer scheme for quarterly periods was established: a) summer (December through
February); b) winter (June through August), and c) ‘Other’, which comprises two quarters (March through May, and September
through November). The
power remuneration for thermal generators with commitments is proportional to their compliance. The
minimum remuneration for generators with no availability commitments includes the following scales and prices:
Technology
/ Scale SEE
No. 19/17 (US$
/ MW-month) SRRYME
No. 1/19 (US$
/ MW-month) SE
No. 31/20 (AR$
/ MW-month)
Large
CC Capacity > 150 MW 3,050 3,050 100,650
Large
ST Capacity > 100 MW 4,350 4,350 143,550
Small
ST Capacity > 100 MW 5,700 5,200 171,600
Large
GT Capacity > 50 MW 3,550 3,550 117,150 The
remuneration for guaranteed power capacity to generators with availability commitments is:
Period SEE
No. 19/17 (US$
/ MW-month) SRRYME
No. 1/19 (US$
/ MW-month) SE
No. 31/20 (AR$
/ MW-month)
Summer
– Winter 7,000 7,000 360,000
Fall
- Spring 7,000 5,500 270,000 Under
SRRYME Resolution No. 1/19 provided for the application on the power capacity remuneration of a coefficient derived from the average
utilization factor over the unit’s last twelve months: with a minimum 70% of the utilization factor, 100% of the power capacity
payment was collected; if the utilization was between 30% and 70%, the power capacity payment ranged from 70% to 100%; and if
the utilization factor was lower than 30%, 70% of the power capacity payment was collected. SE Resolution No. 31/20 maintained
the same formula than the previous regime, but in case the utilization factor is lower than 30%, 60% of the power capacity payment
is collected. Finally,
SEE Resolution No. 19/17 established an additional remuneration of 2,000 US$/MW-month aiming to encourage availability commitments
in the grid’s higher demand periods, that was abolished by SRRYME Resolution No. 1/19. However, the SE Resolution No. 31/20
established an additional remuneration for the hours of maximum thermal requirement of the month (hmrt), which corresponds to
the 50 hours with the largest dispatch of thermal generation of each month divided into two blocks of 25 hours each, applying
the following prices to the average generated power:
Period First
25 hours ($
/ MW-hmrt) Second
25 hours ($
/ MW-hmrt)
Summer
– Winter 45,000 22,500
Fall
- Spring 7,500 - 2.1.2.1.2
Hydroelectric Generators Resolutions
SEE No. 19/17 and SRRYME No. 1/19 set a base remuneration and an additional remuneration for power capacity. Power
capacity availability was determined independently of the reservoir level, the contributions made, or the expenses incurred. Furthermore,
in the case of pumping hydroelectric power plants, the operation as turbine and pump at all hours within the period was considered
to calculate availability. The
base and the additional remunerations included the following scales and prices:
Technology
/ Scale Base (US$
/ MW-month) Additional (US$
/ MW-month)
Medium
HI Capacity > 120 ≤ 300 MW 3,000 1,000
Small
HI Capacity > 50 ≤ 120 MW 4,500 1,000
Medium
Pumped HI Capacity > 120 ≤ 300 MW 2,000 500
Renewable
HI Capacity ≤ 50 MW 8,000 1,000 Under
SEE Res. No. 19/17, the payment for power capacity was determined by the actual power capacity plus that under programmed and/or
agreed maintenance, whereas under SRRYME Res, No. 1/19, hours of unavailability due to programmed and/or agreed maintenance were
not computed for the calculation of the power capacity remuneration. However, in order to contemplate the incidence of programmed
maintenance works in power plants, from May 2019, pursuant to SME Note No. 46631495/19, the application of a 1.05 factor over
the power capacity payment was established. In
case of hydroelectric power plants that were responsible for control structures on river courses and did not have an associated
power plant, a 1.20 factor was applied to the plant at the headwaters. The
allocation and collection of 50% of the additional remuneration was conditional upon the generator taking out insurance, to CAMMESA’s
satisfaction, to cover for major incidents on critical equipment, as well as upon the progressive updating of the plant’s
control systems pursuant to an investment plan to be submitted in accordance with criteria defined by the SEE. The
following are the power by technology and scale values set under SE Resolution No. 31/20:
Technology
/ Scale SE
No. 31/20 (AR$
/ MW-month)
Medium
HI Capacity > 120 ≤ 300 MW 132,000
Small
HI Capacity > 50 ≤ 120 MW 181,500
Medium
Pumped HI Capacity > 120 ≤ 300 MW 132,000
Renewable
HI Capacity ≤ 50 MW 297,000
Period First
25 hours ($
/ MW-hmrt) Second
25 hours ($
/ MW-hmrt)
Summer
– Winter 39,000 19,500
Fall
- Spring 6,500 - Furthermore,
SE Resolution 31/20 maintains the application of a 1.05 factor over the power capacity to compensate the incidence of programmed
maintenance works and the 1.20 factor for units maintaining control structures on river courses and not having an associated power
plant is maintained. 2.1.2.1.3
Wind generators SEE
Resolution No. 19/17 established a remuneration associated with the availability of the installed equipment at a base price of
7.5 US$/MW and an additional price of 17.5 US$/MW, which was abrogated by SRRYME Resolution No. 1/19. 2.1.2.2
Remuneration for Generated and Operated Energy Resolutions
SEE No. 19/17 and SRRYME No. 1/19 set a remuneration for generated energy with prices ranging from 5 to 10 US$/MWh and from 4
US$/MWh to 7 US$/MWh, respectively, depending on the technology and type of fuel used. The
remuneration for operated energy applicable to the integration of hourly power capacities for the period was valued at 2.0 US$/MWh
and 1.4 US$/MWh for any type of fuel under Resolutions SEE No. 19/17 and SRRYME Resolution No. 1/19, respectively. SE
Resolution No. 31/20 establishes a remuneration for Generated Energy with prices ranging between 240 and 420 $/MWh, depending
on the type of fuel and a remuneration for Operated Energy, with an 84 $/MWh price for any type of fuel. It
should be noted that, in the event that the generation unit is dispatched outside the optimal dispatch, remuneration for generated
energy will be set at 60% of the net installed power capacity, regardless of the energy delivered by the generation unit. In
the case of hydroelectric power plants, prices for generated and operated energy under Resolutions SEE No. 19/17 and SRRYME No.
1/19 were 3.5 and 1.4 US$/MWh, respectively, regardless of the scale. Under SE Resolution No. 31/20, they are remunerated at 210
$/MWh and 84 $/MWh, respectively. The remuneration for operated energy must correspond to the optimal dispatch of the system,
however, the resolution does not indicate what the consequence would be otherwise. In
the case of hydroelectric pumping plants, both the energy generated and the one consumed for pumping are considered. In addition,
if it functions as a synchronous compensator, 60 $/MVAr will be recognized for the megavolt exchanged with the network when required
and 84 $/MWh for the energy operated. As
regards energy generated from unconventional sources, SRRYME Resolution No. 1/19 established a single remuneration value of US$ 28/MWh,
irrespective of the source used. SE Resolution No. 31/20 sets a value of 1,680 $/MWh. Energy generated prior to the commissioning
by the Organismo Encargado del Despacho will be remunerated at 50% of the above-mentioned remuneration. 2.1.2.3
Additional Remuneration for Efficiency and for Low-Use Thermal Generators SEE
Resolution No. 19/17 provided for an efficiency incentive that consisted of the recognition of an additional remuneration equivalent
to the remuneration for the generated energy by the percentage difference between the actual consumption and the reference consumption
determined for each unit and fuel type, as well as an additional remuneration for low-use thermal generators and having frequent
startups based on the monthly generated energy for a price of 2.6 US$/MWh multiplied by the usage/startup factor, which were abrogated
under the scheme set under SRRYME Resolution No. 1/19. 2.1.2.4
Suspension of contracts within the MAT The
suspension of contracts within the MAT (excluding those derived from a differential remuneration scheme) provided for by SE Resolution
No. 95/13 remains in effect. 2.1.3
Sales contracts with large users within the MAT 2.1.3.1
Energy Plus With
the purpose of encouraging new generation works, in 2006 the SE approved Resolution No. 1,281/06 established a specific regime
which would remunerate newly installed generation sold to a certain category of Large Users at higher prices. The
Energy Plus service consists of the offer of additional generation availability by generators, co-generators and self-generators
which, as of the date of publication of SE Resolution No. 1,281/06, were not WEM agents or did not have facilities or an interconnection
with the WEM; Considering that:
- These plants should
have fuel supply and transportation facilities;
- The energy used
by GU300 in excess of the Base Demand (energy consumption for 2005 year) qualifies for Energy Plus agreements within the MAT
at a price negotiated between the parties; and
- For new GU300 entering
the system, their Base Demand will equal zero. If
a generator cannot meet the power demand by an Energy Plus customer, it should purchase that power in the market at the operated
marginal cost, or, alternatively, support the committed demand in case of unavailability through agreements with other Energía
Plus generators. Currently,
the Company has Power Availability agreements in force with other generators whereby, in case of unavailability, it may purchase
or sell power to support the contracts mutually. Furthermore,
the SE, through Note No. 567/07, as amended, established that GU300 not purchasing their surplus demand in the MAT should pay
the Average Incremental Charge of Surplus Demand. As from the month of June 2018, pursuant to SE Note No. 28663845/18, the
CMIDE became the greater of $1,200/MWh or the temporary dispatch surcharge. Due
to the drop in surplus demand as a consequence of the decrease in the economic activity, some GU300 decide not to enter into Energy
Plus contracts (with higher prices), and generators have to sell their energy at the spot market with lower profitability margins. Additionally,
the Energy Plus contracts market continues being affected by the migration of demand towards renewable energy contracts in the
MAT ER. Under
this regime, the Company —through its power plants Güemes, EcoEnergía and Genelba— sells its energy and
power capacity for a maximum amount of 283 MW. The values of Energy Plus contracts are mostly denominated in U.S. dollars. 2.1.3.2
Renewable Energy Term Market (“MAT ER” Regime) Pursuant
to Resolution No. 281/17, the MEyM regulated the MAT ER Regime with the purpose of setting the conditions for large users within
the WEM and WEM distributing agents’ large users covered by Section 9 of Law No. 27,191 to meet their demand supply obligation
from renewable sources through the individual purchase within the MAT ER from renewable sources or self-generation from renewable
sources. Furthermore,
it regulates the conditions applicable to projects for the generation, self-generation and co-generation of electric power from
renewable sources, and creates the el Registro Nacional de Proyectos de Generación de Energía Eléctrica de Fuente
Renovable for the registration of these projects. Projects
destined to the supply of electric power from renewable sources under the MAT ER Regime may not be covered by other remuneration
mechanisms, such as the agreements under the Renovar rounds. Surplus energy will be sold in the spot market. Finally,
contracts executed under the MAT ER Regime will be administered and managed in accordance with the WEM procedures. The contractual
terms —life, allocation priorities, prices and other conditions, notwithstanding the maximum price set forth in Section
9 of Law No. 27,191— may be freely agreed between the parties, although the committed electricity volumes will be limited
by the electric power from renewable sources produced by the generator or supplied by other generators or suppliers with which
it has purchase agreements in place. Within
the framework of this provision, the Company, through its PEPE II and III wind farms, sells energy for a maximum amount of 106
MW and, additionally, has started selling third-party generators’ renewable energy for an approximate volume of 2 MW. 2.1.4
Supply Agreements with CAMMESA 2.1.4.1
SE Resolution No. 220/07 (“Agreement Res.220”) Aiming
to encourage new investments to increase the generation offer, the SE passed Resolution No. 220/07, which empowers CAMMESA to
enter into Agreement with WEM Generating Agents for the energy produced with new equipment. These will be long-term agreements
and the price payable by CAMMESA should compensate the investments made by the agent at a rate of return to be accepted by the
SE. Under
this regulation, the Company, through its power plants Piquirenda, Loma de La Lata and Barragán, has executed Agreement Res.220
to sell energy and power capacity for a total amount of 856 MW. It
is worth mentioning that the 10-year term for Piquirenda and Loma de la Lata contracts (210 MW) expires in July and November 2021,
respectively. Besides, Barragán has an expansion project underway to add 280 MW under this scheme, which commissioning is
estimated for the first quarter of 2022. For
further information on the project to the CC at CTB, see Note 16.1.3. 2.1.4.2
SEE Resolution No. 21/16 As
a result of the state of emergency in the national electricity sector, the SEE issued Resolution No. 21/16 calling for parties
interested in offering new thermal power generation capacity with the commitment to making it available through the WEM for the
2016/2017 summer; 2017 winter, and 2017/2018 summer periods. For
the awarded projects, wholesale power purchase agreements were entered into with CAMMESA for a term of 10 years, with a remuneration
made up of the available power capacity price plus the variable non-fuel cost for the delivered energy and the fuel cost (if offered),
less penalties and fuel surpluses. Surplus power capacity is sold in the spot market. Pursuant
to this resolution, the Company, through its Loma de la Lata, Ingeniero White and Pilar thermal power plants, has effective agreements
with CAMMESA for the sale of energy and power capacity for a total 305 MW. 2.1.4.3
SEE Resolution No. 287/17 On
May 10, 2017 the SEE issued Resolution No. 287/17 launching a call for tenders for co-generation projects and the closing to CC
over existing equipment. The projects should have low specific consumption (lower than 1,680 kcal/kWh with natural gas and 1,820
kcal/kWh with alternative liquid fuels), and the new capacity should not exceed the existing electric power transmission capacity;
otherwise, the cost of the necessary extensions will be borne by the bidder. For
the awarded projects, wholesale power purchase agreements were entered into for a term of 15 years, with a remuneration made up
of the available power capacity price plus the variable non-fuel cost for the delivered energy and the fuel cost (if offered),
less penalties and fuel surpluses. Surplus power capacity is sold in the spot market. Pursuant
to this regulation, the Company, through its Genelba thermal power plant, has entered into an agreement with CAMMESA for the sale
of energy and power capacity for a total 400 MW (see Note 16.1.2). 2.1.4.4
Renovar Programs In
order to meet the objectives, set by Law No. 26,190 and Law No. 27,191 promoting the use of renewable sources of energy, the MEyM
called for open rounds for the hiring of electric power from renewable sources (RenovAr Programs, Rounds 1, 1.5 and 2) within
the WEM. These calls aimed to assign power capacity contracts from different technologies (wind energy, solar energy, biomass,
biogas and small hydraulic developments with a power capacity of up to 50 MW). For
the awarded projects, renewable electric power supply agreements were executed for the sale of an annual committed electric power
block for a term of 20 years. Additionally,
several measures have been established to promote the construction of projects for the generation of energy from renewable sources,
including tax benefits (advance VAT reimbursement, accelerated depreciation of the income tax, import duty exemptions, etc.) and
the creation of a fund for the development of renewable energies destined, among other objectives, to the granting of loans and
capital contributions for the financing of such projects. Under
this regulation, the Company, through Greenwind, has a supply agreement in place with CAMMESA for a total 100 MW. 2.1.5
Fuel supply for thermal power plants On
November 6, 2018, SGE Resolution No. 70/18 was published in the BO, which empowered generating, co-generating and self-generating
agents within the WEM to acquire the fuels required for own generation; this resolution superseded SE Resolution No. 95/13, which
provided that fuel supply for electric power generation would be centralized in CAMMESA (with the exception of generation under
the Energy Plus regime). Under the scheme set forth by SGE Resolution No. 70/18, the cost of generation with own fuels was valued
according to the mechanism for the recognition of the Variable Production Costs recognized by CAMMESA. During its term of validity,
CAMMESA remained in charge of the commercial management and the dispatch of fuels for generators that do not or cannot make use
of this option. In
the seasonal programming conducted on November 12, 2018, the Company opted to make use of the self-supply option, and allocated
a significant part of its natural gas production as an input for the dispatch of its thermal units. On
December 27, 2019, the Ministry of Productive Development passed Resolution No. 12/19, abrogating, effective as from December
30, 2019, SGE Resolution No. 70/18, and re-establishing the validity of section 8 and section 4 of SE Resolutions No. 95/13 and
529/14, respectively, thus restoring the centralized scheme in CAMMESA for the supply of fuels for generation purposes (except
for generators under the Energy Plus scheme and with Wholesale Power Purchase Agreements under Resolution No. 287/17). In
December 2020, on account of the implementation of the GasAr Plan (see Note 2.3.2.1.2), SE Resolution No. 354/20 was passed,
which established a new dispatch order for generation units based on the fuel supplied for their operation under a centralized
dispatch scheme. SE
Resolution No. 354/20 established the gas volumes CAMMESA should prioritize in the electricity dispatch. In this sense, firm volumes
to be used by CAMMESA were defined, including: i) volumes corresponding to contracts entered into by CAMMESA with producers acceding
to the GasAr Plan; ii) volumes corresponding to contracts executed by adherent producers with generators acceding to the centralized
dispatch (these volumes will be discounted by the adherent producers from the applicable quota for which they should enter into
contracts with CAMMESA under the GasAr Plan) and; iii) volumes to meet the Take or Pay (“TOP”) obligations under the
supply agreement entered into between IEASA and Yacimientos Petrolíferos Fiscales Bolivianos (“YPFB”). Besides,
an electricity dispatch priority scheme was set based on the allocation of the natural gas quota taking into consideration the
take or pay obligations. To this effect, the following priorities were set (within each priority level, the order of agents is
set based on the generator’s production cost):
(i) Dispatch Priority
1: Generators, Self-generators and/or Co-generators supplied with a natural gas quota under a TOP Bolivia condition assigned
by IEASA. If a generator with a fuel stocking obligation optionally acquires from IEASA natural gas from Bolivia, this volume
will be included in this quota.
(ii) Dispatch Priority
2: Generators, Self-generators and/or Co-generators supplied by CAMMESA with a natural gas quota from the centralized list
of volumes up to the TOP of each contract.
(iii) Dispatch Priority
3: Generators, Self-generators and/or Co-generators supplied by CAMMESA with a natural gas quota from the centralized list
of volumes for the Daily Maximum Amount (DMA) less those corresponding to the TOP of each contract.
(iv) Dispatch Priority
4: Generators, Self-generators and/or Co-generators supplied by CAMMESA with natural gas or LNG coming from other firm commitments
undertaken by CAMMESA.
(v) Dispatch Priority
5: Generators, Self-generators and/or Co-generators supplied with a gas quota from the unassigned, spot natural gas contracts
from any source, acquired by CAMMESA and/or the Generator, according to the supply source. In the case of a generator with
own fuel, the maximum amount to be acknowledged will be the corresponding reference prices. As
regards the costs associated with the supply of these fuels, it was established that the electricity demand will bear, among others,
the regulated transportation costs, the cost of natural gas and the applicable take or pay obligations. Generating
agents that kept the possibility to purchase their fuel supply (agents under the Energy Plus Program or with Wholesale Purchase
Agreements under Resolution No. 287/17) could opt in or out of CAMMESA’s unified dispatch. Acceding to the unified dispatch
involves the operating assignment of the contracted firm gas and transportation volumes. Based on their option, the priority order
was modified as described above. In
the specific case of generators with wholesale power purchase agreements under SEE Resolution No. 287/17, it was provided that
they would have the option of canceling the self-supply obligation and the resulting recognition of its associated costs, having
to maintain the respective transportation capacity for its management in the centralized dispatch. The
Company assigned the firm gas and transportation volumes committed to the supply of Genelba Plus’ CC and Energy Plus contracts.
In the case of the supply to Genelba Plus’ CC, the assignment will remain effective during the life of the GasAr Plan, and
it may be revoked by the generator with a minimum advance notice of 30 business days. Within this framework, the parties agreed
to enter into an addendum to the Wholesale Power Purchase Agreement to establish the modifications regarding this new supply scheme,
which execution is pending as of the issuance of these Consolidated Financial Statements. 2.1.6
Agreement for the Regularization and Settlement of Receivables with the WEM On
August 5, 2019 and under the call to Generators, the Company and certain subsidiaries executed with CAMMESA an Agreement for the
Regularization and Settlement of Receivables with the WEM (the “Agreement”), as instructed through SGE Note NO-2019-66843995-APN-SGE#MHA. Pursuant
to the Agreement, CAMMESA undertook to pay the outstanding Sales Liquidations with Maturity Date to be Defined (“LVFVD”)
after discounting the debts taken on with the WEM under the Financing Agreements, Loan Agreements and Receivables Assignment Agreements
executed by generators, and applying a 18% write-off on the balance. In this sense, the parties have agreed a total net settlement
amount for the outstanding LVFVDs taking into consideration the interest update as of July 31, 2019 and the effects of the mentioned
write-off, which amounts to $ 2,122.7 million, before tax withholdings for a total amount of $ 392.9 million. Finally, on August
7, 2019, the total agreed amount was collected. In
furtherance of the undertaken commitments, the Company and certain subsidiaries have waived all submitted claims and have irrevocably
dismissed their rights to file any kind of claim (whether administrative and/or judicial) against the Federal Government, the
SGE and/or CAMMESA regarding the outstanding LVFVDs. As
a result of the Agreement, the Company has recognized revenues in the amount of US$ 5.9 million and net financial profits for
US$ 71.1 million in the year ended December 31, 2019. 2.1.7
Loosening up of charges and interests in late payment of the economic transaction Resolutions
SRRYME No. 29/2019 and SE No. 148/20 provided for a relaxation in the application of penalty interest and charges in case of delays
in the payment of economic transactions within the WEM.
(i) Reduction of
surcharges:
(ii) Compensatory
and penalty interest
(iii) Compensations:
. 2.1.8
Generation projects As
a result of the COVID-19 pandemic (see Note 1.2), through Note NO-2020-37458730-APN-SE#MDP the SE instructed the temporary suspension
of terms for the execution of the contracts under the RenovAr Programs (Rounds 1, 1.5, 2 and 3), former SE Resolution No. 712/09,
former MEyM Resolution No. 202/16 and former SEE Resolution No. 287/17, as well as for projects within the framework of former
MEyM Resolution No. 281/17. The instruction applies to projects which had not been previously commissioned as from March 12, 2020
and until September 12, 2020, both dates inclusive. Consequently, the temporary suspension of notices of non-compliance with the
scheduled work progress dates was instructed, both regarding the increase in the contract performance bond and the imposition
of the stipulated penalties, as applicable, under all agreements entered into pursuant to such resolutions. Furthermore,
it ordered the temporary suspension of notices of breach upon failure to comply with the date scheduled for the commercial commissioning
of projects with a dispatch priority under the terms of former MEyM Resolution No. 281/17, and of the collection of the amounts
stipulated in the event of breach, in all cases keeping the timely granted dispatch priorities. 2.2
Transmission 2.2.1
Tariff situation The
Solidarity Law, which entered into effect on December 23, 2019, provided that electricity tariffs under federal jurisdiction would
remain unchanged, and contemplates the possibility to perform an extraordinary review of the current RTI for a maximum term of
up to 180 days. In
2020, the ENRE did not apply Transener’s semi-annual tariff update mechanism established in the RTI, the tariff scheme in
force being that resulting from the August 2019 update. In
this sense, on December 16, 2020, pursuant to Executive Order No. 1020/20, the Federal Government established the beginning of
the renegotiation of the current RTI for the electricity and natural gas transportation and distribution utility services, which
proceeding may not exceed a term of 2 years. Until the conclusion of each renegotiation, all Agreements corresponding to the respective
RTIs in effect will be suspended within the scopes determined in each case by the Regulatory Entities for reasons of public interest.
The transitory and final agreements will be entered into with the ENRE or ENARGAS, and the Ministry of Economy ad referendum
On
January 19, 2021, through Resolution No. 17/21, the ENRE launched the proceeding for the transitory adjustment of tariffs of the
transmission public utility aiming to establish a Transitional Tariff Regime until reaching a Final Renegotiation Agreement, and
summoning Transportation Companies. In this sense, a request for information to begin this process was received. As
of the issuance of these Consolidated Financial Statements, Transener has complied with this requirement, prioritizing the operating
costs and capital investments required to maintain service quality. On
March 3, 2021, pursuant to Re

3. BASIS OF PREPARATION

3. BASIS OF PREPARATION12 Months Ended
Dec. 31, 2020
Basis Of Preparation
BASIS OF PREPARATIONNOTE
3 These
Consolidated Financial Statements have been prepared in accordance with IFRS issued by IASB and have been approved for issue by
the Board of Directors dated March 10, 2021. Significant accounting policies adopted in the preparation of these Consolidated
Financial Statements are described in Note 4, which have been consistently applied. These
accounting policies have been applied consistently by all Group companies. On
account of the execution of the contract for the sale of the 51% interest in Edenor (see detail in Note 5.3.1), comparative results
corresponding to the electricity distribution segment have been disclosed under “Discontinued operations” in the statement
of comprehensive income. Figures
corresponding to commercial interest presented in comparative form have been reclassified from Financial income to Other operating
income to maintain consistency with this period’s figures in accordance with the change of policy detailed in Note 4. The
Company adopted the U.S. dollar as its functional currency commencing on January 1, 2019; therefore, previous comparative figures
have been restated in terms of the measuring unit current as of December 31, 2018 in accordance with IAS 29 — “Financial
reporting in hyperinflationary economies”, since the Peso was the Company’s functional currency up to that date. Additionally,
other not significant reclassifications have been made to those financial statements to keep the consistency in the presentation
with the amounts of the current year.

4. ACCOUNTING POLICIES

4. ACCOUNTING POLICIES12 Months Ended
Dec. 31, 2020
Disclosure of voluntary change in accounting policy [abstract]
ACCOUNTING POLICIESNOTE 4 ACCOUNTING
POLICIES The main accounting policies used in the preparation of
these consolidated Consolidated Financial Statements are explained below. The Company has modified its policy
for the classification of commercial interest in the statement of comprehensive income as it understands that the items corresponding
to late payment surcharges in the cancellation of sales receivables provide relevant information on the business operations and
operating flows rather than represent the Company’s financial performance and, therefore, as from this fiscal year, they
are disclosed under Other operating income. Management considers that this presentation better reflects the impacts of the operating
cycle, allowing for a unified presentation together with other expenses already disclosed under operating expenses (including
the impairment of receivables), mainly considering the context detailed in Note 1.2, which furthered the delay in payment
terms to generators and hydrocarbon producers.
4.1 New accounting standards, amendments and interpretations issued by the IASB effective as of December 31, 2020 and adopted by the Company The Company has applied the following standards and / or amendments
for the first time as of January 1, 2020:
- Conceptual Framework (issued in March 2018).
- IFRS 3 “Business Combinations” (amended in October 2018).
- IAS 1 “Presentation of Financial Statements” and NIC 8 “Accounting Policies, Changes in Accounting Estimates and errors” (amended in October 2018).
- IFRS 9 “Financial Instruments”, NIC 39 “Financial Instruments: Presentation” and IFRS 7 “Financial Instruments: Disclosures” (amended in September 2019).
- IFRS 16 “Leases” (amended in May 2020) The application of the detailed standards
and amendments did not have any impact on the results of the operations or the financial position of the Company.
4.2 New standards, amendments and interpretations issued by the IASB not yet effective and which have not been early adopted by the Company
- IFRS 17 -“Insurance Contracts”: issued in May 2017 and modified in June 2020. It supersedes IFRS 4, introduced in 2004 as an interim standard, which gave companies dispensation to carry on accounting for insurance contracts using national accounting standards, thus resulting in several application approaches. IFRS 17 sets the principles for the recognition, measurement, presentation and disclosure of information associated with insurance contracts and is applicable as from January 1, 2023, allowing for its early adoption for entities already applying IFRS 9 and IFRS 15. The Company estimates that its application will not have a significant impact on the Company’s operating results or financial position.
- IAS 1 - “Presentation of financial statements”: amended in January and July 2020. It incorporates amendments to the classification of liabilities as current or non-current. Amendments are applicable to fiscal years starting on or after January 1, 2023, allowing for early adoption. Its application will not have a significant impact on the Company’s operating results or financial position.
- IFRS 3 – “Business Combinations”: amended in October 2020. It incorporates references to the definitions of assets and liabilities of the new Conceptual Framework and clarifications associated with contingent assets and liabilities incurred separately from those taken on in a business combination. It applies to business combinations as from January 1, 2022, and allows for its early adoption.
- Annual Improvements to IFRS Standards – 2018-2020 Cycle: amendments were issued in May 2020 and are applicable to annual periods starting as from January 1, 2022. The Company estimates that their application will not have a significant impact on the Company’s operating results or financial position.
- IAS 16 – “Property, Plant and Equipment”: amended in May 2020. It incorporates modifications on the recognition of inventories, sales and costs of items produced while bringing an item of property, plant and equipment to the location and the conditions necessary for it to be capable of operating in the manner intended. Amendments are applicable to fiscal years starting on or after January 1, 2022, allowing for early adoption. The Company is currently analyzing the impact of the application of these modifications in its operating results or financial position.
- IAS 37 – “Provisions, Contingent Liabilities and Contingent Assets”: amended in May 2020. It clarifies the scope of the concept of fulfillment cost of an onerous contract. Amendments are applicable to fiscal years starting on or after January 1, 2022, allowing for early adoption. The Company estimates that its application will not have a significant impact on the Company’s operating results or financial position.
- Amendments to IFRS 9 – “Financial Instruments”, IAS 39 – “Financial instruments: Presentation” and IFRS 7 – “Financial Instruments: Disclosures”, IFRS 4 – “Insurance Contracts” and IFRS 16 – “Leases”: amended in August 2020. It incorporates guidelines for the measurement of financial assets and liabilities at amortized cost affected by the reform in the reference interest rate. Amendments are applicable to fiscal years starting on or after January 1, 2021. The Company is currently analyzing the impact of the application of these modifications in its operating results or financial position.
4.3 Effects of changes in foreign exchange rates 4.3.1 Functional and presentation
currency The information included in these
Consolidated Financial Statements is recorded in U.S. Dollars, which is the Company’s functional currency, that is, the
currency of the primary economic environment where the entity operates. 4.3.2 Foreign-currency transactions
and balances Foreign currency transactions are
translated into the functional currency at the exchange rates prevailing on each transaction date or valuation date, when items
are remeasured. Foreign exchange gains and losses arising on the settlement of monetary items and on translating monetary items
at the closing of the fiscal year using year-end exchange rate are recognized within the financial results in the statement of
comprehensive income, with the exception of capitalized amounts. 4.3.3 Group companies’ translation
into functional currency The results and financial position
of subsidiaries, joint ventures and associates whose functional currency is the Argentine Peso, a currency of a hyperinflationary
economy, are translated into the Company’s functional currency using the year-end exchange rate. The results generated by
the application of IAS 29 adjustment mechanism for hyperinflationary economies, on the opening equity measured in functional currency
are recognized under “Other comprehensive income”. 4.3.4 Classification of Other comprehensive
income within the Company’s equity The Company classifies and directly
accumulates within equity, in the retained earnings line, the results generated by the application of the IAS 29 adjustment mechanism
on the opening retained earnings, while the remaining results are presented in a separate component of equity and accumulated
until the disposal of the foreign operation in “Other comprehensive income”, in accordance with IAS 21.
4.4 Principles of consolidation and equity accounting 4.4.1 Subsidiaries Subsidiaries are all entities over
which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from
its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. The Group cease consolidation of
entities from the date that control ceases. The acquisition method of accounting
is used to account for business combinations by the Group (see Note 4.4.5 below). Intercompany transactions, balances
and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction
provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed when necessary
to ensure consistency with the policies adopted by the Group. Non-controlling interests in the results
and equity of subsidiaries are shown separately in the Consolidated Statement of Comprehensive Income, Consolidated Statement of
Changes in Equity and Consolidated Statement of Financial Position respectively. 4.4.2 Associates Associates are all entities over which
the group has significant influence but not control or joint control. This is generally the case where the Group holds between
20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting (see Note 4.4.4
below), after initially being recognized at cost. 4.4.3 Joint arrangements Investments in joint arrangements
are classified as either joint operations or joint ventures, according IFRS 11 “ Joint Arrangements” 4.4.3.1 Joint operations The Company recognizes its direct
right to the assets, liabilities, incomes and expenses of joint operations and its share of any jointly held or incurred assets,
liabilities, incomes and expenses. These have been incorporated in the Consolidated Financial Statements under the appropriate
headings. 4.4.3.2 Joint ventures Interests in joint ventures are accounted
for using the equity method (see Note 4.4.4 below), after initially being recognized at cost. 4.4.4 Equity Method Under the equity method of accounting,
the investments are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition
profits or losses of the investee in profit or loss, and the Group’s share of movements in other comprehensive income of
the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognized
as a reduction in the carrying amount of the investment. When the Group’s share of losses
in an equity-accounted investment equals or exceeds its interest in the entity, together with any long-term interests that, in
substance, form part of the net investment, the Group does not recognize further losses, unless it has incurred obligations or
made payments on behalf of the other entity. Unrealized gains on transactions between
the Group and its associates and joint ventures are eliminated to the extent of the group’s interest in these entities. Unrealized
losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies
of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group. The carrying amount of equity accounted
investments is tested for impairment in accordance with the policy described below in Note 4.9. 4.4.5 Business combinations The acquisition method of accounting
is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration
transferred for the acquisitions comprises:
(i) the fair value of the transferred assets,
(ii) the liabilities incurred to the former owners of the acquired business,
(iii) the equity interests issued by the group,
(iv) the fair value of any asset or liability resulting from a contingent consideration arrangement, and
(v) the fair value of any pre-existing equity interest in the subsidiary. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.
The group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis at the non-controlling
interest’s proportionate share of the acquired entity’s net identifiable assets. Acquisition-related costs are expensed
as incurred. The value of the goodwill represents the excess of: Where settlement of any part of cash
consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange.
The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained
from an independent financier under comparable terms and conditions. Contingent consideration is classified
either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value
with changes in fair value recognised in profit or loss. If the business combination is achieved
in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured
to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss. The Group has up to 12 months to finalize
the accounting for a business combination. Where the accounting for a business combination is not complete by the end of the year
in which the business combination occurred, the Group reports provisional amounts. 4.4.6 Changes in ownership interests The Group treats transactions with
non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in
ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect
their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and
any consideration paid or received is recognized in “Other reserves” within equity attributable to owners of the Company. When the Group ceases to consolidate
or equity account for an investment because of a loss of control, joint control or significant influence, any retained interest
in the entity is remeasured to its fair value with the change in carrying amount recognized in profit or loss. This fair value
becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint
venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity
are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss. If the ownership interest in a joint
venture or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts
previously recognized in other comprehensive income are reclassified to profit or loss where appropriate.
4.5 Segment reporting Operating segments are reported in
a manner consistent with the internal reporting provided to the Executive committee. The Executive Committee, is the highest
decision-making authority, is the person responsible for allocating resources and setting the performance of the entity’s
operating segments, and has been identified as the person/ body executing the Company’s strategic decisions. In segmentation the Company considers
transactions with third parties and intercompany operations, which are done on internal transfer pricing based on market prices
for each product.
4.6 Property, plant and equipment Property, Plant and Equipment is measured
following the cost model. It is recognized at acquisition cost less depreciation a less any accumulated impairment. Subsequent costs are included in the
asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the group and the cost of the item can be measured reliably. The carrying amount
of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged
to profit or loss during the reporting period in which they are incurred. The cost of work in progress whose
construction will extend over time includes, if applicable, the computation of financial costs accrued on loans granted by third
parties and other pre-production costs, net of any income obtained from the sale of commercially valuable production during the
launching period. Works in progress are valued according
to their degree of progress. Works in progress are recorded at cost less any loss due to impairment, if applicable. Assets’ residual values and
useful lives are reviewed, and adjusted if appropriate, at the end of each year. An asset’s carrying amount is written down
immediately to its recoverable amount if the asset´s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are
determined by comparing the sale price with the carrying amount, stated in terms of the measuring unit current at the disposal
date.
4.6.1 Depreciation methods and useful lives The group depreciates productive wells,
machinery and camps in the oil and gas production areas according to the units of production method, by applying the ratio of oil
and gas produced to estimated proved developed oil and gas reserves. The acquisition cost of property with proved reserves is depreciated
by applying the ratio of oil and gas produced to estimated proved oil and gas reserves. Acquisition costs related to properties
with unproved reserves is valued at cost with recoverability periodically assessed on the basis of geological and engineering estimates
of possible and probable reserves that are expected to be proved over the life of each concession. Machinery and generation equipment
(including any significant identifiable component) are depreciated under the unit of production method. The group´s remaining items of
property, plant and equipment (including any significant identifiable component) are depreciated by the straight-line method based
on estimated useful lives, as detailed below: Buildings: 50 years Vehicles: 5 years Furniture, fittings and
communication equipment: 5- 20 years Computer equipment and software:
3 years Tools: 10 years Gas Plant and Pipeline: 20
years If appropriate, the depreciation method
is reviewed and adjusted at the end of each year. 4.6.2 Asset retirement obligations Estimated future costs of asset retirement
obligations on well abandonment in oil and gas areas and wind turbines decommissioning in wind farms, discounted at a risk adjusted
rate, are capitalized in the cost of the assets and depreciated using the units of production method. Additionally, a liability
at the estimated value of the discounted amounts payable is recognized. Changes in the measurement of asset retirement obligations
that result from changes in the estimated timing, amount of the outflow of resources required to settle the obligation, or the
discount rate, are added to, or deducted from, the cost of the related asset. If a decrease in the liability exceeds the carrying
amount of the asset, the excess is recognized immediately in profit or loss.
4.7 Intangible assets
4.7.1 Goodwill Goodwill is the result of the acquisition
of subsidiaries. Goodwill represents the excess of the acquisition cost over the fair value of the equity interest in the acquired
entity held by the company on the net identifiable assets acquired at the date of acquisition. For impairment testing, goodwill
acquired in a business combination is allocated from the acquisition date to each of the acquirer’s CGU or group of CGUs
that are expected to benefit from the synergies of the combination. Each unit or group of units that goodwill is allocated represents
the lowest level within the entity at which the goodwill is monitored for internal management purposes.
4.7.2 Concession arrangements Concession arrangements corresponding
to Edenor and hydroelectric generation plants Diamante and Nihuiles are not under the scope of the guidelines of IFRIC 12 “Service
Concession Arrangements”. These concession agreements meet
the criteria set forth by the IFRSs for capitalization less depreciation a less any accumulated impairment. They are amortized
following the straight-line method based on each asset’s useful life, which corresponds to the life of each concession agreement.
4.7.3 Identified intangible assets in acquired investments Corresponds to intangible assets
identified at the moment of the acquisition of companies. Identified assets meet the criteria established in IFRS for capitalization
less depreciation a less any accumulated impairment. They are amortized by the straight-line method according to the useful life
of each asset, considering the estimated way in which the benefits produced by the asset will be consumed.
4.8 Assets for oil and gas exploration The Company uses the successful efforts
method of accounting for its oil and gas exploration and production activities. This method involves the capitalization of: (i)
the cost of acquiring properties in oil and gas exploration and production areas; (ii) the cost of drilling and equipping exploratory
wells that result in the discovery of commercially recoverable reserves; (iii) the cost of drilling and equipping development wells,
and (iv) the estimated asset retirement obligations (see Note 4.6.2). According to the successful efforts
method of accounting, exploration costs (including geological and geophysical costs), excluding exploratory well costs, are expensed
during the period in which they are incurred. Drilling costs of exploratory wells are capitalized until it is determined that
proved reserves exists and they justify the commercial development. If reserves are not found, such drilling costs are expensed.
Occasionally, an exploratory well may determine the existence of oil and gas reserves but they cannot be classified as proved
when drilling is complete. In those cases, such costs continue to be capitalized insofar as the well has allowed determining the
existence of sufficient reserves to warrant its completion as a production well and the Company is making sufficient progress
in evaluating the economic and operating feasibility of the project.
4.9 Impairment of non-financial long-lived assets Intangible assets that have an indefinite
useful life and goodwill are not subject to amortization and are tested annually for impairment, or more frequently if events or
changes in circumstances indicate that they might be impaired. The remaining non-financial long-lived
assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purpose of assessing
impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows which are largely independent
of the cash inflows from other assets or groups of assets (CGU). Non-financial long-lived assets,
other than goodwill, that have been impaired are reviewed for possible reversal of the impairment at the end of each reporting
period.
4.10 Financial assets
4.10.1 Classification The Group classifies its financial
assets in the following categories:
(i) those that are subsequently measured at fair value (either through other comprehensive income or through profit or loss), and
(ii) those that are subsequently measured at amortised cost. The classification depends on the
entity’s business model for managing the financial assets and the contractual cash flow characteristics. Gains and losses from financial assets
measured at fair value, will be recorded in the Statement of Comprehensive Income or in Statement of Other Comprehensive Income. Investments in equity instruments
are measured at fair value. For those investments that are not held for trading, the Company may make an irrevocable election at
initial recognition to present subsequent changes in other comprehensive income. The Company's election was to recognize changes
in fair value through profit and loss. The company reclassifies financial
assets when and only when it changes its business model for managing those financial assets.
4.10.2 Recognition The conventional purchases and sales
of financial assets are accounted for at trade date, that is, the date on which the Company undertakes to purchase or sell the
asset, or at settlement date. Financial assets are derecognized when contractual rights to the cash flows from the financial assets
have expired or been transferred, and the Company has substantially transferred all risks and rewards of ownership of the asset.
4.10.3 Measurement At initial recognition, the Group
measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition of the financial asset. A gain or loss on a debt investment
that is subsequently measured at fair value and is not part of a hedging relationship is recognised in profit or loss and disclosed
in “Changes in the fair value of financial instruments” within “Other financial Results. A gain or loss on a
debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship is recognized in profit
or loss when the financial asset is derecognised or impaired and through the amortization process using the effective interest
rate method. The Group subsequently measures equity
investments at fair value. Dividends from such investments continue to be recognized in profit or loss as long as they represent
a return on investment.
4.10.4 Impairment of financial assets The Company assesses the expected
credit losses related to its financial instruments at amortized cost and financial instruments at fair value through other comprehensive
income, if applicable. The Company applies the simplified
approach allowed by IFRS 9 to measure expected credit losses for trade receivables and other receivables with similar risk characteristics.
For this purpose, receivables are grouped by business segment and based on shared credit risk characteristics and expected credit
losses are determined based on rates calculated for different ranges of default days from the due date. The expected loss rates are based
on the sales collection profiles over a period of 24 months before the end of each year, considering historical credit losses experienced
within this period that are adjusted, if applicable, to reflect forward-looking information that could affect the ability of customers
to settle the receivables.
4.10.5 Offsetting of financial instruments Financial assets and liabilities
are offset, and the net amount reported in the consolidated statements of financial position, when there is a legally enforceable
right to offset the recognized amounts, and there is an intention to settle on a net basis, or realize the asset and settle the
liability simultaneously.
4.11 Trade and other receivables Trade receivables and other receivables
are recognized at fair value and subsequently measured at amortized cost, using the effective interest method, less provision for
impairment, if applicable. The Company recognises provisions
for impairment on trade and other receivables based on expected credit loss model described in Note 4.10.4. Trade receivables are
written off when there is no reasonable expectation of recovery. The Company considers the following default indicators: i) voluntary
reorganization proceedings, bankruptcy or initiation of judicial demands; ii) insolvency implying a high impossibility of collection
and iii) past due balances greater than 90 days. Where applicable, allowances for
doubtful tax credits have been recognized based on estimates on their uncollectibility within their statutory limitation period,
taking into consideration the Company’s current business plans.
4.12 Derivative financial instruments and hedging account Derivative financial instruments
are measured at fair value, determined as the amount of cash to be collected or paid to settle the instrument as of the measurement
date, net of any prepayment collected or paid. Fair value of derivative financial instruments traded in active markets is disclosed
based on their quoted market prices and fair value of instruments that are not traded in active markets is determined using different
valuation techniques. Subsequent accounting of changes in fair value depends on whether the derivative is designated as a hedging
instrument and, if so, the nature of the item being hedged. The Company may designate derivative financial instruments in the
following categories:
(i) fair value hedge of recognized assets or liabilities or over firm commitment (fair value hedge);
(ii) cash flow hedges of a particular risk associated with recognized assets and liabilities and highly probable future transactions (cash flow hedges), or
(iii) net investment hedge in foreign operation (net investment hedges). At the beginning of the hedge relationship,
the Group documents the economic relationship between the hedging instruments and the hedged items, even if it is expected that
changes in the cash flows of the hedging instruments offset changes in the cash flows of the hedged items. The Group documents
its objective and risk management strategy to carry out its hedging operations. Changes in the measurement of derivative
financial instruments designated as cash flow hedge, which have been determined as effective, are recognized in equity. The gain
or loss related to the ineffective portion is recognized immediately in profit or loss. Changes in the measurement of derivative
instruments that do not qualify for hedge accounting are recognized in profit or loss. The Company has not formally designated
financial instruments as hedging instruments.
4.13 Inventories This line item includes crude oil
stock, raw materials, work in progress and finished products relating to Petrochemicals and Oil and Gas business segments as well
as materials and spare parts relating to the Generation business segment. Inventories are stated at the lower
of cost or net realizable value. Cost is determined using the weighted average price method. The cost of inventories includes expenditure
incurred in purchases and production and other necessary costs to bring them to their existing location and condition. In case
of manufactured products and production in process, the cost includes a portion of indirect production costs, excluding any idle
capacity (slack). The net realizable value is the estimated
selling price in the ordinary course of business less the estimated cost of completion and the estimated costs to make the sale. The assessment of the recoverable
value of these assets is made at each reporting date, and the resulting loss is recognized in the statement of income when the
inventories are overstated. The Company has classified materials
and spare parts into current and non-current, depending on the timing in which they are expected to be used for replacement or
improvement on existing assets. The portion of materials and spare parts for maintenance or improvements on existing assets, is
exposed under the heading “Property, plant and equipment”.
4.14 Non-current assets (or disposal group) held for sale and discontinued operations Non-current assets are classified
as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing
use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs
to sell, except deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried
at fair value and contractual rights from insurance contracts, which are specifically exempt from this requirement. An impairment loss is recognised for
any initial or subsequent write-down of the asset until fair value less costs to sell. A gain is recognised for any subsequent
increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss
previously recognised. The gain or loss not previously recognised by the date of the sale of the non-current asset is recognised
at the date of derecognition. Non-current assets (including those
that are part of a disposal group) are not depreciated or amortized while they be classified as held for sale. Interest and other
expenses attributable to the liabilities of a disposal group classified as held for sale

5. GROUP STRUCTURE

5. GROUP STRUCTURE12 Months Ended
Dec. 31, 2020
Group Structure
GROUP STRUCTURENOTE
5
5.1 Corporate reorganizations The
following corporate reorganizations are part of the strategy the Company has been developing since 2017 to attain a simpler and
more agile, innovative and flexible organization, allowing it to derive important benefits, a higher operating efficiency, an
optimized use of available resources, the streamlining of technical, administrative and financial structures, and the implementation
of converging policies, strategies and goals. They also allow the Company to leverage the complementarity among the participating
companies, thus reducing costs resulting from the duplication and overlapping of operating and administrative structures. The
following reorganizations were perfected by means of a merger through absorption process, under
the terms of tax neutrality pursuant to articles 80 and following of the Income Tax Law, In
2019, the Company’s Board of Directors approved the process for the merger through absorption between the Company, as absorbing
company, and PEFM, as absorbed company, establishing July 1, 2019 as the actual merger date, as from which all PEFM’s rights
and obligations, assets and liabilities were incorporated into the Company’s equity. There was no exchange ratio as the
Company directly and indirectly held 100% of PEFM’s capital stock. On October 15, 2019 and February 19, 2020, the respective
Shareholders’ Meetings approved the merger process, and the CNV granted its administrative consent, respectively. In
2020, the Company’s Board of Directors approved the following mergers through absorption between the Company, as absorbing
company, and the following companies, as absorbed companies:
(i) CPB; actual merger
date: January 1, 2020.
(ii) PACOGEN and PHA,
establishing April 1, 2020 as the actual merger date, as from which the Company became simultaneously the beneficiary, remainder
beneficiary and trustee under the CIESA Trust. On March 24, 2020, the Trustee transferred to PHA all common shares in book-entry
form with a face value of $ 1 each and each granting the right to one vote issued by CIESA and held by the CIESA Trust, which
represented 40% of CIESA’s capital stock and voting rights. Until all expenses and taxes associated with the transfer
of the Trust Estate have been canceled, the CIESA Trust will remain in effect, with the Trustee maintaining such capacity,
and the Company will assume all payment obligations for the applicable taxes and expenses resulting from the transfer of the
Trust Estate.
(iii) PP, Transelec, Pampa
FPK, Pampa Holding, Pampa Ventures and Pampa QRP; actual merger date: October 1, 2020. As
from the actual merger date, all the rights and obligations, assets and liabilities of the absorbed companies were incorporated
into the Company’s equity, without any exchange ratios, as the Company directly and indirectly held 100% of the absorbed
companies’ capital stock, with the exception of Pampa Holding, Pampa QRP, Pampa FPK and Pampa Ventures, where the valuation
of the underlying asset was taken into consideration to establish the exchange ratio for each company. These
mergers were approved by the respective Extraordinary Shareholders’ Meetings, and their registration with the Public Registry
is still pending as this proceeding was affected by the impediments inherent in functioning of enforcement agencies during the
COVID-19 pandemic.
5.2 Sale of participations and property, plant
and equipment 5.2.1
Sale of interest in Oldelval On
November 2, 2018, the Company entered into an agreement with ExxonMobil Exploration Argentina S.R.L. for the sale of 21% of Oldelval’s
capital stock and rights, maintaining the remaining 2.1% interest. Subsequently,
on November 27, 2018, the transaction was closed upon the meeting of the applicable precedent conditions, the purchase price paid
by the purchaser amounted to US$ 36.4 million. As a result of the transaction, the Company has recognized a US$ 28 million gain,
before taxes. 5.2.2
Sale of the Dock Sud storage terminal On
March 6, 2019, the Company agreed with Raízen Argentina, a licensee of the Shell brand, on the sale, subject to the meeting
of certain conditions precedent which are customary for this kind of transactions, of the Dock Sud storage terminal, which tank
yard has a total installed capacity of 228 thousand m3. On
March 30, 2019, after the meeting of all precedent conditions, the transfer of the Dock Sud Terminal to the purchaser was completed
at a price of US$ 19.5 million, plus US$ 2 million on account of products. The transaction resulted in profits before income tax
in the amount of US$ 1 million, which are disclosed in item “Gains/losses on the sale of Property, plant and equipment”
under “Other operating income”.
5.3 Assets held for sale, associated liabilities
and discontinued operations As
of December 31, 2020, 2019 and 2018, the results for operations associated with the below-detailed sales transactions have been
disclosed under “Discontinued operations” in the consolidated statement of comprehensive income. 5.3.1
Divestment of stake in Edenor On
December 28, 2020, the Company entered into with Empresa de Energía del Cono Sur S.A. and Integra Capital S.A., Daniel Eduardo
Vila, Mauricio Filiberti and José Luis Manzano (the “Purchaser”) a share purchase agreement whereby it agreed
to sell its controlling interest in Edenor through the transfer of all Class A shares representing 51% of the capital stock and
voting rights of said company (the “Transaction”). The closing of the Transaction (the “Closing”) is subject
to the fulfillment of certain precedent conditions. On February 17, 2021, Pampa’s shareholders meeting was held and the
Transaction was approved, remaining outstanding, as of the date of issue of these Consolidated Financial Statements, the approval
by the ENRE still being pending. The
sale of the stake in Edenor is part of the Company’s strategic plan aiming to focus investments on its core businesses:
continuing expanding the installed capacity for the generation of electricity and the development of unconventional natural gas
reserves, specifically, the investments necessary to reach the committed production under the Gas.Ar Plan (see Note 2.3.2.1.2)
and the closing to Combined Cycle at CTB (see Note 16.1.3). The
agreed sales price consists of: (i) 21,876,856 Class B shares of Edenor representing 2.41% of the capital stock and voting rights
of Edenor (the “Price in Kind”); (ii) US$ 95 million (the “Price in Cash”); and (iii) a contingent payment
of 50% of the earnings resulting from a change in control of the Purchaser or Edenor (the “Contingent Payment”), in
case this situation takes place within the first year after the Closing, or the term during which the Price Balance (as defined
in the following paragraph) is pending settlement, whichever is later. The
Price in Kind was paid upon the execution of the share purchase agreement and the Price in Cash will be paid in 3 installments
as follows: (i) the first installment, in the amount of US$ 5 million, upon the execution of the share purchase agreement; (ii)
the second installment, in the amount of US$ 50 million, on the Closing date, subject to the fulfillment of certain precedent
conditions; and (iii) the third installment, in the amount of US$ 40 million, one year after the Closing date, except in
cases of offsetting or prepayment (the “Price Balance”). The Price Balance will accrue interest at a 10% annual nominal
fixed rate as from the Closing date, payable on a quarterly basis. Within
the previously described framework and pursuant to IFRS 5, and considering that the Transaction would involve loss of control
over the subsidiary, all Edenor’s assets and liabilities have been classified as held for sale as of December 31, 2020 and
have been measured at the lower between its fair value, net of costs associated with the sale, if applicable, and its book value,
which involved the recognition of an impairment loss for US$ 589 million, which was disclosed together with the results corresponding
the Electricity distribution segment under “Discontinued operations” of the statement of comprehensive income. The
Transaction does not include the transfer of Class B shares; therefore, after the Closing, the Company will keep a 4.1% stake
in Edenor’s capital stock and voting rights (this stake includes the Price in Kind). 5.3.2
Sale of PELSA shares and certain oil areas On
January 16, 2018, the Company agreed to sell to Vista Oil & Gas S.A.B. de C.V. (“Vista”) its direct 58.88% interest
in PELSA and its direct interests in the Entre Lomas, Bajada del Palo, Agua Amarga and Medanito-Jagüel de los Machos blocks,
in line with the Company's strategy to focus its investments and human resources both on the expansion of its power generation
installed capacity and on the exploration and production of natural gas, placing a special focus on the development and exploitation
of unconventional gas reserves. On
April 4, 2018, upon the meeting of all applicable conditions precedent, the transaction was closed. The price paid by Vista, considering
the agreed adjustments regarding interests in PELSA, amounted to US$ 389 million. This transaction generated a profit
comprehensive income net of taxes in the amount of US$ 30 million, as follows:
12.31.2018
Sale price (2) 270
Book value of assets sold and costs associated
with the transaction (226)
Result for sale 44
Interests (1) 4
Income
tax (22)
Imputed in results 26
Other
comprehensive income (loss)
Reclasification exchange differences on translation 6
Income
tax (2)
Imputed
in Other comprehensive income 4
Total
comprehensive income 30
(1) Are exposed in "Financial
income" in the consolidated statement of comprehensive income related to discontinued operations.
(2) Sale price recorded
as of December 31, 2018 arises from the Consolidated Financial Statements denominated in pesos in accordance with IAS 29,
and was translated into U.S. Dollars using the exchange rate as of that date. 5.3.3
Sale of assets in the Refining and Distribution segment On
December 7, 2017, the Company executed with Trafigura Ventures B.V and Trafigura Argentina S.A. an agreement for the sale of certain
assets in the Company’s refining and distribution segment based on the conviction that the oil refining and distribution
business calls for a larger scale to attain sustainability. The
assets subject-matter of the transaction were: (i) the Ricardo Eliçabe refinery; (ii) the Avellaneda lubricants plant; (iii)
the Caleta Paula reception and dispatch plant; and (iv) the network of gas stations currently operated under Petrobras branding.
The Dock Sud storage facility was excluded from the sale, as well as the Company's investment in Refinería del Norte S.A. Pursuant
to the foregoing, and in relation with the measurement of the assets and liabilities subject to this transaction at
the lower of fair value less cost to sell and the carrying value, as of December 31, 2017, the Company recognized an
impairment of Intangible assets and Property, plant and equipment in the amount of US$ On
May 9, 2018, upon the meeting of all applicable precedent conditions the transaction was subject to, the closing of the sale to
Trafigura was carried out. After applying the adjustments stipulated in the purchase and sale agreement, the transaction price
amounted to US$ 124.5 million. Furthermore, after the closing of the transaction, Trafigura paid to Pampa US$ 56 million
for the purchase of crude oil. As
of December 31, 2018, the closing of the transaction did not generate additional profits or losses, according to the following
detail:
12.31.2018
Sale price (1) 28
Book value of assets sold and costs associated
with the transaction (28)
Result for sale -
(1) Sale price recorded
as of December 31, 2018 arises from the Consolidated Financial Statements denominated in pesos in accordance with IAS 29,
and was translated into U.S. Dollars using the exchange rate as of that date. 5.3.4
Relevant information on discontinued operations As
of December 31, 2020, 2019 and 2018
12.31.2020 12.31.2019 12.31.2018
Distribution Distribution Distribution Oil
and gas Refining
and distribution Eliminations Total
Revenue 1,085 1,502 1,484 66 422 (90) 1,882
Cost
of sales (926) (1,225) (1,136) (33) (361) 91 (1,439)
Gross
profit 159 277 348 33 61 1 443
Selling
expenses (129) (122) (134) (2) (33) - (169)
Administrative
expenses (64) (65) (76) (1) (4) - (81)
Other
operating income 29 19 16 1 6 - 23
Other
operating expenses (25) (43) (44) (6) (10) - (60)
Impairment
of property, plant and equipment and intangible assets (589) - - - - - -
Result
from the sale of share of profit and property, plant and equipment - - - 44 - - 44
Agreement
on the regularization of obligations 285 - - - - -
Operating
income (loss) (619) 351 110 69 20 1 200
Gain
on monetary position, net 115 187 226 7 2 (1) 234
Finance
income 1 11 11 4 1 - 16
Finance
costs (110) (112) (132) (1) - - (133)
Other
financial results (20) (62) (50) (4) 22 - (32)
Financial
results, net (14) 24 55 6 25 (1) 85
(loss)
Income before income tax (633) 375 165 75 45 - 285
Income
tax 41 (178) (49) (26) (14) - (89)
(Loss)
Profit of the year from discontinued operations (592) 197 116 49 31 - 196
12.31.2020 12.31.2019 12.31.2018
Distribution Distribution Distribution Oil
and gas Refining
and distribution Eliminations Total
Other
comprehensive income (loss)
Items
that will not be reclassified to profit or loss
Results
related to defined benefit plans 1 - - - - - -
Income
tax - - - (2) - - (2)
Exchange
differences on translation (15) (15) - 4 - - 4
Items
that may be reclassified to profit or loss
Exchange
differences on translation (19) (13) - 6 - - 6
Other
comprehensive (loss) income of the year from discontinued operations (33) (28) - 8 - - 8
Total
comprehensive (loss) income of the year from discontinued operations (625) 169 116 57 31 - 204
Total
(loss) income of the year from discontinued operations attributable to:
Owners
of the company (499) 98 61 47 31 - 139
Non
- controlling interest (93) 99 55 2 - - 57
(592) 197 116 49 31 - 196
Total
comprehensive (loss) income of the year from discontinued operations attributable to:
Owners
of the company (517) 84 61 53 31 - 145
Non
- controlling interest (108) 85 55 4 - - 59
(625) 169 116 57 31 - 204 As
of December 31, 2020, the assets and liabilities that comprise the assets held for sale and associated liabilities are :
12.31.2020
ASSETS
NON-CURRENT
ASSETS
Property,
plant and equipment 1,185
Right-of-use
assets 3
Financial
assets at amortized cost 3
Trade
and other receivables 1
Total
non-current assets 1,192
Inventories 22
Financial
assets at amortized cost 1
Financial
assets at fair value through profit and loss 26
Trade
and other receivables 176
Cash
and cash equivalents 52
Total
current assets 277
Assets
classified as held for sale 1,469
LIABILITIES
NON-CURRENT
LIABILITIES
Provisions 29
Deferred
revenue 17
Deferred
tax liabilities 282
Defined
benefit plans 9
Salaries
and social security payable 4
Borrowings 98
Trade
and other payables 81
Total
non-current liabilities 520
CURRENT
LIABILITIES
Provisions 4
Taxes
payables 21
Defined
benefit plans 1
Salaries
and social security payable 44
Borrowings 2
Trade
and other payables 429
Total
current liabilities 501
Liabilities
associated to assets classified as held for sale 1,021 The
consolidated statement of cash flows related to discontinued operations is presented below:
12.31.2020 12.31.2019 12.31.2018
Net
cash generated by operating activities 211 170 224
Net
cash used in investing activities (86) (86) (221)
Net
cash used in financing activities (73) (85) (13)
Increase
(decrease) in cash and cash equivalents from discontinued operations 52 (1) (10)
Cash
and cash equivalents at the begining of the year 9 1 10
Effect
of devaluation and inflation on cash and cash equivalents (8) 9 1
Increase
(decrease) in cash and cash equivalents 52 (1) (10)
Cash
and cash equivalents at the end of the year 53 9 1
5.4 Interest in subsidiaries, associates and
joint ventures 5.4.1
Subsidiaries information Unless
otherwise indicated, the capital stock of the subsidiaries consists of common shares, each granting the right to one vote. The
country of the registered office is also the principal place where the subsidiary develops its activities.
12.31.2020 12.31.2019
Company Country Main
activity Direct
and indirect participation % Direct
and indirect participation %
Corod Venezuela Oil 100.00% 100.00%
CPB
(1) Argentina Generation - 100.00%
CPB
Energía S.A. Argentina Generation 100.00% 100.00%
EcuadorTLC Ecuador Oil 100.00% 100.00%
Edenor
(2) Argentina Distribution
of energy 57.12% 56.32%
EISA Uruguay Investment 100.00% -
Enecor
S.A. Argentina Transportation
of electricity 69.99% 69.99%
HIDISA Argentina Generation 61.00% 61.00%
HINISA Argentina Generation 52.04% 52.04%
PACOSA Argentina Trader 100.00% 100.00%
PEB Bolivia Investment 100.00% 100.00%
PACOGEN
(1) Argentina Investment - 100.00%
PE
Energía Ecuador LTD Gran
Cayman Investment 100.00% 100.00%
Energía
Operaciones ENOPSA S.A. Ecuador Oil 100.00% 100.00%
Petrolera
San Carlos S.A. Venezuela Oil 100.00% 100.00%
PHA
(1) Argentina Investment - 100.00%
PISA Uruguay Investment 100.00% 100.00%
PP
(1) Argentina Investment - 100.00%
TGU Uruguay Gas
transportation 100.00% 100.00%
Transelec
(1) Argentina Investment - 100.00%
Trenerec
Energía Bolivia S.A. (3) Bolivia Investment - 100.00%
Trenerec
S.A. Ecuador Investment 100.00% 100.00%
(1) Merged companies.
See Note 5.1.
(2) Corresponds to effective
ownership interest in Edenor after consider treasury shares (55.14% nominal interest). See Note 5.3.1.
(3) Company liquidated
in October 2020.
5.4.2 Investments
in associates and joint ventures The
following table presents the main activity and financial information used for valuation and percentages of participation in associates
and joint ventures:
Information
about the issuer
Main
activity Date Share
capital Profit
(loss) of the period / year Equity Direct
and indirect participation %
Associates
Refinor Refinery 09.30.2020 1 (8) 57 28.50%
OCP Investment 12.31.2020 100 (27) 73 15.91%
TGS
(1) Transport
of gas 12.31.2020 9 39 785 2.093%
Joint
ventures
CIESA
(1) Investment 12.31.2020 8 25 401 50.00%
Citelec
(2) Investment 12.31.2020 7 26 171 50.00%
Greenwind Generation 12.31.2020 - 5 (6) 50.00%
CTB Investment 12.31.2020 7 129 356 50.00%
(1) The Company holds
a direct and indirect interest of 2.093% in TGS and 50% in CIESA, a company that holds a 51% interest in the share capital
of TGS. therefore, additionally the Company has an indirect participation of 25.50% in TGS. As of December 31, 2020, the quotation
of TGS's ordinary shares and ADR published on the BCBA and the NYSE was $ 153,15 and US$ 5.20, respectively, granting to Pampa
(direct and indirect) ownership an approximate stake market value of US$ 399 million.
(2) Through a 50% interest,
the company joint controls Citelec, company that controlled Transener with 52.65% of the shares and votes. As a result, the
Company has an indirect participation of 26.33% in Transener. The
details of the balances of investments in associates and joint ventures are as follows:
12.31.2020 12.31.2019
Disclosed
in non-current assets
Associates
Refinor 19 20
OCP 2 33
TGS 25 21
46 74
Joint
ventures
CIESA 240 235
Citelec 85 88
CTB 178 114
503 437
549 511
Disclosed
in non-current liabilities
Greenwind
(1) (2) (4)
(2) (4)
(1) The company receives
financial assistance from partners. The
following tables show the breakdown of the result from investments in associates and joint ventures:
12.31.2020 12.31.2019 12.31.2018
Associates
Oldelval - - 3
Refinor
(2) (3) (4)
OCP (5) 21 34
TGS 1 1 -
(6) 19 33
Joint
ventures
CIESA 11 50 75
CTB 64 13 -
Citelec
13 19 21
Greenwind 3 - (11)
91 82 85
85 101 118 The
evolution of investments in associates and joint ventures is as follows:
12.31.2020 12.31.2019 12.31.2018
At
the beginning of the year 507 403 315
Compensation (5) (16) -
Dividends (34) (75) (19)
Decreases - - (10)
Increases
(1) 3 108 -
Share
of profit 85 101 118
Other
comprehensive income (loss) - - (1)
Exchange
differences on translation (9) (14) -
At
the end of the year 547 507 403 (1)
In 2020, corresponds to the acquisition
of TGS’ shares and in 2019, corresponding mainly to the financial receivable with OCP acquired under the transaction with
AGIP (see Note 5.3.6.2) and capital contributions to CTB. 5.4.3
Investment in CIESA-TGS 5.4.3.1
Impairment of non-financial assets in As
regards COVID-19 and the Government measures to contain its spread, TGS has mainly identified the following impacts: (i) delays
in collections associated with the natural gas transportation business, where, although a recent improvement has been experienced,
it cannot be guaranteed that this situation will be maintained over time, due to the suspension of public utility disconnections
for non-payment and the implementation of several measures aiming to sustain the income of the most impacted economic sectors;
and (ii) a scenario of high volatility in benchmark international prices for the liquid fuels produced and sold by TGS. In
this sense, TGS has assessed the impairment indicators under IAS 36 and has performed recoverable amount tests on the assets included
in Property, plant and equipment. As of December 31, 2020, the assessment of recoverability of the CGU of the Natural Gas Transportation
business resulted in the recognition of impairment losses for $ 3,114 million (before taxes). 5.4.3.2
Issuance of Corporate Bonds TGS
General Shareholders' Meeting held on August 15, 2019 approved the extension of TGS´s Corporate Bonds Program from US$ 700
million to US$ 1.2 billion. This extension was authorized on October 9, 2019, by the CNV. Funds
obtained by TGS are applied to: (i) the repurchase of its Class 1 corporate bonds for US$ 87 million; (ii) the cancellation and
total redemption of Class 1 CBs for US$ 121 million; and (iii) use the balance of net funds to make investments in capital expenditures
in process of execution. 5.4.3.3
Acquisition of own shares in TGS During
fiscal year 2019, TGS’s Board of Directors approved three share buyback programs on March 27, August 26 and November 19,
which were executed in accordance with the conditions stipulated in each of them. On defining these programs, the Board of Directors
took into consideration TGS’s strong cash position and approved them in view of the distortion existing between TGS’s
economic value, measured by its current businesses and derived from ongoing projects, and its stock market listing price. Own
shares acquired by TGS as of October 31, 2019 were destined to the payment of a stock dividend. On
March 6, 2020, TGS’s Board of Directors approved the sixth Share Buyback Program for a maximum investment amount of $ 2,500
million (values effective as of its creation date). Later
on, on August 21, 2020, TGS’s Board of Directors approved a new Share Buyback Program for a maximum investment amount of
$ 3,000 million (values effective as of its creation date), which will be effective until March 22, 2021. 5.4.3.4
Acquisition of TGS’s ADRs by the Company During
the fiscal years ended December 31, 2020 and 2019, the Company acquired a total number of 635.380 ADRs and 1,130,365 TGS’s
ADRs, at an acquisition cost of US$ 3 million and US$ 8 million, respectively. 5.4.4
Investment in CITELEC 5.4.4.1
Employee Shareholding Program – Transba S.A. In
the year 1997, the Executive Branch of the Province of Buenos Aires awarded 100% of Transba’s Series “A”, “B”
and “C” shares to Transener. Series “C” shares were awarded subject to the obligation to transfer them
to the Employee Shareholding Program benefiting certain Transba employees, Transener holding 89.99% of Transba’s capital
stock. On
June 28, 2019, Transener acquired all the shares under such program. Consequently, Transener holds 99.99% of Transba’s capital
stock. 5.4.4.2
Repurchase of own Corporate Bonds - Transener As
of December 31, 2020 Transener’s Corporate Bonds Class 2 amounted to US$ 98.5 million, of which US$ 7 million have been
acquired and by Transba. During the month of January 2021, Transba acquired an additional US$ 5.5 million 5.4.4.3
Acquisition of Transener’s CBs by the Company During
the fiscal year ended December 31, 2020, the Company acquired a total of US$ 1.3 million FV of Transener’s 2021 Class 2
CBs. 5.4.5
Investment in CTB 5.4.5.1
Acquisition of CTEB On
May 29, 2019, the Company, through subsidiaries, after filing a joint offer with YPF, received a notification from IEASA whereby
were awarded National and International Public Tender No. 02/2019, launched pursuant to SGE Resolution No. 160/19, regarding the
sale and transfer by IEASA of CTEB. The acquisition of CTEB also involves the assignment in favor of the awardee of the contractual
capacity as trustor under the Enarsa-Barragán Financial Trust, the VRDs of which (excluding the VRDs to be acquired by the
awardee) amount to US$ 229 million. CTEB,
which is located at the petrochemical complex of the town of Ensenada, Province of Buenos Aires, consists of two open-cycle gas
turbines, and has a 567 MW installed capacity. The
awardee will have to obtain the commissioning of the closing of the combined cycle within a term of 30 months as from the
Seventh Amendment to the Trust Agreement’s effective date, thus increasing the installed power capacity to 847 MW, with
an estimated investment of US$ 200 million. Both
the open and the closed cycle have effective power purchase agreements with CAMMESA under Resolution No. 220/07 issued by the
former SE: the first one, entered into on March 26, 2009 and terminating on April 27, 2022, as amended and modified from time
to time, and the second one dated March 26, 2013 for a term of 10 years as from the commercial operation of the combined cycle. On
June 26, 2019, the acquisition by CTB, a company co-controlled by YPF and Pampa, through subsidiaries, of CTEB transferred by
IEASA was completed. The acquisition’s relative price was US$ 282 million, an amount which includes the final (cash)
amount offered in the Tender and the acquired VRDs’ purchase price, paid with a contribution of US$ 200 million received
by CTB, settled in equal parts by its co-controlling companies, and with a loan received by CTB from a bank syndicate of US$ 170
million. The
Power Plant will be managed and operated by Pampa and YPF on a rotational basis over 4-year periods. Pampa will be responsible
for managing CTEB’s operations until 2023. And YPF, through its subsidiary YPF Energía Eléctrica S.A., will supervise
the necessary works for the closing of the combined cycle. The
following table details the consideration transferred and the fair value of the assets acquired and the liabilities assumed by
CTB as of June 26, 2019:
in
million US$
Total
consideration transferred (1) (272)
Financial
assets at fair value 16
Property,
plant and equipment 477
Inventories 8
VRDs (229)
Fair
value of net assets 272
(1) Includes US$ 53
million for the purchase of the acquired VRDs and considers a US$ 10 million of a price adjustment in favor of CTB. The
fair value of property, plant and equipment items and inventories was calculated considering mainly the depreciated replacement
cost of the acquired goods. For this purpose, CTB was assisted by an independent specialist engaged by management. The
replacement cost approach was applied to measure buildings, equipment, installations and works in progress. The methodology applied
to determine their fair value entailed:
(i) the calculation
of replacement costs (mainly based on consultations with suppliers and the analysis of specialized publications and information),
(ii) an estimate of residual
values at the end of their useful life (based on the interest generated by the asset at the end of its useful life and the
owner’s disposal policy), and
(iii) the application
of deductions for physical, functional and/or economic impairment, if applicable. The
methodology for the determination of the remaining useful life was focused on the analysis of aging, wear and loss of service
capacity of the assets resulting from normal use in the activities where they operate. Regarding
the work in progress for the closing of the combined cycle, which will allow a 280 MW rated power capacity increase, an estimate
of the work progress’ percentage and the depreciation of the installed equipment was made based on physical inspections
and the information supplied by the contracts to complete civil and electromechanical works for the closing of the combined cycle. Lastly,
a comparative sales approach was used to measure lands and vehicles. For this purpose relevant market data was gathered, mainly
sales prices of lands in surrounding areas and published sales prices for vehicles. Additionally,
CTB has calculated the weighted present value of future cash flows it expects to receive from the assets to confirm that its fair
value does not exceed their recoverable value. As
a result of the described process, CTB has not recorded intangible assets associated with the business acquisition. 5.4.5.2
Financial Trust Agreement As
a result of the award of CTEB’s goodwill, certain amendments were made to the Enarsa-Barragán Financial Trust Agreement
entered into between BICE Fideicomisos S.A. (Nación Fideicomisos S.A.’ continuing company), acting as Trustee, and
CTB, in its capacity as Trustor substituting IEASA (former ENARSA) (the “Trust Agreement” or the “Trust”). Under
the Trust, on April 25, 2011 publicly traded Series B VRDs for a face value of US$ 582,920,167 were issued. The Trust’s
underlying flow is made up of the collection rights resulting from the Power Supply Agreements originally entered into between
ENARSA (currently IEASA) and CAMMESA. On
June 26, 2019, date on which the sale of CTEB’s goodwill was perfected, the following operations and contractual amendments
were executed: -
IEASA and BICE Fideicomisos S.A. entered into the fifth amendment to the Trust Agreement, which mainly included the following
modifications:
(i) the flow assignment
to the Trust is reduced up to an amount equivalent to debt services plus the Trust expenses monthly disclosed by the Trustee
to CAMMESA (previously, 90% of the monthly fixed charge for hired power capacity, for 23,255 US$/MW-month plus VAT, was assigned);
(ii) a total or partial
early redemption option in favor of the Trustor, at the debt’s residual value;
(iii) the surety timely
issued by the National Treasury is canceled; and
(iv) the endorsement
of the insurance against all operating risks in CTEB regarding the loss of benefits in favor of the Trust is required, among
others. -
IEASA assigned its contractual position to CTB through the execution of a Contractual Position Assignment Agreement and, as a
result, BICE Fideicomisos S.A. and CTB executed the sixth amendment to the Trust Agreement whereby CTB was incorporated as a Trustor
under the Trust Agreement. -
CTB and IEASA entered into a VRD transfer agreement whereby CTB acquired the outstanding Series B VRDs for a price of US$ 53.5
million (equivalent to 109,628,836 VRDs with a face value of US$ 1 each), thus becoming the holder of such VRDs (the “Trustor’s
VRDs”). On
August 22, 2019, CTB and BICE Fideicomisos S.A., entered into the seventh amendment to the Trust Agreement, which incorporated,
among others, the following amendments:
(i) as regards the VRDs:
i) the granting of a 24-month grace period (during which only interest will be payable); ii) the modification of the interest
rate by the Libor rate plus 6.5%; iii) the determination of principal amortization installments over a 60-month repayment
period (to provide constant debt services);
(ii) the assignment to
the Trust of the Steam Turbine Supply Agreement, integrating Collection Rights and the Trust Estate;
(iii) the obligation to
complete CTEB’s closing to combined cycle to be commissioned within a term of 30 months as from the entry into effect
of the seventh amendment, establishing that the breach of this obligation will be a ground for the acceleration of the VRDs;
(iv) the incorporation
of additional collection rights for both the open and the closed-cycle Supply Agreements;
(v) the assignment to
the Financial Trust of the collection rights net of VAT for a certain percentage to cover debt services and other items provided
for in Section 8.3.1. of the Trust Agreement, stipulating that any remaining balance on each Service Payment Date (pursuant
to the definition of this term in the Trust Agreement) will be transferred to the Trustor;
(vi) establishing the
simultaneous collection for collection rights assigned to the Trust and for amounts unassigned under the Supply Agreements
(pursuant to the definit

6. RISKS

6. RISKS12 Months Ended
Dec. 31, 2020
Risks
RISKSNOTE
6 6.1
Critical accounting estimates and judgments The
preparation of financial statements requires the Company’s Management to make future estimates and assessments, to apply
critical judgment and to establish assumptions affecting the application of accounting policies and the amounts of disclosed assets
and liabilities, income and expenses. The
applied estimates and accounting judgments are evaluated on a continuous basis and are based on past experiences and other reasonable
factors under the existing circumstances. Actual future results might differ from the estimates and evaluations made at the date
of preparation of these Consolidated Financial Statements. The estimates which have a significant risk of producing adjustments
on the amounts of the assets and liabilities during the following year are detailed below: 6.1.1
Impairment of non-financial long-lived assets Non-financial
long-lived assets, including identifiable intangible assets and right-of-use assets, are reviewed for impairment at the lowest
level for which there are separately identifiable cash flows (CGU). For this purpose, each assets group with independent cash
flows, each subsidiary, associate and each jointly controlled company has been considered a single CGU, as all of their assets
jointly contribute to the generation of cash inflows, which are derived from a single service or product; thus cash inflows cannot
be attributed to individual assets. In
order to evaluate if there is evidence that a CGU could be affected, both external and internal sources of information are analyzed.
Specific facts and circumstances are considered, which generally include the discount rate used in the estimates of the future
cash flows of each CGU and the business condition as regards economic and market factors, such as the cost of raw materials, oil
and gas, international petrochemical product’s price, the regulatory framework for the energy industry, the projected capital
investments and the evolution of the energy demand. The
value in use of each CGU is estimated on the basis of the present value of future net cash flows expected to be derived on the
UGE. Management uses approved budgets up to one year as the base for cash flow projections that are later extrapolated into a
term consistent with the assets’ remaining useful life, taking into consideration the appropriate discount rates. The discount
rates used to discount future net cash flows is the WACC, for each asset or CGU a specific WACC was determined which considered
the business segment and the country conditions where the operations are performed. In order to calculate the fair value less
the costs of disposal, the Company Management uses the estimated value of the future cash flows that a market participant could
generate from the appropriate CGU, less the necessary costs to carry out the sale of the corresponding CGU. The
Company Management is required to make judgments at the moment of the future cash flow estimation. The actual cash flows and the
values may differ significantly from the expected future cash flows and the related values obtained through discount techniques. 6.1.2
Current and deferred Income tax The
Company’s Management periodically evaluates tax treatments affecting the determination of taxable profit regarding uncertain
tax treatment under tax law considering the acceptability of a particular tax treatment by the relevant taxation authority, and,
if applicable, recognizes tax provisions to reflect the effect of the uncertainty for each tax treatment based on the amount estimated
to be paid to the tax authorities. If
the final tax resolution regarding uncertain tax treatments differs from recognized figures, such differences will have an effect
on income tax and deferred income tax at the year of such determination. Deferred
tax assets are reviewed at each reporting date and reduced in accordance with the probability that the sufficient taxable base
will be available to allow for the total or partial recovery of these assets. In assessing the recoverability of deferred tax
assets, Management considers if it is likely that a portion or all of the deferred tax assets will not be realized. The ultimate
realization of deferred tax assets depends on the generation of future taxable income in the periods in which these temporary
differences become deductible. To make this assessment, Management takes into consideration the scheduled reversal of deferred
tax liabilities, the projections of future taxable income and tax planning strategies. The
generation of future taxable profits may differ from those estimated affecting the deductibility of deferred tax assets. 6.1.3
Provision for contingencies The
Company is subject to various claims, lawsuits and other legal proceedings that arise during the ordinary course of its business.
The Company’s liabilities with respect to such claims, lawsuits and other legal proceedings cannot be estimated with certainty.
Periodically, the Company reviews the status of each contingency and assesses potential financial liability, applying the criteria
indicated in Note 4.22, for which elaborates the estimates mainly with the assistance of legal advisors, based on information
available to the Management at Consolidated Financial Statements date, and taking into account our litigation and resolution/settlement
strategies. Contingencies
include outstanding lawsuits or claims for possible damages to third parties in the ordinary course of the Company’s business,
as well as third party claims arising from disputes concerning the interpretation of legislation. The
Company evaluates whether there would be additional expenses directly associated with the ultimate resolution of each contingency,
which will be included in the provision if they may be reasonably estimated. The
final resolutions of the litigation could differ from Management's estimates, generating current provisions to be inadequate,
which could have a material adverse effect on the statement of financial position, comprehensive income, changes in equity and
cash flows. 6.1.4
Asset retirement obligations Asset
retirement obligations in oil and gas areas after completion of operations require the Company’s Management to estimate
the number of wells, long-term well abandonment costs and the time remaining until abandonment. In
the same way, the obligations related to the decommissioning of wind turbines in wind farms require the Company’s Management
to estimate long-term dismantling costs and the time remaining until the dismantling. Technology,
costs and political, environmental and safety considerations constantly change and may result in differences between actual future
costs and estimates. Asset
retirement obligations’ estimates are adjusted at least once a year or more frequently if there are changes in the assumptions
considered in the assessment. 6.1.5
Impairment of financial assets The
Group is exposed to losses for uncollectible receivables. The Company Management estimates the final collectability of the accounts
receivable. The
accounting of expected credit losses for trade receivables and other receivables with similar risk characteristics is based on
the Company's best estimate of the default risk and the calculation of the expected credit losses rates, based on historical information
of the behavior of the Company's clients, current market conditions and forward-looking estimates at the end of each reporting
period. In
order to estimate collections related to the sale of gas and energy (in the spot market), the Company mainly considers CAMMESA’s
capacity to meet its payment obligations to generators and the resolutions issued by the SE, which allow the Company to collect
its receivables from CAMMESA through different mechanisms. Future
adjustments to the allowance may be necessary if future economic conditions differ substantially from the assumptions used in
the assessment for each year. 6.1.6
Actuarial assumptions in defined benefit plans Commitments
with defined benefit plans to employees are recognized as liabilities in the statement of financial position based on actuarial
estimates revised annually by an independent actuary, using the projected unit credit method. The
present value of defined benefit pension plan depends on multiple factors that are determined according to actuarial estimates,
net of the fair value of the plan assets, when applicable. For this purpose, certain assumptions are used including the discount
rate and wage growth rate assumptions. It may be necessary to make adjustments in the future if future economic conditions materially
differ from the assumptions used in the valuation of each year. 6.1.7
Oil and gas reserves Reserves
include oil and gas volumes (in m3 of oil equivalent) that are economically producible, in the areas where the Company operates
or has a (direct or indirect) interest and over which the Company has exploitation rights, including oil and gas volumes related
to those service agreements under which the Company has no ownership rights on the reserves or the hydrocarbons obtained and those
estimated to be produced for the contracting company under service contracts. There
are numerous uncertainties in estimating proved reserves and future production profiles, development costs and prices, including
several factors beyond the producer’s control. Reserve engineering is a subjective process of estimating underground accumulations
involving a certain degree of uncertainty. Reserves estimates depend on the quality of the available engineering and geological
data as of the estimation date and on the interpretation and judgment thereof. Periodic
revisions and adjustments to the estimated oil and gas reserves and related future net cash flows may be necessary as a result
of changes in a number of factors, including reservoir performance, new drilling, oil and gas prices, cost, technological advances,
new geological or geophysical data, and other economic factors or at least once a year. The
Company’s estimates of oil and gas reserves have been developed by the Company’s internal specialists, specifically
petroleum engineers, and audited by independent specialists engaged by Company. The
Company uses the information obtained from the calculation of reserves in the determination of depreciation of properties, plant
and equipment used in oil and gas areas, as well as assessing the recoverability of these assets and including, when applicable,
goodwill allocated to oil and gas segment (see Notes 4.6 to 4.9). 6.1.8
Environmental remediation The
costs incurred to limit, neutralize or prevent environmental pollution are only capitalized if at least one of the following conditions
is met: (a) such costs relate to improvements in safety; (b) the risk of environmental pollution is prevented or limited; or (c)
the costs are incurred to prepare the assets for sale and the book value (which considers those costs) of such assets does not
exceed their respective recoverable value. Liabilities
related to future remediation costs are recorded when, on the basis of environmental assessments, such liabilities are probable
to materialize, and costs can be reasonably estimated. The actual recognition and amount of these provisions are generally based
on the Company’s commitment to an action plan, such as an approved remediation plan or the sale or disposal of an asset.
The provision is recognized on the basis that a future remediation commitment will be required. The
Company measures liabilities based on its best estimation of present value of future costs, using currently available technology
and applying current environmental laws and regulations as well as the Company’s own internal environmental policies. 6.1.9
Business Combinations The
acquisition method involves the measurement at fair value of the identifiable assets acquired and the liabilities assumed in the
business combination at the acquisition date. For
the purpose to determine the fair value of identifiable assets, the Company uses the valuation approach considered the most representative
for each asset. These include: i) the income approach, through indirect cash flows (net present value of expected future cash
flows) or through the multi-period excess earnings method, ii) the cost approach (replacement value of the good adjusted for loss
due to physical deterioration, functional and economic obsolescence) and iii) the market approach through comparable transactions
method. Likewise,
in order to determine the fair value of liabilities assumed, the Company’s Management considers the probability of cash
outflows that will be required for each contingency, and elaborates the estimates with assistance of legal advisors, based on
the information available and taking into account the strategy of litigation and resolution / liquidation. Management
critical judgment is required in selecting the approach to be used and estimating future cash flows. Actual cash flows and values
​​may differ significantly from the expected future cash flows and related values ​​obtained through the
mentioned valuation techniques. 6.2
Financial risk management 6.2.1
Financial Risk Factors The
Company’s activities are subject to several financial risks: market risk (including the exchange rate risk, the interest
rate risk and the price risk), credit risk and liquidity risk. Financial
risk management is encompassed within the Company’s global policies, there is an integrated risk management methodology,
where the focus is not placed on the individual risks of the business units’ operations, but there is rather a wider perspective
focused on monitoring risks affecting the whole portfolio. The Company’s risk management strategy seeks to achieve a balance
between profitability targets and risk exposure levels. Financial risks are those derived from financial instruments the Company
is exposed to during or at the closing of each fiscal year. The Company uses derivative instruments to hedge certain risks when
it deems it necessary according to its risk management internal policies. Financial
risk management is controlled by the Financial Department, which identifies, evaluates and covers financial risks. Risk management
systems and policies are reviewed on a regular basis to reflect changes in market conditions and the Company’s activities,
and have been applied consistently during the periods comprised in these Consolidated Financial Statements. This section includes
a description of the main risks and uncertainties which may adversely affect the Company’s strategy, performance, operational
results and financial position. 6.2.1.1
Market risks 6.2.1.1.1
Foreign exchange risk The
Company’s results of operations and financial position are exposed to changes in the exchange rate between the Company’s
functional currency, which is the U.S. dollar and other currencies, primarily with respect to the Argentine peso (which is the
legal currency in Argentina). In some cases, the Company may use derivative financial instruments to mitigate the associated exchange
rate risk. In
fiscal year 2020, the U.S. dollar recorded an approximate 40.5% increase against the Argentine peso, from $59.89 in December 2019
to $84.15 in December 2020, and taking into consideration that during the year the Company mostly had a net passive position in
Argentine pesos, as of December 31, 2020 the Company recorded net foreign exchange gain in the amount of US$ 11 million. Taking
into account the net active financial position in Argentine pesos as of December 31, 2020, excluding the assets and liabilities
available for sale, the Company estimates that provided all other variables remain constant, a 10% revaluation/(devaluation) of
U.S. dollar as compared to the Argentine peso would generate in absolute values a (decrease)/increase of US$ 7 million in the
2020 fiscal year’s income/(loss), before income tax. The
Group´s exposure to other foreign currency movements is not material. 6.2.1.1.2
Price risk The
Company’s financial instruments are not significantly exposed to hydrocarbon international price risks on account of the
current regulatory, economic, governmental and other policies in force, oil and gas domestic prices are not directly affected
in the short-term due to variations in the international market. Additionally,
the Company’s investments in financial assets classified as “at fair value through profit or loss” are sensitive
to the risk of changes in the market prices resulting from uncertainties as to the future value of such financial assets. The
Company estimates that provided all other variables remain constant, a 10% revaluation/(devaluation) of each market price would
generate the following increase/(decrease) in the 2019 fiscal year’s income/(loss), before income tax in relation to financial
assets at fair value through profit and loss detailed in Note 12.2 to these Consolidated Financial Statements:
Increase
of the result for the year
Financial
assets 12.31.2020 12.31.2019
Shares 4 2
Government
securities 21 11
Investment
funds 9 24
Variation
of the result of the year 34 37 6.2.1.1.3
Cash flow and fair value interest rate risk The
management of the interest rate risk seeks to reduce financial costs and limit the Company’s exposure to interest rate increases. Indebtedness
at variable rates exposes the Company to the interest rate risk on its cash flows due to the possible volatility they may experience.
Indebtedness at fixed rates exposes the Company to the interest rate risk on the fair value of its liabilities, since they may
be considerably higher than variable rates. As
of December 31, 2020, only approximately 10% of the indebtedness was subject to variable interest rates. Likewise, most of the
Company’s indebtedness subject to variable interest rates is denominated in U.S. dollar, based on Libor rate plus an applicable
margin and a small portion is denominated in pesos accruing interest based on the private Badlar rate. As
of December 31, 2020, just 13.6% of the indebtedness was subject to variable interest rates. Furthermore, regarding the Company’s
debt accruing variable interest rates, 61.8% is denominated in pesos, mainly at Private Badlar rate, and the remaining 38.2% is
denominated in U.S. dollars, mainly at Libor rate plus an applicable spread. The
Company seeks to mitigate its interest-rate risk exposure through the analysis and evaluation of: (i) the different liquidity
sources available in the financial and capital market, both domestic and (if available) international; (ii) interest rates alternatives
(fixed or variable), currencies and terms available for companies in a similar sector, industry and risk than the Company; (iii)
the availability, access and cost of interest-rate hedge agreements. On doing this, the Company evaluates the impact on profits
or losses resulting from each strategy over the obligations representing the main interest-bearing positions. In
the case of fixed rates and in view of the market’s current conditions, the Company considers that the risk of a significant
decrease in interest rates is low and, therefore, does not foresee a substantial risk in its indebtedness at fixed rates. As
of the date of issuance of these Consolidated Financial Statements, the Company is not exposed to a significant risk of variable
interest rate increases since most of the financial debt is subject to fixed rate. The
following chart shows the breakdown of the Company’s borrowings classified by interest rate and the currency in which they
are denominated:
12.31.2020 12.31.2019
Fixed
interest rate:
Argentinian
pesos 53 143
U.S
dollar 1,318 1,687
Subtotal
loans granted at a fixed interest rate 1,371 1,830
Floating
interest rates:
Argentinian
pesos 133 10
U.S
dollar 82 64
Subtotal
loans granted at a floating interest rate 215 74
Non
interest accrued
Argentinian
pesos 8 17
U.S
dollar 20 26
Subtotal
no interest accrued 28 43
Total
borrowings 1,614 1,947 Based
on the conducted simulations, and provided all other variables remain constant, a 10% increase/decrease in variable interest rates
would generate the following (decrease)/increase in the 2020 fiscal year's year’s income/(loss), before income tax, of US$
5 million. 6.2.1.2
Credit risk The
Company establishes individual credit limits according to the limits defined by the Board of Directors and approved by the Financial
Department based on internal or external ratings. The Company makes constant credit assessments on its customers’ financial
capacity, which minimizes the potential risk for bad debt losses. The
credit risk represents the exposure to possible losses resulting from the breach by commercial or financial counterparties of
their obligations taken on with the Company. This risk stems mainly from economic and financial factors or a possible counterparty
default. The
credit risk is associated with the Company’s commercial activity through customer trade receivables, as well as available
funds and deposits in banking and financial institutions. The
Company, in its ordinary course of business and in accordance with its credit policies, grants credits to a large customer base,
mainly large sectors of the industry, including petrochemical companies, natural gas distributors and electricity large users. As
of December 31, 2020, the Company’s trade receivables totaled US$ 246 million, of which 99.98% are short-term and the remaining
0.02% is classified as non-current. With the exception of CAMMESA, which represents approximately 72% of such trade receivables,
the Company does not have a significant credit risk concentration, as this exposure is distributed among a large number of customers
and other counterparties. The
impossibility by CAMMESA to pay these receivables may have a substantially adverse effect on cash income and, consequently, on
the result of operations and financial situation which, in turn, may adversely affect the Company’s repayment capacity. The
credit risk of liquid funds and other financial investments is limited since the counterparties are high credit quality banking
institutions. If there are no independent risk ratings, the risk control area evaluates the customer’s creditworthiness,
based on past experiences and other factors. The
Company applies the simplified approach of IFRS 9 to measure the expected credit losses trade receivables and other receivables
in accordance with the policy described in Note 4.10.4. The
expected credit loss on trade receivables and financial assets as of December 31, 2020, 2019 and 2018 amounts to US$ 12 million,
US$ 1 million and US$ 13 million, respectively and was determined based on credit loss rates calculated for days past due detailed
below:
12.31.2020 Undue 30
days 60
days 90
days 120
days 150
days 180
days +
180 days
Generation 0.35% 1.11% 5.74% 9.78% 11.23% 19.77% 20.87% 22.71%
Oil
and Gas 0.49% 0.72% 5.96% 16.21% 16.23% 17.74% 17.76% 17.79%
Petrochemicals 0.02% 0.06% 0.72% 2.26% 9.95% 23.84% 19.14% 36.92%
Holding 12.58% 0.94% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
12.31.2019 Undue 30
days 60
days 90
days 120
days 150
days 180
days +
180 days
Generation 0.10% 0.35% 1.99% 2.95% 4.03% 5.59% 9.79% 16.13%
Oil
and Gas 0.53% 1.49% 9.45% 18.03% 18.50% 18.81% 18.90% 18.92%
Distribution
of energy 3.00% 3.00% 8.00% 18.00% 20.00% 45.00% 72.00% 72.00%
Petrochemicals 0.39% 0.73% 6.88% 16.66% 25.32% 29.59% 30.97% 43.05%
Holding 1.85% 2.81% 6.84% 17.15% 26.77% 43.21% 49.89% 65.29%
12.31.2018 Undue 30
days 60
days 90
days 120
days 150
days 180
days +
180 days
Generation 0.04% 0.09% 2.62% 3.39% 9.37% 13.56% 19.82% 28.88%
Oil
and Gas 2.20% 4.42% 11.11% 20.42% 42.85% 47.32% 49.20% 56.32%
Distribution
of energy 8.00% 8.00% 12.00% 19.00% 26.00% 59.00% 69.00% 69.00%
Petrochemicals 0.03% 0.08% 1.41% 4.98% 11.52% 20.36% 24.91% 25.24%
Holding 0.96% 1.25% 2.03% 2.85% 19.86% 26.41% 32.95% 32.97% The
loss allowance for financial assets and other receivables adjustment as of January 1, 2018 for the application of the expected
credit losses methodology to the loss allowance as of December 31, 2017, based on the incurred loss model, is detailed as follows:
Financial
assets Other
receivables
Loss
allowance under IAS 39 as of 12.31.2017 22 7
Adjustment
to the opening balance of retained earnings 4 (1)
Loss
allowance calculated under IFRS 9 as of 01.01.2018 26 6 The
detailed adjustments to the opening balance in equity as a result of the application of IFRS 9, are disclosed net of tax effect
for a total amount of US$ 2 million, with counterpart in retained earnings of US$ 1 million and in non-controlling interest of
US$ 1 million. Finally,
although cash, cash equivalents and financial assets are also subject to the impairment requirements of IFRS 9, the identified
impairment loss is immaterial. Loss
allowance evolution as of December 31, 2020, 2019 and 2018, is detailed in Note 12.3. The
Company’s maximum exposure to credit risk is based on the book value of each financial asset in the Consolidated Financial
Statements. On the basis of the change in an assumption, while holding all other assumptions constant, a 5% increase/(decrease)
in the estimated trade receivables’ uncollectibility rate would result in US$ 1.5 million (decrease)/increase in 2019 fiscal
year’s results, before income tax. 6.2.1.3
Liquidity risk The
liquidity risk is associated with the Company’s capacity to finance its commitments and conduct its business plans with
stable financial sources, as well as with the indebtedness level and the financial debt maturities profile. The cash flow projection
is made by the Financial Department. The
Company Management supervises updated projections on liquidity requirements to guarantee the sufficiency of cash and liquid financial
instruments to meet operating and financing needs of the Company while keeping at all times a sufficient margin for unused credit
facilities. In this way, the aim is that the Company does not breach indebtedness levels or the Covenants, if applicable, of any
credit facility. Those projections take into consideration the Company’s debt financing plans, the meeting of the covenants
and, if applicable, the external regulatory or legal requirements such as, for example, restrictions on the use of foreign currency.
Additionally, the Financial Department regularly monitors the available credit for the Company, both in local and international,
capital market as well as banking sector. Excess
cash and balances above working capital management requirements are managed by the Company’s Treasury Department, which
invests them in marketable securities, term deposits and mutual funds, selecting instruments having proper currencies and maturities,
and an adequate credit quality and liquidity to provide a sufficient margin as determined in the previously mentioned projections. The
Company keeps its sources of financing diversified between banks and the capital market, and it is exposed to the refinancing
risk at maturity. It
should be noted that the Company operates in an economic context which main variables have recently suffered significant volatility
as a result of political and economic events both domestically and internationally, as described in Note 1.2. The
impact of COVID-19, added to the special circumstances of the sovereign debt renegotiation being conducted since the end of 2019,
affected the international financial markets, which in turn also adversely affected the cost of access to financing, hedging activities,
liquidity and access to capital for emerging markets in general, and particularly for Argentina. As regards to access to domestic
financing, an increase in liquidity in pesos has been experienced throughout the market, which has significantly reduced the cost
of financing, especially in the very short term. All
these impacts may potentially affect the Company’s capacity to obtain financing for its operations in a timely manner and
under acceptable and efficient terms, costs and conditions in line with the Company’s business needs. Furthermore,
the restrictions imposed by the BCRA (see Note 2.7) with the purpose of regulating inflows and outflows in the MLC to maintain
the exchange rate stability and protect international reserves in view of the high degree of uncertainty and volatility in the
exchange rate and other new restrictions which may be imposed in the future may affect the Company’s capacity to access
the MLC to acquire the foreign currency necessary to meet its financial obligations, such as debt principal and interest payments
(including the CBs debt), and other additional payments abroad, or otherwise affect the Company’s business and the results
of its operations. The
Company’s Management permanently monitors the evolution of situations affecting its business to determine possible steps
to take and identify potential impacts on its assets and financial position. The Company’s Consolidated Financial Statements
should be read in the light of these circumstances. It
is worth highlighting that the Company currently has a strong level of liquidity that allows it to properly face such volatility. The
determination of the Company’s liquidity index for fiscal years ended December 31, 2020 and 2019 is detailed below:
12.31.2020 12.31.2019
Current
assets 948 1,362
Current
liabilities 448 854
Index 2.12 1.59 The
following table includes an analysis of the Company financial liabilities, grouped according to their maturity dates and considering
the period remaining until their contractual maturity date from the date of the Consolidated Financial Statements. Derivative
financial liabilities are included in the analysis if their contractual maturities are essential for the understanding of the
cash flow calendar. The amounts shown in the table are the contractual undiscounted cash flows.
As
of December 31, 2020 Trade
receivables Trade
and other payables (1) Borrowings
Less
than three months 244 - 82
Three
months to one year 3 116 228
One
to two years - 7 111
Two
to five years - 3 645
More
than five years - 6 1,145
Total 247 132 2,211
As
of December 31, 2019 Trade
receivables Trade
and other payables (1) Borrowings
Less
than three months 495 - 95
Three
months to one year 5 454 188
One
to two years 8 11 288
Two
to five years - 70 834
More
than five years - 9 1,233
Total 508 544 2,638 (1)
Includes Lease Liabilities (see Note 18.1.2) 6.3
Capital risk management The
aims of managing capital are safeguard its capacity to continue operating as an on-going business with the purpose of generating
return for its shareholders and benefits to other stakeholders, and keeping an optimal capital structure to reduce the cost of
capital. To
keep or adjust its capital structure, the Company may adjust the amount of the dividends paid to its shareholders, reimburse capital
to its shareholders, issue new shares, conduct stock repurchase programs or sell assets to reduce its debt. In
line with industry practices, the Company monitors its capital based on the leverage ratio. This ratio is calculated by dividing
the net debt by the total capital. The net debt equals the total indebtedness (including current and non-current indebtedness)
minus cash and cash equivalents and current financial assets at fair value through profit and loss. The total capital corresponds
to the shareholders’ equity as shown in the statement of financial position, plus the net debt. Financial
leverage ratios as at December 31, 2020 and 2019 were as follows:
12.31.2020 12.31.2019
Total
borrowings 1,614 1,947
Less:
cash and cash equivalents, and financial assets at fair value through profit and loss (466) (590)
Net
debt 1,148 1,357
Total
capital attributable to owners 2,576 3,274
Leverage
ratio 44.57% 41.45%

7. SEGMENT INFORMATION

7. SEGMENT INFORMATION12 Months Ended
Dec. 31, 2020
Disclosure of operating segments [abstract]
SEGMENT INFORMATIONNOTE
7 The
Company is a fully integrated power company in Argentina, which participates in the electricity and oil and gas value chains. Through
its own activities, subsidiaries and share holdings in joint ventures, and based on the business nature, customer portfolio and
risks involved, we were able to identify the following business segments: Electricity
Generation Electricity
Distribution results corresponding to the divestment mentioned in Note 5.3.1 as discontinued
operations, for each of the years ended December 31, 2020, 2019 and 2018 Oil
and Gas results
corresponding to the divestment mentioned in Note 5.3.2 as discontinued operations Petrochemicals Holding
and Other Business results corresponding to the divestment mentioned in Note
5.3.3 as discontinued operations The
Company manages its operating segment based on its individual net results.
Consolidated
profit and loss information for the year ended December 31, 2020 Generation Distribution Oil
and gas Petrochemicals Holding
and others Eliminations Consolidated
Revenue 559 - 227 265 20 - 1,071
Intersegment
revenue - - 67 - - (67) -
Cost
of sales (254) - (243) (233) - 67 (663)
Gross
profit 305 - 51 32 20 - 408
Selling
expenses (2) - (28) (8) - - (38)
Administrative
expenses (30) - (42) (3) (18) - (93)
Exploration
expenses - - - - - - -
Other
operating income 35 - 9 2 10 - 56
Other
operating expenses (6) - (17) (6) (7) - (36)
Impairment
of property, plant and equipment, intangible assets and inventories (128) - - (11) - - (139)
Share
of profit from associates and joint ventures 67 - (5) - 23 - 85
Operating
income 241 - (32) 6 28 - 243
Finance
income 3 - 7 - 1 (2) 9
Finance
costs (73) - (100) (3) (3) 2 (177)
Other
financial results 1 - 44 5 34 - 84
Financial
results, net (69) - (49) 2 32 - (84)
Profit
before income tax 172 - (81) 8 60 - 159
Income
tax (33) - 23 (2) (23) - (35)
Profit
(loss) for the year from continuing operations 139 - (58) 6 37 - 124
Loss
for the year from discontinued operations - (592) - - - - (592)
(Loss)
profit for the year 139 (592) (58) 6 37 - (468)
Depreciation
and amortization 95 81 108 2 - - 286
Consolidated
profit and loss information for the year ended December 31, 2020 Generation Distribution Oil
and gas Petrochemicals Holding
and others Eliminations Consolidated
Total
profit (loss) attributable to:
Owners
of the company 147 (499) (58) 6 37 - (367)
Non
- controlling interest (8) (93) - - - - (101)
Consolidated
statement of financial position as of December 31, 2020
Assets 1,595 1,356 1,085 107 832 (85) 4,890
Liabilities 707 1,021 1,174 126 178 (85) 3,121
Net
book values of property, plant and equipment 1,015 - 543 19 33 - 1,610
Additional
consolidated information as of December 31, 2020
Increases
in property, plant and equipment, intangibles assets and right-of-use assets 61 135 41 3 2 - 242
Consolidated profit and loss information for the year ended December 31, 2019 Generation Distribution Oil and gas Petrochemicals Holding and others Eliminations Consolidated
Revenue 819 - 178 321 20 - 1,338
Intersegment revenue - - 270 - - (270) -
Cost of sales (470) - (313) (298) - 270 (811)
Gross profit (loss) 349 - 135 23 20 - 527
Selling expenses (3) - (12) (9) (2) - (26)
Administrative expenses (32) - (47) (4) (22) - (105)
Exploration expenses - - (9) - - - (9)
Other operating income 58 - 5 5 11 - 79
Other operating expenses (11) - (11) (9) (12) - (43)
Impairment of property, plant and equipment, intangible assets and inventories (52) - (10) - - - (62)
Share of profit (loss) from joint ventures and associates 13 - 21 - 67 - 101
Operating income 322 - 72 6 62 - 462
Finance income 2 - 17 - 5 (1) 23
Finance costs (82) - (94) (8) (4) 1 (187)
Other financial results 86 - 89 18 (18) - 175
Financial results, net 6 - 12 10 (17) - 11
Profit before income tax 328 - 84 16 45 - 473
Income tax (80) - (16) (5) 231 - 130
Profit for the year from discontinuing operations 248 - 68 11 276 - 603
Profit for the year from discontinued operations - 197 - - - - 197
Profit for the year 248 197 68 11 276 - 800
Depreciation and amortization 71 79 112 1 - - 263
Consolidated
profit and loss information for the year ended December 31, 2019 Generation Distribution Oil
and gas Petrochemicals Holding
and others Eliminations Consolidated
Total
profit attributable to:
Owners of the company 239 98 68 11 276 - 692
Non - controlling interest 9 99 - - - - 108
Consolidated
statement of financial position as of December 31,2019
Assets 1,472 1,480 1,261 136 1,527 (192) 5,684
Liabilities 1,226 1,792 465 122 (160) (170) 3,275
Net
book values of property, plant and equipment 1,152 1,691 612 18 34 - 3,507
Additional
consolidated information as of December 31, 2019
Increases in property,
plant and equipment 240 173 191 4 3 - 611
Consolidated
profit and loss information for the year ended December 31, 2018 Generation Distribution Oil
and gas Petrochemicals Holding
and others Eliminations Consolidated
Revenue 604 - 458 338 36 - 1,436
Intersegment revenue 2 - 63 - - (65) -
Cost of sales (273) - (287) (334) - 63 (831)
Gross profit (loss) 333 - 234 4 36 (2) 605
Selling expenses (1) - (19) (13) (4) - (37)
Administrative expenses (41) - (56) (6) (27) - (130)
Exploration expenses - - (1) - - - (1)
Other operating income 61 - 141 6 15 - 223
Other operating expenses (17) - (114) (20) (6) 1 (156)
Impairment of property,
plant and equipment - - - (32) - - (32)
Share of profit (loss)
from joint ventures and associates (11) - 37 - 92 - 118
Income from the sale
of associates - - 28 - - - 28
Operating income
(loss) 324 - 250 (61) 106 (1) 618
Gain on net monetary
position 233 - 107 49 12 2 403
Finance income 2 - 15 - 14 (1) 30
Finance costs (85) - (79) (15) (6) 1 (184)
Other financial results (365) - (512) (39) 108 - (808)
Financial results,
net (215) - (469) (5) 128 2 (559)
Profit (loss) before
income tax 109 - (219) (66) 234 1 59
Income tax (3) - 57 12 (34) - 32
Profit
(loss) for the year from continuing operations 106 - (162) (54) 200 1 91
Profit for the
year from discontinued operations - 116 49 - 31 - 196
Profit
(loss) for the year 106 116 (113) (54) 231 1 287
Depreciation and amortization 66 69 92 6 1 - 234
Consolidated
profit and loss information for the year ended December 31, 2018 Generation Distribution Oil
and gas Petrochemicals Holding
and others Eliminations Consolidated
Total
profit (loss) attributable to:
Owners of the company 100 61 (115) (54) 231 1 224
Non - controlling interest 6 55 2 - - - 63
Consolidated
statement of financial position as of December 31,2018
Assets 1,414 2,133 1,237 153 872 (137) 5,672
Liabilities 1,054 1,241 1,273 198 247 (136) 3,877
Additional
consolidated information as of December 31, 2018
Increases in property,
plant and equipment 235 227 192 4 7 - 665
Net
book values of property, plant and equipment 1,036 1,657 554 15 54 - 3,316 Accounting
criteria used by the subsidiaries to measure results, assets and liabilities of the segments is consistent with that used in
the Consolidated Financial Statements. Transactions between different segments are conducted under market

8. REVENUE

8. REVENUE12 Months Ended
Dec. 31, 2020
Revenue [abstract]
REVENUENOTE
8
12.31.2020 12.31.2019 12.31.2018
Energy
sales to the Spot Market 179 249 274
Energy
sales by supply contracts 323 285 278
Fuel
self-supply 54 282 51
Other
sales 3 3 1
Generation
sales subtotal 559 819 604
Oil,
gas and liquid sales 217 171 454
Other
sales 11 7 4
Oil
and gas sales subtotal 228 178 458
Technical assistance
services and administartion sales 19 20 36
Holding
and others subtotal 19 20 36
Petrochemicals
products 265 321 338
Petrochemicals
sales subtotal 265 321 338
Total
revenue 1,071 1,338 1,436

9. COST OF SALES

9. COST OF SALES12 Months Ended
Dec. 31, 2020
Cost Of Sales
COST OF SALESNOTE
9
12.31.2020 12.31.2019 12.31.2018
Inventories
at the beginning of the year 153 137 113
Plus:
Charges for the year
Purchases of
inventories, energy and gas 153 353 378
Salaries and
social security charges 51 57 66
Benefits to
employees 11 9 6
Accrual of defined
benefit plans 4 4 2
Works contracts,
fees and compensation for services 55 60 61
Depreciation
of property, plant and equipment 194 171 153
Intangible assets
amortization 5 6 6
Right-of-use
assets amortization 1 2 -
Transport of
energy 5 4 4
Transportation
and freights 20 22 14
Consumption
of materials 17 21 43
Penalties - 1 1
Maintenance 26 27 24
Canons and royalties 42 59 74
Environmental
control 4 3 5
Rental and insurance 23 21 13
Surveillance
and security 2 6 6
Taxes, rates
and contributions 3 4 5
Other 2 (4) (6)
Subtotal 618 826 855
Gain
on monetary position 8 1 -
Less:
Inventories at the end of the year (116) (153) (137)
Total
cost of sales 663 811 831

10. OTHER ITEMS OF THE STATEMEN

10. OTHER ITEMS OF THE STATEMENT OF COMPREHENSIVE INCOME12 Months Ended
Dec. 31, 2020
Other Items Of Statement Of Comprehensive Income
OTHER ITEMS OF THE STATEMENT OF COMPREHENSIVE INCOMENOTE
10 10.1
Selling expenses
12.31.2020 12.31.2019 12.31.2018
Salaries
and social security charges 3 5 5
Benefits
to employees - 1 -
Fees
and compensation for services 3 2 2
Compensation
agreements 1 (1) 2
Depreciation
of property, plant and equipment - - 1
Taxes,
rates and contributions 8 10 17
Net
impairment losses on financial assets 12 (2) 2
Transport 9 9 6
Other 2 2 2
Total
selling expenses 38 26 37 10.2
Administrative expenses
12.31.2020 12.31.2019 12.31.2018
Salaries
and social security charges 34 38 57
Benefits
to employees 4 8 5
Accrual
of defined benefit plans 7 7 1
Fees
and compensation for services 26 29 40
Compensation
agreements - - 3
Directors'
and Syndicates' fees 7 9 4
Depreciation
of property, plant and equipment 5 7 5
Consumption
of materials - 1 1
Maintenance 1 1 2
Transport
and per diem 1 1 2
Rental
and insurance 1 1 1
Surveillance
and security 1 - 2
Taxes,
rates and contributions 2 1 4
Communications 1 2 2
Other 3 - 1
Total
administrative expenses 93 105 130 10.3
Exploration expenses
12.31.2020 12.31.2019 12.31.2018
Geological and geophysical
expenses - 4 -
Decrease in unproductive
wells - 5 1
Total
exploration expenses - 9 1 10.4
Other operating income and expenses
Other
operating income 12.31.2020 12.31.2019 12.31.2018
Recovery
of doubtful accounts 3 - -
Insurrance
recovery 3 4 -
Services
to third parties 6 10 11
Profit
for property, plant and equipment sale 1 - 3
Dividends
received 1 1 1
Reversal
of contingencies 2 1 4
Contractual
penalty 7 - -
Commercial
interests 30 52 51
Natural
Gas Surplus Injection Promotion Program - - 23
Compensation
for transaction agreement in Ecuador - - 99
Other 3 11 31
Total
other operating income 56 79 223
Other
operating expenses
Provision for
contingencies (7) (5) (16)
Decrease in property,
plant and equipment (1) - (2)
Allowance for
tax credits - (4) -
Tax on bank transactions (11) (16) (14)
Cost for services provided to third parties - - (1)
Donations and
contributions (3) (2) (2)
Institutional
promotion (2) (2) (3)
Extraordinary
canon - - (3)
Onerous contract
(Ship or Pay) - - (7)
Tax contingencies
in Ecuador - - (69)
Other (12) (14) (39)
Total
other operating expenses (36) (43) (156) 10.5.
Financial results
Note 12.31.2020 12.31.2019 12.31.2018
Gain
on monetary position, net - - 403
Finance
income
Financial
interest 1 11 23
Other
interest 8 12 7
Total
finance income 9 23 30
Finance
cost
Commercial
interest - (2) -
Fiscal
interest (3) (6) (7)
Financial interest
(1) (164) (165) (157)
Other
interest (3) (10) (15)
Other
financial expenses (7) (4) (5)
Total
financial expenses (177) (187) (184)
Other
financial results
Foreign
currency exchange difference, net 14 (6) (780)
Changes
in the fair value of financial instruments 30 88 44
Gains
(losses) from present value measurement 2 55 (74)
Results
for the repurchase of corporate bonds 38 25 2
Other
financial results - 13 -
Total
other financial results 84 175 (808)
Total
financial results, net (84) 11 (559) (1)
10.6
Income tax The
breakdown of income tax charge is:
12.31.2020 12.31.2019 12.31.2018
Current
tax 13 22 9
Deferred
tax 22 (186) (38)
Other
comprehensive income - - 1
Difference
in the estimate of previous fiscal year income tax and the income tax statement - - (4)
Optional
tax revaluation - 34 -
Total loss income
tax 35 (130) (32) Below
is a reconciliation between income tax expense and the amount resulting from application of the tax rate on the income before
taxes:
12.31.2020 12.31.2019 12.31.2018
Profit
before income tax 159 473 59
Current tax rate 30% 30% 30%
Result
at the tax rate 48 142 18
Share
of profit of associates and joint ventures (26) (25) (3)
Non-taxable
results (5) (38) 7
Effects
of exchange differences and traslation effect of property, plant and equipment and intangible assets, net 88 93 -
Adjustment
of valuation of property, plant and equipment and intangible assets (156) (202) -
(Loss)
gain on monetary position, net - - (38)
Effect
of tax rate change in deferred tax 19 37 (26)
Adjustment
effect for tax inflation 74 82 -
Payment
of optional tax revaluation - 34 -
Special
tax, revaluation of property, plant and equipment - (169) -
Difference
in the estimate of previous fiscal year income tax and the income tax statement (7) (86) 4
Deferred
tax not previously recognized - - 4
Other - 2 2
Total loss
income tax 35 (130) (32) As
of December 31, 2020 and 2019 consolidated accumulated tax losses amount to US$ 504 million and US$ 444 million, respectively,
which may be offset, pursuant to the applicable tax laws, with tax profits corresponding to future fiscal years, at
the tax rate that is estimated to apply
Fiscal
year generation Fiscal
year prescription 12.31.2020 12.31.2019
2016 2021 3 4
2017 2022 2 3
2018 2023 26 38
2019 2024 59 66
2020 2025 36 -
126 111 Income
tax assessment As
of December 31, 2020 and 2019, the cumulative variation in the IPC has exceeded the 15% and 30% condition set for the third and
second transition year pursuant to Act No. 27,430 and, therefore, the effect of the tax inflation adjustment has been accrued
in the calculation of the current and deferred income tax provision, except in the case of the Company and its subsidiaries PEFM,
PHA and PACOGEN regarding the interim fiscal periods resulting from the corporate reorganizations where, taking into consideration
the merger effective dates, the mentioned legal parameters have not been exceeded. Investment
companies A
literal application of the tax inflation adjustment mechanism set forth by Title VI of the Income Tax Act is inconsistent in certain
aspects that have not been applied by some investing subsidiaries in the assessment of the income tax for fiscal years 2020 and
2019. HIDISA
and HINISA HIDISA
and HINISA have assessed the income tax for fiscal years 2012 - 2019 taking into consideration the application of the inflation
adjustment mechanisms set forth in Title VI of the Income Tax Act, charging all its income in fiscal year 2019, thus failing to
apply Section 194 of the Law, the update of Property, plant and equipment amortizations (Sections 87, 88 and 85.e), and a cost
restatement on account of the disposal of shares and mutual funds quotas (Section 65), to such effect using the relevant indexes
published by the INDEC and relying on the similarity with the parameters stated in re “Candy S.A.”, resolved by the
CSJN on July 3, 2009, which ruling ordered the application of the inflation adjustment mechanism. As
of December 31, 2020, the companies hold a provision for the additional income tax liabilities which should have been assessed
for the reasons mentioned above. The provision for the period, including compensatory interest, and is disclosed under “Non-current
income tax liabilities”.

11. NON-FINANCIAL ASSETS AND LI

11. NON-FINANCIAL ASSETS AND LIABILITIES12 Months Ended
Dec. 31, 2020
Non-financial Assets And Liabilities
NON-FINANCIAL ASSETS AND LIABILITIESNOTE
11 11.1.
Property, plant and equipment
Original
values
Type
of good At
the beginning Increases Impairment Transfers Decreases Traslation
effect Reclasification
to assets clasified as held for sales At
the end
Land 14 - - - - - - 14
Buildings 202 1 (29) 8 - (1) (43) 138
Equipment and
machinery 1,254 2 (158) 268 (3) - - 1,363
High, medium
and low voltage lines 1,049 2 (111) 49 (2) (34) (953) -
Substations 367 15 (47) 50 - (11) (374) -
Transforming
chamber and platforms 219 3 (26) 14 (2) (5) (203) -
Meters 226 1 (23) 16 - (7) (213) -
Wells 672 3 - 93 (4) - - 764
Mining property 253 - - - - - - 253
Vehicles 22 3 (1) - - (1) (23) -
Furniture and
fixtures and software equipment 74 6 (1) 3 - (1) (29) 52
Communication
equipments 15 - - 4 - - (16) 3
Materials and
spare parts 37 15 (2) (12) - - (7) 31
Petrochemical
industrial complex 14 - - 3 - - - 17
Work in progress 792 175 (1) (490) - (10) (333) 133
Advances to
suppliers 18 13 - (6) - - (3) 22
Other
goods 6 - (4) - - - - 2
Total
at 12.31.2020 5,234 239 (403) - (11) (70) (2,197) 2,792
Total
at 12.31.2019 4,868 591 (112) - (40) (73) - 5,234
Depreciation Net
book values
Type
of good At
the beginning Decreases Impairment For
the year (1) Traslation
effect Reclasification
to assets clasified as held for sales At
the end At
the end At
12.31.2019
Land - - - - - - - 14 14
Buildings (75) - 13 (7) - 8 (61) 77 127
Equipment and
machinery (411) 2 68 (96) - - (437) 926 843
High, medium
and low voltage lines (344) 1 - (36) 11 368 - - 705
Substations (115) - - (14) 4 125 - - 252
Transforming
chamber and platforms (63) - - (8) 3 68 - - 156
Meters (87) - - (10) 3 94 - - 139
Wells (386) - - (74) - - (460) 304 286
Mining property (144) - - (17) - - (161) 92 109
Vehicles (21) - - (3) - 18 (6) (6) 1
Furniture and
fixtures and software equipment (57) - 1 (8) - 20 (44) 8 17
Communication
equipments (10) - - (1) - 10 (1) 2 5
Materials and
spare parts (3) - - (1) - 1 (3) 28 34
Petrochemical
industrial complex (8) - - (1) - - (9) 8 6
Work in progress - - - - - - - 133 792
Advances to
suppliers - - - - - - - 22 18
Other
goods (3) - 3 - - - - 2 3
Total
at 12.31.2020 (1,727) 3 85 (276) 21 712 (1,182) 1,610
Total
at 12.31.2019 (1,552) 12 50 (255) 18 - (1,727) 3,507
(1) Includes
US$ 77 million corresponding to discontinued operations for 2020 and 2019. Borrowing
costs capitalized in the book value of property, plant and equipment during the year ended December 31, 2020 and 2019 amounted
to US$ 10 million and US$ 17 million, respectively (see Note 12.5). 11.1.1
Impairment of Property, plant and equipment The
Company regularly monitors the existence of events or changes in circumstances which may indicate that the book value of property,
plant and equipment may not be recoverable in accordance with the policy described in Notes 4.9 and 6.1.1. In
the Power Generation segment, spot market prices that suffered reductions in 2019 were again affected by the change in currency
of the whole remuneration scheme as from February 1, 2020 and the temporary suspension of the automatic price adjustment mechanism
replicating inflation, which has not been restored as of the issuance of these Consolidated Financial Statements. In
the Oil and Gas segment, the market for gas, a product which represents approximately 90% of our hydrocarbon production, experienced
a reduction in the domestic sale price on account of oversupply in 2019, and in 2020 the lockdown measures to prevent the spread
of COVID-19 (see Note 1.2) caused a decrease in the SADI’s electricity generation, which resulted in a lower thermal dispatch
and, consequently, lower gas consumptions by CAMMESA which, added to the decrease in the non-essential industrial demand, exacerbated
oversupply in the summer months and led to lower tendered gas prices and decreases in domestic gas production. The above-mentioned
lockdown measures also greatly affected the demand for oil, which experienced a collapse in sold volumes as a result of the sharp
drop in the demand for refined products and the exhaustion of the storage capacity. Therefore,
in view of the above-mentioned indications of impairment, the Company has determined the recoverable amount of the CGUs making
up the Generation and Oil & Gas segments as of December 31, 2020 and 2019. The
methodology used in the estimation of the recoverable amount consisted on calculating the present value of future net cash flows
expected to be generated by the CGU, discounted with a rate reflecting the weighted average costs of the capital employed. Cash
flows were prepared based on estimates on the future behavior of certain variables that are sensitive in the determination of
the value in use, including the following: (i) reference prices for products; (ii) demand projections per type of product; (iii)
costs evolution; and; (iv) macroeconomic variables such as inflation and exchange rates, etc. 11.1.1.1
Generation segment As
of December 31, 2020 and 2019, the assessment of recoverability, determined through the value in use of the Güemes and Piedra
Buena thermal power plants and the Pichi Picun Leufú, Diamante and Nihuiles hydroelectric power plants, with revenues fully
generated in the spot market, and the Loma de la lata and Piquirenda thermal power plants, with revenues fully generated in the
spot market as from the termination of the contracts in 2021, which make up the Power Generation segment, resulted in the recognition
of impairment losses for US$ 110 million and US$ 52 million, respectively. The
projections used in the calculation of the recoverable amount as of December 31, 2020 take into consideration 5 alternative scenarios
with a probability of occurrence ranging between 10% and 40%, assigned based on historical experience on regulations set by the
SE, which weigh: i) price restructuring increases ranging between 9% and 30% in 2021 and up to an additional 30% in 2022; ii)
the total or partial implementation of the automatic inflation adjustment mechanism to the spot remuneration set by SE Resolution
No. 31/20 as from 2022; iii) the gradual regularization towards 2023 of the financing term granted to CAMMESA to the levels observed
in 2019; and iv) a 10.34% WACC rate after taxes. Actual
values may substantially differ from projections, mainly on account of: i) the timeliness and magnitude of price restructuring
updates for energy estimated for 2021 and 2022, ii) the modality for the reimplementation as from 2022 of the price inflation
adjustment mechanism suspended by the SE, and/or iii) the date of regularization of the financing term granted to CAMMESA. Even
though this variation has been taken into consideration when weighing the scenarios, the Company estimates that any sensitivity
analysis that considers changes in any of them taken individually may lead to distorting conclusions, generating an adverse effect
on the Company’s results. The
key assumptions used in the calculation of the recoverable amount as of December 31, 2019 considered: i) the remuneration
for sales in the spot market set by SE Resolution No. 31/20 (including the automatic price adjustment mechanism), and ii) an 9.7%
after tax WACC discount rate. As
regards these projections, it is worth highlighting that the Management has considered: i) that the Energía Plus contracted
volume remains allocated to Genelba to maximize efficiency in cost structure, and ii) the entry into effect of co-generation and
closing to combined cycle projects under SEE Resolution No. 287/17 and the resulting dispatch reduction for less efficient power
plants such as Güemes and Piedra Buena. 11.1.1.2
Oil & Gas segment As
of December 31, 2020 and 2019, the recoverability of the assets in the Oil and Gas segment was assessed through the determination
of their value in use. As of December 31, 2019, impairment losses for US$ 10 million were recognized in the Sierra Chata block. The
projections used in the calculation of the recoverable amount as of December 31, 2020 take into consideration the following assumptions
for gas: i) Years 2021 through 2024: sale of gas volumes at an annual average price of 3.46 US$/MMBTU; ii) Year 2025 onwards:
the break-even price is reached, consistent with a prudent development of unconventional reserves in Vaca Muerta. In the case
of oil, an average price of US$ 65 was estimated for the Brent barrel (reference price for the Company) until 2026 inclusive,
as well as a gradual increase until reaching an average price of US$ 73 in 2030. The after tax WACC discount rate is 13.1%. The
key assumptions used in the calculation of the recoverable amount as of December 31, 2019 consider i) a 2020 price of natural
gas similar to the 2019 price, and a 20-25% gas price increase for 2021, price that is maintained in subsequent years considering
a moderate development of unconventional resources (Vaca Muerta) tending to achieve gas domestic demand supply and a decrease
in gas imports, and ii) a 12.6% after tax WACC discount rate before tax. It is worth highlighting that the gas price is maintained
in the projections, which in turn affects the estimated investment profile. Finally,
it is important to highlight that as of December 31, 2020 and 2019, the book value of the Oil and gas segment assets, including
the goodwill assigned to the segment, does not exceed its recoverable value. 11.2
Intangible assets
Original
values
Type
of good At
the beginning Impairment Traslate
Effect Reclasification
to assets clasified as held for sales
At
the end
Concession agreements 270 (147) (3) (100) 20
Goodwill 35 - - - 35
Intangibles identified
in acquisitions of companies 7 - - - 7
Total
at 12.31.2020 312 (147) (3) (100) 62
Total
at 12.31.2019 314 - (2) - 312
Depreciation
Type
of good At
the beginning Impairment For
the year (1) Reclasification
to assets clasified as held for sales At
the end
Concession agreements (159) 129 (5) 16 (19)
Intangibles identified
in acquisitions of companies (2) - - - (2)
Total
at 12.31.2020 (161) 129 (5) 16 (21)
Total
at 12.31.2019 (154) - (7) - (161)
Net
book values
Type
of good At
the end At
12.31.2019
Concession agreements 1 111
Goodwill 35 35
Intangibles identified
in acquisitions of companies 5 5
Total
at 12.31.2020 41
Total
at 12.31.2019 151
(1) As of December 31,
2020, and considering the assumptions detailed in Note 11.1, the assessment of recoverability for the Diamante and Nihuiles
hydroelectric power plants from the Power Generation segment, with income generated in the spot market, resulted in the recognition
of impairment losses for US$ 18 million.
(2) It includes US$
1 million and US$ 1 million corresponding to Discontinued operations for fiscal year 2020 and 2019, respectively. 11.3
Deferred tax assets and liabilities, income tax and minimum notional income tax The
composition of the deferred tax assets and liabilities is as follows:
12.31.2019 Profit
(loss) Gain
on monetary position, net Reclasification
to assets clasified as held Other
reclasifications 12.31.2020
Tax
loss carryforwards 111 18 - (3) - 126
Intangible
assets - 3 - - - 3
Trade
and other receivables 13 9 - (16) - 6
Trade
and other payables 13 (2) - (8) - 3
Salaries
and social security payable 2 4 - (3) - 3
Defined
benefit plans 7 (1) - (1) - 5
Provisions 39 (1) - (10) - 28
Adjustment
for tax inflation 8 (4) - - - 4
Other - 1 - - - -
Deferred
tax asset 193 27 - (41) - 178
Property,
plant and equipment (384) 89 10 271 - (13)
Adjustment
for tax inflation (99) (81) 1 41 136 (2)
Investments
in companies (8) (17) - - - (25)
Intangible
assets (13) 2 - - - (11)
Inventory (10) (1) - 5 - (6)
Trade
and other receivables (4) (3) - - - (7)
Financial
assets at fair value through profit and loss (11) 3 - 4 - (4)
Taxes
payable (4) 1 - - - (3)
Other - - - - - -
Deferred
tax liabilities (533) (7) 11 321 136 (71)
12.31.2018 Profit
(loss) Gain
on monetary position, net 12.31.2019
Tax
loss carryforwards 52 59 - 111
Trade
and other receivables 12 1 - 13
Trade
and other payables 52 (37) (2) 13
Salaries
and social security payable 1 1 - 2
Defined
benefit plans 9 (2) - 7
Provisions 32 7 - 39
Taxes
payable 6 (6) - -
Adjustment
for tax inflation - 8 - 8
Other 2 (2) - -
Deferred
tax asset 166 29 (2) 193
Property,
plant and equipment (334) (55) 5 (384)
Adjustment
for tax inflation - (99) - (99)
Investments
in companies (19) 11 - (8)
Intangible
assets (193) 175 5 (13)
Inventory - (10) - (10)
Trade
and other receivables (7) 3 - (4)
Financial
assets at fair value through profit and loss (9) (2) - (11)
Borrowings (3) 3 - -
Taxes
payable - (4) - (4)
Other (6) 6 - -
Deferred
tax liabilities (571) 28 10 (533) Deferred
tax assets and liabilities are offset in the following cases: a) when there is a legally enforceable right to offset tax assets
and liabilities; and b) when deferred income tax charges are associated with the same fiscal authority. The following amounts,
determined after their adequate offset, are disclosed in the statement of financial position:
12.31.2020 12.31.2019
Deferred
tax asset 108 28
Deferred
tax liabilities (1) (368)
Deferred
tax assets (liabilities), net 107 (340) 11.4
Inventories
12.31.2020 12.31.2019
Materials
and spare parts 79 95
Advances
to suppliers 3 21
In
process and finished products 34 37
Total 116 153 11.5
Provisions
12.31.2020 12.31.2019
Non-Current
Provisions
for contingencies 91 123
Asset
retirement obligation and dismantling of wind turbines 19 20
Environmental
remediation 1 1
Other
provisions - 1
111 145
Current
Provisions for
contingencies 12 16
Asset
retirement obligation and dismantling of wind turbines 2 2
Environmental
remediation 2 2
16 20
12.31.2020
For
contingencies Asset
retirement obligation and dismantling of wind turbines For
environmental remediation
At the beginning of the year 139 22 3
Increases 21 2 -
Decreases (1) - -
Exchange differences on translation (15) - -
Reversal of unused
amounts (8) (3) -
Reclasification
liabilities associated to assets classified as held for sale (33) - -
At the end of the
year 103 21 3
12.31.2019
For
contingencies Asset
retirement obligation and dismantling of wind turbines For
environmental remediation
At the beginning
of the year 142 22 5
Increases 41 3 -
Exchange differences on translation (4) - -
Gain on monetary position, net (17) - -
Decreases (10) - (2)
Reversal of
unused amounts (13) (3) -
At
the end of the year 139 22 3
12.31.2018
For
contingencies Asset
retirement obligation For
environmental remediation
At the beginning
of the year 141 42 6
Increases 106 37 6
Reclasification - (18) -
Gain on monetary
position, net (52) (18) (2)
Decreases (23) (5) (5)
Reversal of
unused amounts (30) (16) -
At
the end of the year 142 22 5
11.5.1 Provision
for Environmental remediation The
Company is subject to extensive environmental regulations in Argentina. The Company’s management believes that its current
operations are in compliance with applicable environmental requirements, as currently interpreted and enforced, including regulatory
remediation commitments assumed. The Company undertakes environmental impact studies for new projects and investments and, to
date, environmental requirements and restrictions imposed on these new projects have not had any material adverse impact on Pampa’s
business. The
Company has performed a sensitivity analysis relating to the discount rate. The 1% increase or decrease in the discount rate would
not have a significant impact on the Company’s results of operations.
11.5.2 Asset
retirement obligations Pursuant
to the regulations in force in Argentina, where it develops its oil and gas exploration and production operations, the Company
is under an obligation to incur costs associated with the plugging and abandonment of wells. Furthermore, pursuant to the associated
usufruct agreements, the Company is under an obligation to decommission wind turbines in wind farms. The Company does not have
legally restricted assets for the cancellation of these obligations. The
Company has performed a sensitivity analysis relating to the discount rate. The 1% increase or decrease in the discount rate would
not have a significant impact on the Company’s results of operations.
11.5.3 Provision
for legal proceedings The
Company (directly or indirectly through subsidiaries) is a party to several civil, commercial, contentious administrative, tax,
custom and labor proceedings and claims that arise in the ordinary course of its business. In determining a proper level of provision,
the Company has considered its best estimate mainly with the assistance of legal and tax advisors. The
determination of estimates may change in the future due to new developments or unknown facts at the time of evaluation of the
provision. As a consequence, the adverse resolution of the evaluated proceedings and claims could exceed the established provision. The
Company has recorded provisions for civil, commercial, administrative, labor, tax and customs complaints brought against the Company
corresponding to atomized claims with individual unsubstantial amounts, as well as charges for judicial costs and expenses which,
as of December 31, 2020, amount to US$ 17 million. We
hereinafter detail the nature of significant proceedings for which provisions have been recorded as of December 31, 2019:
- Relevant Customs
Summary Proceedings - Gasoline Exports 11.6
Income tax and minimum notional income tax liability
Note 12.31.2020 12.31.2019
Non-current
Income tax, net of
witholdings and advances 10.6 131 10
Total
non current 131 10
Current
Income
tax, net of witholdings and advances 11 53
Total
current 11 53 11.7
Tax liabilities
12.31.2020 12.31.2019
Non-current
Sales
tax 2 1
Extraordinary
Canon - 3
Total
non-current 2 4
Current
Value
added tax 12 38
Municipal,
provincial and national contributions - 3
Personal
assets tax provision 1 3
Payment
plans 1 1
Municipal
taxes - 2
Tax
withholdings to be deposited 2 6
Royalties 4 4
Extraordinary
Canon 16 12
Other - 3
Total
current 36 72 11.8
Defined benefits plans The
main characteristics of benefit plans granted to Company employees are detailed below.
(i) Pension
and retirement benefits
(ii) Compensatory
plan: As
of December 31, 2020, 2019 and 2018, the most relevant actuarial information corresponding to the described benefit plans is the
following:
12.31.2020
Present
value of the obligation Fair
value of plan assets Net
liability at the end of the year
Liabilities
at the beginning 36 (5) 31
Items classified
in profit or loss
Current
services cost 3 - 3
Cost
for interest 16 (2) 14
Items classified
in other comprehensive
Actuarial
(gains) losses (3) 1 (2)
Benefit payments (2) - (2)
Reclasification
liabilities associated to assets classified as held for sale (10) - (10)
Gain
on monetary position, net (15) 2 (13)
At
the end 25 (4) 21
12.31.2019
Present
value of the obligation Present
value of assets Net
liability at the end of the year
Liabilities
at the beginning 40 (5) 35
Items classified
in profit or loss
Current
services cost 3 - 3
Cost
for interest 15 (2) 13
Items classified
in other comprehensive
Actuarial
(gains) losses (2) - (2)
Benefit payments (2) - (2)
Gain on monetary position,
net (18) 2 (16)
At
the end 36 (5) 31
12.31.2018
Present
value of the obligation Present
value of assets Net
liability at the end of the year
Liabilities at the beginning 47 (3) 44
Items classified
in profit or loss
Current
services cost 2 - 2
Cost
for interest 9 (1) 8
Past
services cost (5) - (5)
Items classified
in other comprehensive
Actuarial
(gains) losses 6 (2) 4
Benefit payments (3) - (3)
Gain on monetary position,
net (16) 1 (15)
At
the end 40 (5) 35 As
of December 31, 2020, 2019 and 2018, the breakdown of net liabilities per type of plan is as follows: a) US$ 12 million, US$ 21
million and US$ 24 million correspond to the Pension and Retirement Benefits Plan and b) US$ 9 million, US$ 10 million and US$
11 million correspond to the Compensatory Plan, respectively. Estimated
expected benefits payments for the next ten years are shown below. The amounts in the table represent the undiscounted cash flows
and therefore do not reconcile to the obligations recorded at the end of the year.
12.31.2020
Less
than one year 4
One
to two years 2
Two
to three years 2
Three
to four years 2
Four
to five years 2
Six
to ten years 10 Significant
actuarial assumptions used were as follows:
12.31.2020 12.31.2019 12.31.2018
Discount rate 4% 5% 5%
Salaries increase 1% 1% 1%
Average inflation 46% 27% 27% The
following sensitivity analysis shows the effect of a variation in the discount rate and salaries increase on the obligation amount:
12.31.2020
Discount rate:
4%
Obligation 27
Variation 2
10%
Discount rate: 6%
Obligation 23
Variation (2)
(9%)
Salaries increase: 0%
Obligation 24
Variation (1)
(4%)
Salaries increase: 2%
Obligation 26
Variation 1
5% The
sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is
unlikely to occur, and changes in some of the assumptions may be correlated. Therefore, the presented analysis may not be representative
of the actual change in the defined benefit obligation. The methods and types of assumptions used in preparing the sensitivity
analysis did not change compared to the prior period. 11.9
Salaries and social security payable
12.31.2020 12.31.2019
Non-current
Seniority
- based bonus - 3
Early
retirements payable - 1
Total
non-current - 4
Current
Salaries
and social security contributions 3 22
Provision
for vacations 7 17
Provision
for gratifications and annual bonus for efficiency 13 26
Total
current 23 65

12. FINANCIAL ASSETS AND LIABIL

12. FINANCIAL ASSETS AND LIABILITIES12 Months Ended
Dec. 31, 2020
Financial Assets And Liabilities Abstract
FINANCIAL ASSETS AND LIABILITIESNOTE 12 12.1 Financial assets at amortized cost
12.31.2020 12.31.2019
Non-current
Public securities (1) - 18
Term deposit 100 -
Total non-current 100 18
Current
Public securities (1) 25 54
Total current 25 54
(1) The public securities were received in accordance with the mechanism set forth by SGE Resolution No. 54/19 for the settlement of receivables under Natural Gas Surplus Injection Promotion Programs. See Note 2.4.3.1. 12.2 Financial assets at fair value through profit and loss
12.31.2020 12.31.2019
Non-current
Shares 11 11
Total non-current 11 11
Current
Government securities 204 113
Shares 29 8
Investment funds 92 244
Total current 325 365 12.3 T rade
and other receivables
Note 12.31.2020 12.31.2019
Non-Current
Receivables from oil and gas sales - 8
Trade receivables, net - 8
Non-Current
Tax credits 5 3
Related parties 17 29 53
Prepaid expenses - 1
Credit with RDSA - 35
Allowance for doubtful accounts - (35)
Other 9 14
Other receivables, net 43 71
Total non-current 43 79
Note 12.31.2020 12.31.2019
Current
Receivables from energy distribution sales - 226
Receivables from MAT 15 17
CAMMESA 178 168
Receivables from oil and gas sales 23 48
Receivables from petrochemistry sales 39 54
Related parties 17 4 6
Government of the PBA and CABA by Social Rate - 4
Other 4 10
Allowance for doubtful accounts (16) (33)
Trade receivables, net 247 500
Current
Tax credits 5 10
Advances to suppliers - -
Related parties 17 41 8
Prepaid expenses 4 2
Receivables for non-electrical activities 5 11
Financial credit 4 5
Guarantee deposits 3 5
Contractual penalty to collect 3 -
Insurance to recover 6 -
Expenses to be recovered 7 10
Credits for the sale of property, plant and equipment - 1
Credit with RDSA - 1
Other 16 14
Allowance for other receivables - (6)
Other receivables, net 94 61
Total current 341 561 Due to the short-term nature of trade and
other receivables, its book value is not considered to differ from its fair value. For non-current trade and other receivables, fair
values do not significantly differ from book values. The movements in the allowance for the impairment of trade receivables
are as follows:
Note 12.31.2020 12.31.2019 12.31.2018
At the beginning ### 68 34 26
Allowance for impairment 63 58 34
Utilizations (7) (13) (10)
Reversal of unused amounts (3) (2) (1)
Exchange differences on translation (2) (1) -
Gain on monetary position, net (28) (8) (15)
Reclasification to assets clasified as held for sales (75) - -
At the end of the year 16 68 34
Note 12.31.2020 12.31.2019 12.31.2018
At the beginning - 6 8 6
Allowance for impairment 2 1 7
Gain on monetary position, net - (1) (3)
Reversal of unused amounts (7) (2) (2)
Reclasification to assets clasified as held for sales (1) - -
At the end of the year - 6 8 12.4 Cash and cash equivalents
12.31.2020 12.31.2019
Banks 70 57
Investment funds 71 4
Time deposits - 164
Total 141 225 12.5 Borrowings
Note 12.31.2020 12.31.2019
Non-Current
Financial borrowings 75 161
Corporate bonds (1) 1,297 1,603
1,372 1,764
Current
Bank overdrafts 37 -
Financial borrowings 88 137
Corporate bonds 117 32
Related parties 17 - 14
242 183
Total 1,614 1,947
(1) Net of repurchase of own ONs As of December 31, 2020 and 2019, the fair
values of the Company’s Corporate Bonds amount approximately to US$ 1,309 million and US$ 1,436 million, respectively. Such values
were calculated on the basis of the determined market price of the Company’s corporate notes at the end of each year (fair value
level 1). The carrying amounts of short-term borrowings
approximate their fair value due to their short-term maturity. The other long-term borrowings were measured
at amortized cost, which does not differ significantly from its fair value. As of the date of issuance of these Consolidated
Financial Statements, the Company is in compliance with the covenants established in its indebtedness The movements in the borrowings are as follows:
Note 12.31.2020 12.31.2019 12.31.2018
At the beginning 1,947 2,177 1,683
Proceeds from borrowings 353 556 245
Payment of borrowings (300) (550) (240)
Accrued interest 176 185 179
Payment of borrowings' interests (201) (148) (133)
Net foreign currency exchange difference (18) 50 1,244
Results for the repurchase of corporate bonds 12.5.2 (43) (27) (2)
Costs capitalized in property, plant and equipment 11.1 10 17 8
Decrease through offsetting with trade receivables - (135) -
Cancellation through dividend compensation (12) - -
Gain on monetary position, net (43) (87) (794)
Repurchase and redemption of corporate bonds (155) (91) (13)
Reclasification liabilities associated to assets classified as held for sale (100) - -
At the end of the year 1,614 1,947 2,177 12.5.1 Details of borrowings:
Type of instrument Company Currency Residual value Interest Rate Expiration Book value as of 12.31.2020
Corporate bonds (1)
Serie 6 CB (2) PAMPA $ 76 Variable Badlar + 2.5% Aug-21 77
T Series CB (3) PAMPA US$ 389 Fixed 7.38% Jul-23 399
Class 1 CB (3) PAMPA US$ 636 Fixed 7.50% Jan-27 647
Serie 3 CB PAMPA US$ 293 Fixed 9.13% Apr-29 291
1,414
Financial loans (4)
PAMPA $ 18 Fixed 33% Apr-21 19
PAMPA $ 57 Variable Badlar + 7% may-21 61
PAMPA US$ 31 Variable Libor + 4.21% May-24 31
111
Other financial operations (5)
PAMPA US$ 2 Variable Libor Jul-21 2
PAMPA US$ 50 Variable Libor Aug-23 50
52
Bank overdrafts
PAMPA $ 36 Fixed Between 30% and 34% Jan-21 37
1,614
(1) In the months of July, October and November 2020, the Company paid at maturity Class 4, Class 5 and Series E CBs, the first two issued on April 30, 2020, for a face value of $ 1,238 million, $ 565 million and $ 575 million at a Badlar rate +3%, Badlar rate + 5% and Badlar rate + 0%, respectively.
(2) Issued on July 29, 2020.
(3) During the fiscal year ended December 31, 2020, the Company and its subsidiaries acquired Series T and Class 1 corporate bonds at their respective market values for a face value of US$ 148 million; therefore, the Company recorded profits for US$ 38 million, which are disclosed in the “Gain (Loss) on the repurchase of corporate bonds” line item under Other financial results. As of December 31, 2020, the Company, through its subsidiaries, held in its portfolio: Series T and Class I CBs for a face value of US$ 35 million and US$ 11 million, respectively.
(4) During the fiscal year ended December 31, 2020, the Company took on new financing with domestic financial entities, net of cancellations and early cancellations, for a total $1,600 million, and paid at maturity financing loans in the amount of US$ 92 million.
(5) On October 2, 2020, the Company was granted a credit facility for up to US$50 million at Libor rate plus 0.0%, which is secured by a Total Return Swap, the underlying asset of which is own CBs held in treasury by the Company for a total amount of US$185.9 million. Any disbursement requested by the Company under this agreement should be secured with term deposits held in BNP by the Company, and the owed principal may not exceed 95% of these funds. The cash flow generated by the assigned assets may be destined to: i) the extension of the above-mentioned credit facility; and/or ii) the cancellation of expenses, interest and/or disbursements. It is worth highlighting that BNP is not empowered to dispose of the Total Return Swap’s underlying asset, and may only use it to a limited extent to guarantee certain transactions, but may under no circumstances lose its condition as asset holder. The Company may cancel the agreement at any time, in whole or in part, without incurring any penalty, with no other requirement than the giving of notice by a reliable means or automatically in case any of the events of default stipulated in the agreement is verified. Finally, at the transaction’s maturity date, the counterparty should return to the Company the Total Return Swap’s underlying asset and any associated cash flow. The Company has received disbursements in the amount of US$ 51.5 million under certain credit facilities with BNP.
Type of instrument Company Currency Residual value Interest Rate Expiration Book value as of 12.31.2019
Corporate bonds (1)
2022 CB Edenor US$ 166 Fixed 9.75% 2022 139
Class E CB PAMPA $ 575 Fixed Badlar Nov-20 10
Class 1 CB (1) PAMPA US$ 687 Fixed 7.50% Jan-27 698
T Series CB (1) PAMPA US$ 487 Fixed 7.38% Jul-23 497
Serie 3 CB (1) PAMPA US$ 293 Fixed 9.13% Apr-29 291
1,635
Financial loans (2)
PAMPA US$ 84 Fixed Between 4.25% and 7.65% Jan-2020 to 88
PAMPA US$ 39 Variable 4.21% + Libor May-2024 39
PAMPA $ 7,775 Fixed Between 40% and 44.14% Apr-2021 to 146
Related parties 273
PAMPA US$ 13 Fixed 6.00% 2020 14
Financial loans
Edenor US$ 1,885 Fixed Libor + 4.27% Oct-20 25
25
1,947
(1) During the fiscal year ended December 31, 2019, the Company acquired own corporate bonds at their respective market values for a face value of US$ 62 million; therefore, the Company recorded consolidated profits for US$ 25 million, which are disclosed in the “Gain (Loss) on the repurchase of corporate bonds” line item under Other financial results. As of the closing of fiscal year
2019, Pampa held in its portfolio: Series T Corporate Bonds for a face value of US$ 14 million, Series 1 Corporate Bonds for
a face value of US$ 63 million and Series 3 Corporate Bonds for US$ 7 million, the latter issued on July 10, 2019.
(2) During the fiscal year ended December 31, 2019, the Company canceled banking debt (including pre-export finance facilities) for US$ 420 million and $ 550 million, and took on new debt for US$ 25 million and $ 8,349 million. 12.6. Trade and other payables
Note 12.31.2020 12.31.2019
Non-Current
Customer contributions - 3
Customer guarantees - 4
Trade payables - 7
ENRE Penalties and discounts - 64
Compensation agreements 6 7
Lease liability 10 12
Other payables 16 83
Total non-current 16 90
Current
Suppliers 92 212
CAMMESA - 155
Customer contributions - 1
Customer advances 2 7
Related parties 17 5 8
Trade payables 99 383
ENRE Penalties and discounts - 57
Related parties 17 - 5
Compensation agreements 1 3
Payment agreements with ENRE - 1
Lease liability 2 4
Advances received for sales of subsidiary 12 -
Other 2 1
Other payables 17 71
Total current 116 454
Due to the short-term nature of the trade
payables and other payables, their carrying amount is considered to be the same as their fair value, except non-current customer contributions. The fair values of non-current customer contributions
as of December 31, 2019 amount to US$ 0.8 million, respectively. The fair values are determined based on estimated discounted cash flows
in accordance with a market rate for this type of transactions. This fair value is classified as level 3. The book value of the compensation agreements
approximates their fair value given its valuation characteristics (Note 4.17). 12.7 Financial instruments by category The following chart presents financial instruments
by category:
As of December 31, 2020 Financial assets/liabilities at amortized cost Financial assets/liabilities at fair value through profit and losss Subtotal financial assets/liabilities Non financial assets/liabilities Total
Assets
Trade receivables and other receivables 366 3 369 15 384
Financial assets at amortized cost
Term deposit 100 - 100 - 100
Corporate securities 25 - 25 - 25
Financial assets at fair value through profit
Government securities - 204 204 - 204
Shares - 40 40 - 40
Investment funds - 92 92 - 92
Derivative financial instruments - - - - -
Cash and cash equivalents 70 71 141 - 141
Total 561 410 971 15 986
Liabilities
Trade and other liabilities 130 - 130 2 132
Borrowings 1,614 - 1,614 - 1,614
Derivative financial instruments - - - - -
Total 1,744 - 1,744 2 1,746
As of December 31, 2019 Financial assets/liabilities at amortized cost Financial assets/liabilities at fair value through profit and losss Subtotal financial assets/liabilities Non financial assets/liabilities Total
Assets
Trade receivables and other receivables 622 4 626 14 640
Financial assets at fair value through profit and loss
Government securities - 113 113 - 113
Shares - 19 19 - 19
Investment funds - 244 244 - 244
Derivative financial instruments - 4 4 - 4
Cash and cash equivalents 221 4 225 - 225
Total 843 388 1,231 14 1,245
Liabilities
Trade and other liabilities 408 7 415 129 544
Borrowings 1,947 - 1,947 - 1,947
Instrumentos financieros derivados - 3 3 - 3
Total 2,355 10 2,365 129 2,494 The categories of financial instruments have
been determined according to IFRS 9. The income, expenses, gains and losses derived
from each of the financial instrument categories are indicated below:
As of December 31, 2020 Financial assets/liabilities at amortized cost Financial assets/liabilities at fair value through profit and losss Subtotal financial assets/liabilities Non Financial assets/ liabilities Total
Interest income 9 - 9 - 9
Interest expense (164) - (164) (6) (170)
Foreign exchange, net 38 (35) 3 11 14
Results from financial instruments at fair value - 30 30 - 30
Gains (losses) from present value measurement 6 - 6 (4) 2
Other financial results 36 - 36 (5) 31
Total (75) (5) (80) (4) (84)
As of December 31, 2019 Financial assets/liabilities at amortized cost Financial assets/liabilities at fair value through profit and losss Subtotal financial assets/liabilities Non Financial assets/ liabilities Total
Interest income 72 3 75 - 75
Interest expense (163) - (163) (20) (183)
Foreign exchange, net 5 (14) (9) 3 (6)
Results from financial instruments at fair value - 88 88 - 88
Gains (losses) from present value measurement 55 - 55 - 55
Other financial results 32 - 32 2 34
Total 1 77 78 (15) 63
As of December 31, 2018 Financial assets/liabilities at amortized cost Financial assets/liabilities at fair value through profit and losss Subtotal financial assets/liabilities Non Financial assets/ liabilities Total
Interest income 76 5 81 - 81
Interest expense (157) - (157) (22) (179)
Foreign exchange, net (719) 23 (696) (84) (780)
Results from financial instruments at fair value - 44 44 - 44
Gains (losses) from present value measurement (74) - (74) - (74)
Other financial results (1) - (1) (2) (3)
Total (875) 72 (803) (108) (911) 12.8 Fair value of financial Instruments
The Company classifies the fair value measurements
of financial instruments using a fair value hierarchy, which reflects the relevance of the variables used to perform those measurements.
The fair value hierarchy has the following levels:
- Level 1: quoted prices (not adjusted) for identical assets or liabilities in active markets.
- Level 2: data different from the quoted prices included in Level 1 observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices).
- Level 3: Asset or liability data based on information that cannot be observed in the market (i.e., unobservable data).
As of December 31, 2020 Level 1 Level 2 Level 3 Total
Assets
Financial assets at fair value through
Government securities 204 - - 204
Shares 29 - 11 40
Investment funds 92 - - 92
Cash and cash equivalents
Investment funds 71 - - 71
Other receivables 72 - - 72
Total assets 468 - 11 479
As of December 31, 2019 Level 1 Level 2 Level 3 Total
Assets
Financial assets at fair value through
Government securities 113 - - 113
Shares 8 - 11 19
Investment funds 244 - - 244
Cash and cash equivalents
Investment funds 4 - - 4
Derivative financial instruments - 4 - 4
Other receivables 4 - - 4
Total assets 373 4 11 388
Liabilities
Derivative financial instruments - 3 - 3
Trade and other liabilities - 7 - 7
Total liabilities - 10 - 10 The value of the financial instruments negotiated
in active markets is based on the market quoted prices as of the date of these Consolidated Financial Statements. A market is considered
active when the quoted prices are regularly available through a stock exchange, broker, sector-specific institution or regulatory body,
and those prices reflect regular and current market transactions between parties that act in conditions of mutual independence. The market
quotation price used for the financial assets held by the Company is the current offer price. These instruments are included in Level
1. The fair value of financial instruments that
are not negotiated in active markets is determined using valuation techniques. These valuation techniques maximize the use of market observable
information, when available, and rely as little as possible on specific estimates of the Company. If all significant variables to establish
the fair value of a financial instrument can be observed, the instrument is included in Level 2. If one or more variables used to determine
the fair value cannot be observed in the market, the financial instrument is included in Level 3. The techniques used for the measurement of
assets at fair value with changes in income, classified as Level 2 and 3, are detailed below: - Derivative
Financial Instruments: calculated from variations between market prices at the closing date of the year, and the amount at the time of
the contract. - Shares:
they were determined based on Income approach through the Indirect Cash Flow method (net present value of expected future cash flows)
and the discount rates used were estimated taking the WAAC rate as a parameter.

13. EQUITY COMPONENTS

13. EQUITY COMPONENTS12 Months Ended
Dec. 31, 2020
Equity Components
EQUITY COMPONENTSNOTE
13 13.1
Share capital As
of December 31, 2020, the share capital amounts to $ 1,455 million, including $ 4 million treasury shares.
13.1.1 Share buyback programs Taking
into consideration the market volatility experienced as from 2018 and the persisting divergence between the Company’s share
price and the economic reality its assets currently or potentially have, which is detrimental to the interests of its shareholders,
and considering the Company’s history of strong cash position and fund availability, the Board of Directors has implemented
several share buyback programs, considering in each case that treasury shares may not exceed the 10% capital stock capitalization. During
fiscal year 2020, the Board of Directors approved Programs 6 and 7 for US$ 27 million and $ 3,600 million, with a maximum price
of US$ 13 per ADR, which have been completed and for which all repurchased shares have been canceled. Program
8 approved on October 30, 2020 for a maximum amount of US$ 30 million and an initial term of 120 calendar days, with a maximum
price of US$ 15 per ADR and $ 85.20 per common share, was in effect as of December 31, 2020, and has terminated as of the issuance
of these Financial Statements. As
of December 31, 2020, there are no own shares held in treasury under the buyback programs. Program
8 approved by the Company’s Board of Directors on March 1, 2021 for a maximum amount of US$ 30 million and an initial term
of 120 calendar days, under which shares may be acquired up to a maximum price of US$ 16 per ADR and $ 92.16 per common share,
is in effect as of the issuance of these Financial Statements. After the closing of the fiscal year, the Company directly and
indirectly acquired 34.7 million own shares for a value of US$ 18.6 million.
13.1.2 Stock
Compensation Plan During
fiscal year ended December 31, 2020, the Company delivered 0.7 million own shares as payments under the stock compensation plan
for officers and other key staff. As of December 31, 2020, the Company acquired 6 million own shares, out of which 2 million were
allocated to the compensation of senior managers and, as of the closing of the fiscal year, 4 million remained in treasury to
be delivered to employees under such plan (see Note 4.17).
13.1.3 Capital
reductions On
April 7, 2020 and December 10, 2020, the Company’s Extraordinary General Meeting of Shareholders resolved to reduce its
capital stock through the cancellation of 152 million and 141 million own shares, respectively, held in treasury by the Company
and its subsidiaries as of the last business day prior to such dates acquired under the share buyback programs. These reductions
are pending with the Public Registry.
13.2 Earnings per share 13.2.1
Basic Basic
earnings per share are calculated by dividing the result attributable to the Company’s equity interest holders by the weighted
average of outstanding common shares during the year. 13.2.2
Diluted Diluted
earnings per share are calculated by adjusting the weighted average of outstanding common shares to reflect the conversion of
all dilutive potential common shares. Potential
common shares will be deemed dilutive only when their conversion into common shares may reduce the earnings per share or increase
losses per share of the continuing business. Potential common shares will be deemed anti-dilutive when their conversion into common
shares may result in an increase in the earnings per share or a decrease in the losses per share of the continuing operations. The
calculation of diluted earnings per share does not entail a conversion, the exercise or another issuance of shares which may have
an anti-dilutive effect on the losses per share, or where the option exercise price is higher than the average price of ordinary
shares during the period, no dilutive effect is recorded, being the diluted earnings per share equal to the basic. As of December
31, 2020, 2019 and 2018, the Company does not hold any significant potential dilutive shares, therefore there are no differences
with the basic earning per share.
12.31.2020 12.31.2019 12.31.2018
Earning
for continuing operations attributable to the equity holders of the Company 132 594 85
Weighted average
amount of outstanding shares 40 48 52
Basic
and diluted earnings per share 3.30 12.38 1.63
(Loss) Earning
for discontinued operations attributable to the equity holders of the Company (499) 98 139
Weighted average
amount of outstanding shares 40 48 52
Basic
and diluted (loss) earnings per share from (12.48) 2.04 2.68
(Loss) earning
attributable to the equity holders of the Company (367) 692 224
Weighted average
amount of outstanding shares 40 48 52
Basic
and diluted (loss) earnings per share (9.18) 14.42 4.31 13.3
p Dividends Pursuant
to Law No. 27,430, enacted in December 2017, and the suspension provided for by Law No. 27,541 (Note 2.6.1.2), dividends distributed
to individuals, undivided estates or beneficiaries residing abroad, derived from profits generated during fiscal years beginning
on or after January 1, 2018 through December 31, 2021, are subject to a 7% withholding tax. The distribution of dividends is made
based on the Company’s Stand-Alone Financial Statements.

14. STATEMENT OF CASH FLOWS' CO

14. STATEMENT OF CASH FLOWS' COMPLEMENTARY INFORMATION12 Months Ended
Dec. 31, 2020
Statement Of Cash Flows Complementary Information
STATEMENT OF CASH FLOWS' COMPLEMENTARY INFORMATIONNOTE
14 14.1
Adjustments to reconcile net profit (loss) to cash flows generated by operating activities
Note 12.31.2020 12.31.2019 12.31.2018
Income tax 10.6 35 (130) (32)
Accrued interest 132 110 105
Depreciations
and amortizations 9,
10.1 and 10.2 205 186 165
Constitution
of allowances, net 10.4
and 10.1 9 2 2
Provision of
provisions and tax payables, net 10.4 5 4 12
Share of profit
from joint ventures and associates 5.4.2 (85) (101) (118)
Income from the
sale of companies 5.2.1 - - (28)
Accrual of defined
benefit plans 9,
10.1 and 10.2 11 11 3
Net exchange
differences 10.5 (14) 6 780
Result from measurement
at present value 10.5 (2) (55) 74
Changes in the
fair value of financial instruments 10.5 (19) (88) (44)
Results from
property, plant and equipment sale and decreases 10.4
and 10.3 - 5 4
Results for the
repurchase of corporate bonds 10.5 (38) (25) (2)
Impairment
of property, plant and equipment, intangible assets and inventories 1.2
and 11.1 139 62 32
Dividends
received 10.4 (1) (1) (1)
Compensation
agreements 10.1
and 10.2 1 (1) 5
Result
from the sale of shareholdings in companies, property, plant and equipment 5.3.2 - - (44)
Onerous
contract (Ship or pay) 10.4 - - 7
Gain on monetary
position, net 10.5 - - (403)
Other 2 (8) 4
Total
adjustments to reconcile net profit to cash flows generated by operating activities 380 (23) 521 14.2
Changes in operating assets and liabilities
12.31.2020 12.31.2019 12.31.2018
Decrease (Increase)
in trade receivables and other receivables 19 65 (59)
(Increase) Decrease
in inventories (6) (20) 2
Increase (Decrease)
in trade payables and other payables 3 46 (114)
(Decrease) Increase
in salaries and social security payable (1) (2) (1)
Decrease in defined
benefit plans (2) (1) (2)
(Decrease) Increase
in tax payables (20) 4 37
Decrease in provisions (5) (7) (51)
Income tax and
minimum notional income tax paid (5) (42) (14)
(Payments) Proceeds
from derivative financial instruments, net (5) 9 (24)
Total
changes in operating assets and liabilities (22) 52 (226) 14.3
Significant non-cash transactions
12.31.2020 12.31.2019 12.31.2018
Acquisition
of property, plant and equipment through an increase in trade payables (8) (36) (56)
Borrowing
costs capitalized in property, plant and equipment (10) (17) (7)
Compensation
of loans through the assignment of dividends 12 - -
Decrease
in asset retirement obligation provision through property, plant and equipment (3) (1) (34)
Dividends
pending collection 20 - -
Constitution
of guarantee of derivative financial instruments, net through the delivery of financial assets at fair value through profit
or loss (1) 3 (20)
Cancellation
of other credits for capital contributions in associates - (17) -
Compensation
of investments at amortized cost through the transfer of other credits - (126) -
Loan
compensation through the transfer of trade receivables - 135 -
Increase
of right-of-use assets through an increase in other debts - 13 -

15. CONTINGENT LIABILITIES AND

15. CONTINGENT LIABILITIES AND ASSETS12 Months Ended
Dec. 31, 2020
Contingent Liabilities And Assets
CONTINGENT LIABILITIES AND ASSETSNOTE
15 We
hereinafter detail the nature of significant proceedings as of December 31, 2019, not considered as probable by the Company based
on the opinion of the Company’s internal and external counselors. 15.1
Labor Claim – Compensatory Plan The
Company faces several legal proceedings associated with the Defined Benefit Plan “Compensatory Plan” (see Note 11.8).
We hereinafter describe the nature of currently-pending labor claims: - Claims by former employees not covered by the plan, seeking their inclusion. In one of the causes, the Company obtained a
favorable judgment, which has been appealed by the plaintiff.
- Claims by former
employees seeking a compensation under the plan on account of terminations due to changes in shareholding control.
- Claims on considering
that the index (IPC) used to update the plan benefits are ineffective to keep their “constant value”. In one of
the causes, the Company obtained a favorable judgment, which has been appealed by the plaintiff.
- Claims on an alleged
underfunding of the plan upon the elimination of the Company’s contributions based on earnings. 15.2
Tax claim
- Tax on Liquid Fuels
and Natural Gas: The
AFIP filed a claim in the amount of $ 54 million against the Company for an alleged omission in the payment of Taxes on Liquid
Fuels and Natural Gas during fiscal periods January 2006 through August 2011, plus compensatory interest and a penalty of $ 38
million for such omission. The tax entity supports its claim on the allegation that the tax benefit granted to sales to areas
declared exempt by the tax law has been misappropriated. The proceeding is currently being heard before the Federal Tax Court,
and the evidentiary period has been completed. 15.3
Environmental claims
- The Association
of Land Owners of Patagonia (ASSUPA) has brought a complaint for an indefinite amount against the Company and other companies
seeking the restoration of the environment to the state prior to the exploration, exploitation, production, storage and transportation
of hydrocarbon works conducted by the plaintiffs and the prevention of alleged future environmental impacts on certain areas
in the Austral Basin. The National Government and the Provinces of Santa Cruz and Tierra del Fuego have been summoned as third
parties. The proceeding is at the complaint answer stage.
- ASSUPA has instituted
a complaint before the CSJN against 10 companies, including the Company. The National Government and the Provinces of Buenos
Aires, La Pampa, Mendoza, Neuquén and Río Negro have been summoned as third parties. The main claim seeks that the
plaintiffs should be ordered to redress the alleged environmental damage caused by the hydrocarbon activity developed in the
Neuquina Basin and to set up the environmental restoration fund provided for by section 22 of the General Environmental Law.
Subsidiarily, and in case restoration is not possible, it seeks the redress of the allegedly sustained collective damages
for an amount estimated at US$ 547 million based on a United Nations Development Program report. The proceeding is in the
complaint answer stage.
- Beatriz Mendoza
and other 16 plaintiffs brought a complaint before the CSJN against the National Government, the Province of Buenos Aires,
the Government of the Autonomous City of Buenos Aires and 44 companies, including the Company, conducting industrial activities
along the Matanza-Riachuelo River Basin. The plaintiffs seek compensation for alleged damages sustained as a result of an
alleged environmental impact, its cessation, the environmental recomposition and redress, for an estimated amount of US$ 500
million for the financing of the Matanza-Riachuelo River Basin Environmental Management Plan aiming at the restoration of
the basin. The proceeding is in the third-party summoning stage.
- Inertis S.A. Has
filed a complaint against the Company for alleged damage to the environment in a lot owned by this company as a result of
the activities conducted by the Dock Sud Plant seeking the redress of alleged damages for a nominal amount estimated at $
1 million and US$ 1 million, or the difference between the value of the allegedly affected lot and its valuation. The proceeding
is in the evidentiary stage.
- Fundación SurfRider
Argentina has requested the performance of preliminary proceedings on account of alleged indications of environmental damage
in the City of Mar del Plata. The plaintiff seeks the recomposition of the alleged environmental damage having collective
impact, or the compensation for the alleged damages caused by all companies owning gas stations in the coastal area of the
City of Mar del Plata for an alleged fuel leakage from gas stations’ underground storage tanks into the water, soil
and marine system. The Foundation estimates damages in the amount of $ 200 million. The proceeding is pending the resolution
of the admissibility of CSJN’s jurisdiction.
- Some neighbors of
the Dock Sud area brought a complaint against 14 oil companies, including the Company, petrochemical companies and waste incineration
plants located in the Dock Sud Petrochemical Complex for an alleged damage to the environment and alleged individual damage
to their goods, health and morale. The CSJN determined it had jurisdiction over the environmental issue, and maintained the
civil and commercial jurisdiction regarding the compensation for the alleged damages.
- A neighbor of the
Province of Salta owning a lot where a joint venture made up of the plaintiffs (the Company and other companies) conducted
hydrocarbon activities seeks environmental protection and restoration for alleged damage caused by hydrocarbon prospecting,
exploration and/or exploitation activities or, alternatively, a compensation in case such environmental restoration is not
possible. The Province of Salta has been summoned as a third party. The proceeding is in the complaint answer stage and with
a negative conflict of jurisdiction.
- Owners of a lot
in the town of Garín, Province of Buenos Aires, seek the performance of preliminary proceedings for alleged indications
of damage to the environment in their place of residence which would result from an alleged leakage from the adjacent gas
station under the Company’s branding. Preliminary measures are being conducted in this proceeding.
- Neighbors of the
Province of Neuquén brought a proceeding against the Company for alleged environmental damage resulting from the hydrocarbon
exploration, exploitation, transportation and well abandonment activities in which that plaintiff has been taking part. Should
this not be feasible, they claim a compensation for alleged damages to support the Environmental Restoration Fund. Additionally,
they request the redress of alleged moral damages to be allocated to the Environmental Restoration Fund. The presence of all
involved parties has been properly verified, and the lawsuit has been referred to the administrative litigation jurisdiction.
- The Company initiated
a legal claim against the Province of La Pampa requesting the annulment and revocation of administrative acts through which
said Province through its Undersecretary of Hydrocarbons and Mining and its Undersecretariat of Environment, intends that
the Company carries out definitive abandonment of 13 hydrocarbon wells located within the Jagüel de los Machos Area that
were inactive by the time the concession belonged to the company -September 2015-, as well as the presentation of a plan for
the remediation of certain environmental liabilities. It is worth clarifying that an environmental audit was carried out at
the time of the reversal of the hydrocarbon area, and the deviations observed therein are currently corrected. The presence
of all involved parties under the lawsuit is currently being verified
- Plaintiff Martinez
Lidia and other three plaintiffs claim financial compensation for alleged damage to their health and property caused by the
alleged environmental affectation sustained as a result of living next to Puerto General San Martin petrochemical plant (Rosario-Santa
Fe). The proceeding is currently in the evidentiary stage. The evidentiary stage is closed and the setting of the date for
the hearing to choose by lot the Public Defender for the heirs of the deceased plaintiff is pending.
- A neighbor of the
Province of Buenos Aires brought a complaint against the Company seeking the removal of three fuel storage tanks and pumps
and the remediation and restoration of the soils where such tanks are located on account of an alleged environmental affectation.
The proceeding is in the evidentiary stage.
- Neighbors of the
Province of Santa Fe have brought a complaint against the Company for alleged environmental damage. The Company obtained a
favorable judgment, which has been appealed by the plaintiff. 15.4
Civil and Commercial Claims
- The “Consumidores
Financieros Asociación Civil Para Su Defensa” claim the nominal amount of US$ 3,650 million as compensation for
damages, Pampa, Petrolera Pampa S.A. and certain Pampa directors in office during 2016 being co-plaintiffs together with Petroleo
Brasileiro S.A. A complaint has been brought against Petrobras Brasil for the depreciation of the share quotation value as
a result of the “lava jato operation” and the so-called “Petrolao”, and the plaintiffs claim Pampa,
Petrolera Pampa S.A. and the directors’ joint and several liability alleging the acquisition of indirect control in
Petrobras Argentina S.A. may have thwarted the enforcement of a possible judgment favorable to the plaintiff (for up to the
amount of the price paid by Pampa for the acquisition of control over Petrobras Argentina S.A.). The plaintiff appealed the
Arbitration Court’s decision declaring the dismissal of the main claim upon the failure to pay the arbitration fee.
The Chamber of Appeals in Commercial Matters upheld the filed extraordinary appeal. On its part, Petróleo Brasileiro
S.A. filed an appearance, requested that the lack of substance of the filed appeal should be declared, and subsidiarily answered
it. The Company has still not been served notice of the appeal.
- The Company was
notified of the institution of a collective action in the City of Rio de Janeiro, Brazil, by a lawyer of that nationality,
Felipe Machado Caldeira, alleging that Petróleo Brasileiro S.A. has not conducted Petrobras Argentina’s sales process
pursuant to a competitive bidding process in accordance with Brazilian laws applicable to mixed public-private firms in Brazil,
for a nominal amount of R$ 1,000 million. In this proceeding, no specific accusation against Pampa has been filed. The proceeding
is currently suspended in the integration and complaint answer stage. Upon the death of the plaintiff and the Public Prosecution
Service’s statement that it is not interested in pursuing the complaint, a legal notice was published so that any citizen
may express its interest in pursuing it and judgment was rendered, thus terminating the proceeding, which judgment is final
and conclusive and deemed res judicata
- Messrs. Candoni,
Giannasi, Pinasco and Torriani brought arbitration complaints against the Company before the Buenos Aires Stock Exchange’s
Arbitration Court seeking to challenge the price and tender offer for the merger through absorption of Petrobras Argentina
S.A. into Pampa Energía S.A. for a nominal amount of $ 148 million. The complaints have been joined. The Court issued
a partial award upholding the challenge under the capital markets law used by the plaintiff to dispute the exchange ratio
used in the merger and dismissed the Company’s position, which stated that the proper course of action would be to challenge
the shareholders’ meeting pursuant to the Business Organizations Law. The Company filed an appeal against this partial
award and filed a motion for appeal and nullity which will be resolved by the Chamber of Appeals in Commercial Matters. This
Chamber upheld the motion for appeal and nullity filed by the Company, revoking the partial award and sustaining that the
proper proceeding for raising objections is to contest the shareholders’ meetings under the Business Organizations Law,
and not to challenge the fair price established in the Capital Markets Law for MTOs. This judgment is deemed final and conclusive
as the plaintiffs have not filed an extraordinary appeal before the CSJN.
- Petrobras Operaciones
S.A. (“POSA”) has filed an international arbitration claim against the Company before the International Chamber
of Commerce (“ICC”) on account of alleged breaches to the Assignment Agreement entered into between Petrobras
Argentina S.A. (currently Pampa Energía S.A.) and POSA in 2016 for the transfer of a 33.6% interest in the “Río
Neuquén” Concession. The breaches alleged by POSA in its arbitration claim consist of the failure to transfer certain
assets associated with the assigned interest, and differences in the calculation of adjustments in the assignment price. The
arbitration will be conducted according to the ICC Rules of Arbitration, the applicable law will be that of the Republic of
Argentina, and the seat of arbitration will be Buenos Aires, Argentina. The Company timely answered the arbitration claim,
and also filed a counterclaim for differences in the calculation of adjustments in the assignment price which were not paid
by POSA. The Arbitration Court that will hear the arbitration proceeding has been set up, and the Mission Statement and Procedural
Order No. 1 have been executed. We
hereinafter detail the nature of significant legal proceedings brought by the Company as of December 31, 2020 where the related
inflows of economic benefits are estimated to be probable by the Company. 15.5
Administrative claims
- CTLL (currently
Pampa) filed an administrative litigation complaint against the Federal Government for contractual breach during the January
2016-July 2016 period. CTLL claims that CAMMESA’s decision regarding the renewal and recognition of costs associated
with natural gas supply agreements should be reversed and that, subsidiarily, sustained damages should be redressed. The rendering
of judgment was requested. Later on, CTLL filed a new contentious administrative litigation complaint against the Federal
Government for contractual breach during the April 2016-October 2018 period. The Federal Government has answered the complaint.
- Upon the determination
of the expiration of the Veta Escondida block concession granted by the Province of Neuquén, the Company filed a declaratory
judgment action to achieve certainty under the original jurisdiction of the CSJN pursuant to section 322 of the Federal Code
of Civil and Commercial Procedure. Both parties agreed to suspend the proceeding to pursue a private settlement and, therefore,
the closing of the evidentiary stage will be requested.
- The Company brought
an administrative litigation action against the Road Authority (DNV) of the Province of Buenos Aires seeking the nullity of
DNV Resolution No. 1715/19 dated December 10, 2019, which modified the regulatory framework applicable to aerial and underground
power lines in Urban and Rural Road Areas of the Province of Buenos Aires, compliance with which may generate economic losses
to the Company. Based on the analysis of this Resolution, the Company withdrew the filed complaint, and keeps the right to
individually challenge the administrative actions ordered pursuant to DNV Resolution No. 1715/2019. 15.6 Civil and Commercial Claims
- The Company has filed an international arbitration claim against Petrobras International Braspetro B.V. on account of fraudulent representations and omissions associated with certain export transactions under the share purchase agreement executed on May 13, 2016, whereby the Company acquired 67.2% of Petrobras Argentina S.A.’s capital stock.The arbitration will be held pursuant to the ICC’s Arbitration Rules, the applicable law will be that of the State of New York and the seat of arbitration will be New York. Petrobras International Braspetro B.V. timely answered the request for arbitration and also filed a counterclaim seeking the payment of a percentage over the difference between the amount estimated for certain contingencies detected in the purchase process and the amount actually paid for them. The Arbitration Court that will hear the arbitration proceeding has been set up, and the Mission Statement and Procedural Order No. 1 have been executed.
- EcuadorTLC, in its capacity as assignee of the Ecuadorian company Petromanabí S.A., has filed an international arbitration proceeding against the Republic of Ecuador seeking the payment of 12% of the Settlement Value, the latter pursuant to the terms of the Hydrocarbon Exploration and Crude Oil Exploitation Participation Agreement in Block 18 entered into on December 19, 1995 and/or the Hollín Common Field Unified Exploitation Operating Agreement executed on August 7, 2002 —in both cases, as amended—. The arbitration will be conducted according to the Arbitration Rules of the United Nations Commission on International Trade Law, the applicable law will be the Ecuadorian law, and the seat of arbitration will be the City of Santiago de Chile. The procedure for the appointment of the arbitrators who will make up the arbitration court is currently underway.
- EcuadorTLC is currently making claims to Petroecuador as a result of certain breaches to the transportation agreement entered into on December 31, 2008 whereby the Ecuadorian Government undertook the crude oil transportation commitment through the OCP, to be charged to the oil transportation capacity hired by EcuadorTLC. To such effect, a mediation proceeding was brought before the Center for Mediation of the Attorney General’s Office of the Government of Ecuador sitting in the City of Quito, which ended without agreement. EcuadorTLC retains its claim rights for the aforementioned breaches
- The Company reached a settlement agreement with Petrominera Chubut Sociedad del Estado on account of the latter’s breach of Inversora Ingentis S.A.’s share purchase agreement and the decision issued by the BCBA’s Arbitration Court in this respect. In accordance with the agreement, as of December 31, 2020 the Company received a payment of US$ 3.5 million and has recognized a US$ 2.8 million profit under “Other operating income” in the Statement of Comprehensive Income.
- After the commissioning of PEPE II and PEPE III wind farms, certain defects were evidenced in the blades of some wind turbines, which resulted in their withdrawal from service for their subsequent repair and/or replacement. As a result of the failure, the generation capacity of the wind farms has been partially reduced. The Company submitted the corresponding claims to the supplier and the insurance company in order to move forward with the repair of the wind turbines and cover the incurred damages. In this sense, the Company, together with the wind turbines supplier, performed the tasks for the progressive repair of the wind turbines in 2020, with the exception of a wind turbine in PEPE II wind farm, which remains unavailable, and has disclosed a receivable with an offsetting entry in the item “Other operating income” of the Statement of Comprehensive Income in the amount of US$ 6.6 million regarding the claims made to the supplier and the insurance company. As of December 31, 2020, the Company has received payments for US$ 3.2 million on account of compensation for the claimed damages, and as of the issuance hereof, US$ 1.2 million are pending collection.

16. INVESTMENT COMMITMENTS

16. INVESTMENT COMMITMENTS12 Months Ended
Dec. 31, 2020
Investment Commitments
INVESTMENT COMMITMENTSNOTE
16 16.1
New generation projects Under
the National Government’s call for the expansion of the generation offer, the Company participates in the following thermal
generation projects: 16.1.1
PEPE II and PEPE III wind farms On
May 10, 2019, CAMMESA declared the commercial commissioning of PEPE II (Pampa Energía wind farm) for a 50.4 MW power
capacity and PEPE III (de la Bahía wind farm) for a 28.8 MW power capacity, the commercial commissioning for a 50.4 MW
power capacity of the latter being completed on June 10, 2019. PEPE II is located in an area adjacent to Mario Cebreiro Wind Farm,
in the area known as Corti, 20 kilometers from the City of Bahía Blanca. PEPE III is located in Coronel Rosales, near the
City of Bahía Blanca. Both projects called for an investment of US$ 130 million. The
production of both wind farms is sold under agreements between private parties pursuant to the Term Market of Electric Power from
Renewable Sources (MATER) Regime within the framework of SEE Resolution No. 281/17. Non-contracted energy will be remunerated
according to the spot market remuneration (see Note 2). 16.1.2
Genelba Thermal Power Plant The
Genelba Plus’ closing to combined cycle project was selected under SEE Resolution No. 926-E/17 within the framework of the
“Call for the Execution of New Co-generation and Closing to Combined Cycles Projects” provided for by SEE Resolution
No. 287-E/17. Upon the commercial commissioning of the closing to combined cycle, the Wholesale Power Purchase Agreement executed
with CAMMESA for a maximum committed capacity of 377 MW and a term of 15 years will enter into effect. On
June 12, 2019, CAMMESA declared the commercial commissioning of Genelba power plant’s fourth gas turbine for a power capacity
of up to 187.7 MW. Furthermore, CAMMESA enabled the 13 MW repowering of the GEBATG03 unit’s power capacity, as of June
1, 2019.These units are part of Genelba Plus’ closing to combined cycle project. CAMMESA
commissioned CTGEBA’s GEBATV02 effective as from 00:00 on July 2, 2020 for a gross capacity of 199 MW, milestone that marked
the beginning of operations of CTGEBA’s second combined cycle, a project where the Company invested approximately US$ 320
million to add 400 MW and employed an average of 1,500 people during the 30-month work period. With the completion of the new
combined cycle, the total installed capacity of CTGEBA amounts to 1,243 MW, becoming the largest thermal power plant in the country,
with an outstanding efficiency of 55% on average and the capacity to supply electricity to 2.5 million households in the Buenos
Aires metropolitan area. On
October 7, 2020, CAMMESA informed that, after performing certain improvements in the CC consisting of units GEBATG01, GEBATG02
and GEBATV01, a total additional power capacity of 11 MW was achieved. In
this way, the Company has fulfilled its commitments with CAMMESA under the electricity wholesale supply agreement entered into
pursuant to former SEE Resolution No. 287/17. In
line with the Company’s strategy to develop its core businesses, this milestone adds to the efforts put forth over the last
12 years to increase the power generation infrastructure, demanding investments for more than US$ 1,500 million, hence
becoming Argentina’s largest independent power producer, operating a total 4,955 MW of installed capacity, which represents
12% of the national grid. 16.1.3
CTB Regarding
the commitment to CTB’s closing to combined cycle project, detailed in Note 5.3.5, for increasing the installed power capacity
from 567 MW to 847 MW, with an estimated investment of US$ 200 million, on September 27, 2019, CTB and a joint venture made up
of SACDE and Techint Compañía Técnica Internacional S.A.C.E.I, executed an engineering, procurement, construction,
commissioning and turnkey agreement for the execution of the closing of the combined cycle at CTEB (the “EPC Agreement”). The
evolution of the measures resulting from the COVID-19 pandemic has affected the execution of the works for CTB’s closing
to combined cycle from the beginning. The stiffening of social lockdown measures experience from July 1, 2020 excluded private
infrastructure works from the exempted activities. Later on, pursuant to Resolutions No. 1197-MJGM-2020 and No. 1690-MJGM-2020
passed by the Buenos Aires Chief of the Cabinet of Ministers’s Office, as amended, the Company resumed the execution of
construction works following their critical path as from July 20, 2020. Within
this framework, on July 28, 2020, the Company and the Joint Venture made up of SACDE Sociedad Argentina de Construcción y
Desarrollo Estratégico S.A. and Techint Compañía Técnica Internacional S.A.C.E.I. entered into an addendum
to the construction agreement within the framework of the restrictions currently imposed as a result of the COVID-19 pandemic,
reaching an agreement on the impact on costs and works’ execution terms, and launching a new stage for the execution of
the closing to combined cycle. Even
trough, the commercial commissioning of the steam turbine is estimated for the first quarter of 2022, it is impossible to foresee
how measures will continue evolving or to which extent terms and costs may be affected in the future. 16.1.4
PEPE IV wind farm The
Company, as assignee of the rights under the PEPE IV project, requested to CAMMESA an extension of the term for the commercial
commissioning of the wind farm, as well as its relocation. The request was authorized by the SGE and, to make it effective, CAMMESA
asked the Company to meet certain requirements, including making several disbursements and increasing the originally granted guarantee
pursuant to SGE Resolution No. 230/19. However,
as a result of events occurred during 2019, including the devaluation of the peso and the increase in interest rates, which have
resulted in a growing macroeconomic instability, the Company requested an extension of the term to meet the above-mentioned requirements
in order to evaluate the feasibility of the project under the new conditions, as well as to negotiate changes proposed by work
contractors and equipment suppliers. In this context, and based on a thorough evaluation of the renewable projects in progress,
on September 11, 2019 the SSERyEE instructed CAMMESA to temporarily suspend the claims for non-compliance, and demanded the Company
to extend the validity of the US$ 12.5 million guarantee for a term of 180 days. On October 4, 2019, the Company complied with
the requested extension. On October 9, 2019, the SSERyEE canceled the suspension. On October 30, 2019, CAMMESA served on the Company
a formal demand requiring certain payments associated with the postponement of the commercial commissioning of the project and
its relocation under penalty of enforcing the guarantee. The Company rejected the demand served by CAMMESA awaiting SGE’s
consideration of the extension request, and on December 9, 2019 it entered into an agreement with CAMMESA establishing a negotiation
process to be developed until January 31, 2020 inclusive, during which CAMMESA should suspend the enforcement of the guarantee.
The agreement term was extended until January 31, 2021. Despite the expiration of the extension it is estimated that it will be
re-extended once CAMMESA receives the corresponding instruction from the SE. 16.2
Investment commitment for the exploration and exploitation of hydrocarbons As
of the issuance of these Consolidated Financial Statements, the Company has committed investments for an estimated total amount
of US$ 383 million, based on its participation, to be disbursed between 2020 and 2023, mainly regarding the Sierra Chata, Las
Tacanas, El Mangrullo, Rincón del Mangrullo and Chirete areas. In
turn, as mentioned in Note 2.3.2.1.2, the Company has committed an investment of approximately US$ 250 million over the four years
of the GasAr Plan.

17. RELATED PARTIES' TRANSACTIO

17. RELATED PARTIES' TRANSACTIONS12 Months Ended
Dec. 31, 2020
Related party transactions [abstract]
RELATED PARTIES' TRANSACTIONSNOTE 17
17.1 Operations related parties
(1) Purchases of goods and services (2) Fees for services (3) Other operating expenses and income (4)
2020 2019 2018 2020 2019 2018 2020 2019 2018 2020 2019 2018
Associates and joint ventures
CTB 2 1 - - - - - - - - - -
Greenwind 1 1 - - - - - - - - (1) -
OCP - - - - - - - - - - - (7)
Refinor 10 18 16 (5) (19) (34) - - - - - -
TGS 20 29 51 (24) (22) (21) - - - - - -
Transener - - 1 - - - - - - - - -
Other related parties
Fundación - - - - - - - - - (2) (2) (2)
SACDE - - 1 - - (2) - - - - 1 -
Salaverri, Dellatorre, Burgio & Wetzler - - - - - - (1) (1) (1) - - -
Other - - - - (1) (2) - - - - - -
33 49 69 (29) (42) (59) (1) (1) (1) (2) (2) (9)
(1)
(2)
(3)
(4)
Finance income (1) Dividends received Payment of dividends
2020 2019 2018 2020 2019 2018 2020 2019 2018
Associates and joint ventures
Ciesa - - - - 53 19 - - -
Citelec - - - 13 16 - - - -
OCP 1 - - 21 6 - - - -
TGS 3 3 3 - - - - - -
Other related parties
EMESA - - - - - - (9) (1) (2)
Other - - - 1 1 - - - -
4 3 3 35 76 20 (9) (1) (2)
(1)
17.2 Key management personnel remuneration During the years ended December 31, 2020 2019
and 2018, the total remuneration to executive directors accrued amounts to US$ 6.9 million (US$ 5.8 million for Directors' and Sindycs'
fees and US$ 1.1 million in the accrual of EBDA Compensation and Stock-based Compensation Plans), US$ 9.6 million (US$ 4.6 million in
Directors' and Sindycs' fees and US$ 5.0 million in the accrual of the Company-Value Compensation, EBDA Compensation and Stock-based Compensation
Plans) and US$ 31.2 million (US$ 4.1 million in Directors' and Sindycs' fees and US$ 27.1 million in the accrual of the Company-Value
Compensation, EBDA Compensation and Stock-based Compensation Plan), respectively.
17.3 Balances with related parties
As of December 31, 2020 Trade receivables Other receivables Trade payables
Current Non Current Current Current
Associates and joint ventures
Greenwind - - - 5
OCP - - 36 -
Refinor 2 - - -
TGS 2 29 5 -
4 29 41 5
As of December 31, 2019 Trade receivables Other receivables Trade payables Other payables Borrowings
Current Non Current Current Current Current Current
Associates and joint ventures
Citelec - - - - - 14
Greenwind - 4 - 5 - -
OCP - 15 - - 5 -
Refinor 2 - - 1 - -
SACME - - - 2 - -
TGS 4 34 5 - - -
Other related parties
SACDE - - 2 - - -
Other - - 1 - - -
6 53 8 8 5 14

18. LEASES

18. LEASES12 Months Ended
Dec. 31, 2020
Presentation of leases for lessee [abstract]
LEASESNOTE
18 18.1
Lessee The
Company leases a key part for thermal power plants operation for a 20-year term and has entered into certain oil services agreements
(mainly gas compression services) which, considering their characteristics, contain the lease of the assets for the rendering
of the services with terms ranging between 2 and 6 years. The
terms of the lease agreements are negotiated on an individual basis and comprise a broad range of terms and conditions. The
evolution of right-of-use assets and lease liabilities recognized as of December 31, 2020 and 2019 is disclosed below: 18.1.1
Right of use assets
Original
values
Reclasification
to assets clasified as held
Type
of good At
the beginning Increase At
the end
(1)
Machinery
and equipment 13 - - 13
Buildings 7 3 (10) -
Total
at 12.31.2020 20 3 (10) 13
Total
at 12.31.2019 - 20 - 20
Depreciation
Reclasification
to assets clasified as held
Type
of good At
the beginning For
the year At
the end
Machinery
and equipment (2) (1) - (3)
Buildings (2) (4) 6 -
Total
at 12.31.2020 (4) (5) 6 (3)
Total
at 12.31.2019 - (4) - (4)
Net
book values
Type
of good At
the end At
12.31.2019
Machinery and
equipment 10 11
Buildings - 5
Total
at 12.31.2020 10
Total
at 12.31.2019 16 (1)
18.1.2
Lease liabilities
12.31.2020 12.31.2019
At the beginning
of the year 16 -
Incorporation by adoption of IFRS 16 - 8
Increases 4 13
Discounted value
measurement (1) - 3
Payments (10) (5)
Reclasification to liabilities clasified as
held for sales (4) -
Exchange differences on translation 5 (3)
At the end of the
year 11 16 (1)
As
of December 31, 2020 and 2019, this liability is disclosed under Other current payables in the amount of US$ 2 million and US$
4 million and Other non-current payables for US$ 10 million and US$ 12 million, respectively. The
following table includes an analysis of the Company lease liabilities, grouped according to their maturity dates. The amounts
shown in the table are the contractual undiscounted cash flows:
12.31.2020
Three months to one year 1
One to two years 1
Two to three years 2
Three to four years 2
Four to five years 2
More than five years 14
Total 22 18.1.3
Short-term or low value leases As
of December 31, 2020 and 2019, the Company has recognized administrative costs and expenses in the amount of US$ 4 and US$ 10 million
on account of lease payments associated with short-term leases and low-value underlying assets, respectively.
18.2 Lessor Financial
leases Corresponding
to the financing granted to TGS for the sale of certain property, plant and equipment belonging to the Oil & Gas business
segment. This agreement was entered into on August 11, 2016, and consists of the collection of 119 monthly consecutive installments
of US$ 623 thousand, without considering taxes, and a purchase option for a like amount payable at the end of the 120 months of
the contract life. As
of December 31, 2020 and 2019, this receivable is disclosed under Other current receivables in the amount of US$ 5 million and
US$ 5 million, respectively and under Other non-current receivables for US$ 29 million and US$ 34 million, respectively. The
following table includes an analysis of the Company receivable, grouped according to its maturity dates. The amounts shown in
the table are the contractual undiscounted cash flows:
12.31.2020
Less than three months 1
Three months to one year 4
One to two years 5
Two to three years 6
Three to four years 6
Four to five years 7
More than five years 4
Total 33

19. DOCUMENTATION KEEPING

19. DOCUMENTATION KEEPING12 Months Ended
Dec. 31, 2020
Documentation Keeping
DOCUMENTATION KEEPINGNOTE
19 On
August 14, 2014, the National Securities Commission issued General Resolution No. 629, which introduced modifications to
the provisions applicable to the keeping and conservation of corporate and accounting books and commercial documentation. To such
effect, the Company and its subsidiary Edenor, have sent non-sensitive work papers and information corresponding to the periods
not covered by the statute of limitations for their keeping in the Administración de Archivos S.A (AdeA)’s data warehouse
located at Ruta 36, km 34.5, Florencio Varela, Provincia de Buenos Aires and in the Iron Mountain Argentina S.A.’s data
warehouses located at the following addresses:
- Azara 1245 –C.A.B.A.
- Don Pedro de Mendoza
2163 –C.A.B.A.
- Amancio Alcorta
2482 C.A.B.A.
- San Miguel de Tucumán
601, Carlos Spegazzini, Municipality of Ezeiza, Province of Buenos Aires. A
list of the documentation delivered for storage, as well as the documentation provided for in Article 5.a.3) Section I, Chapter
V, Title II of the PROVISIONS (2013 regulatory provisions and amending rules), is available at the Company headquarters.

20. OIL AND GAS RESERVES (Infor

20. OIL AND GAS RESERVES (Information not covered by the auditors' report)12 Months Ended
Dec. 31, 2020
Oil And Gas Reserves
OIL AND GAS RESERVES (Information not covered by the auditors' report)NOTE
20 The
table below presents the estimated proved reserves of oil (including crude oil, condensate and LNG) and natural gas, by geographic
area as of December 31, 2020.
Proved
Developed Proved
Undeveloped Total
Proved Reserves
Oil and LNG (1) Natural
Gas (2) Oil and LNG (1) Natural
Gas (2) Oil and LNG (1) Natural
Gas (2)
Argentina 7,761 10,534 5,765 11,256 13,526 21,790
Total at 12.31.2020 7,761 10,534 5,765 11,256 13,526 21,790 (1)
In thousands of barrels. (2)
In millions of cubic meters.

21. SUBSEQUENT EVENTS

21. SUBSEQUENT EVENTS12 Months Ended
Dec. 31, 2020
Disclosure of non-adjusting events after reporting period [abstract]
SUBSEQUENT EVENTSNOTE
21: GasAr
Plan On
March 9, 2021, Resolution No. 169/21 was published in the BO, awarding the volumes of natural gas offered under the GasAr Plan
- Round II call for tenders. In this case, the Company was awarded with a volume of 0.70 million m3/day, 0.90 million m3/day and
1 million m3/day for the months of June, July and August-September 2021, respectively, as well as 0.86 million m3/day to meet
the winter peak for years 2022 through 2024, at a price of US$ 4.68 MMbtu. With
this offer, Pampa's injection commitment increases to 9 million m3/day for winter periods 2021-2024 which, compared to 2020, represents
a 15% growth in annual production and 28% in the winter period, the months of greatest need for gas supply in the country.

4. ACCOUNTING POLICIES (Policie

4. ACCOUNTING POLICIES (Policies)12 Months Ended
Dec. 31, 2020
Disclosure of voluntary change in accounting policy [abstract]
New accounting standards, amendments and interpretations issued by the IASB effective as of December 31, 2020 and adopted by the Company4.1 New accounting standards, amendments and
interpretations issued by the IASB effective as of December 31, 2020 and adopted by the Company The
Company has applied the following standards and / or amendments for the first time as of January 1, 2020:
- Conceptual Framework
(issued in March 2018).
- IFRS 3 “Business
Combinations” (amended in October 2018).
- IAS 1 “Presentation
of Financial Statements” and NIC 8 “Accounting Policies, Changes in Accounting Estimates and errors” (amended
in October 2018).
- IFRS 9 “Financial
Instruments”, NIC 39 “Financial Instruments: Presentation” and IFRS 7 “Financial Instruments: Disclosures”
(amended in September 2019).
- IFRS 16 “Leases”
(amended in May 2020) The
application of the detailed standards and amendments did not have any impact on the results of the operations or the financial
position of the Company.
New standards, amendments and interpretations issued by the IASB not yet effective and which have not been early adopted by the Company4.2 New standards, amendments and interpretations
issued by the IASB not yet effective and which have not been early adopted by the Company
- IFRS 17 -“Insurance
Contracts”: issued in May 2017 and modified in June 2020. It supersedes IFRS 4, introduced in 2004 as an interim standard,
which gave companies dispensation to carry on accounting for insurance contracts using national accounting standards, thus
resulting in several application approaches. IFRS 17 sets the principles for the recognition, measurement, presentation and
disclosure of information associated with insurance contracts and is applicable as from January 1, 2023, allowing for its
early adoption for entities already applying IFRS 9 and IFRS 15. The Company estimates that its application will not have
a significant impact on the Company’s operating results or financial position.
- IAS 1 - “Presentation
of financial statements”: amended in January and July 2020. It incorporates amendments to the classification of liabilities
as current or non-current. Amendments are applicable to fiscal years starting on or after January 1, 2023, allowing for early
adoption. Its application will not have a significant impact on the Company’s operating results or financial position.
- IFRS 3 – “Business
Combinations”: amended in October 2020. It incorporates references to the definitions of assets and liabilities of the
new Conceptual Framework and clarifications associated with contingent assets and liabilities incurred separately from those
taken on in a business combination. It applies to business combinations as from January 1, 2022, and allows for its early
adoption.
- Annual Improvements
to IFRS Standards – 2018-2020 Cycle: amendments were issued in May 2020 and are applicable to annual periods starting
as from January 1, 2022. The Company estimates that their application will not have a significant impact on the Company’s
operating results or financial position.
- IAS 16 – “Property,
Plant and Equipment”: amended in May 2020. It incorporates modifications on the recognition of inventories, sales and
costs of items produced while bringing an item of property, plant and equipment to the location and the conditions necessary
for it to be capable of operating in the manner intended. Amendments are applicable to fiscal years starting on or after January
1, 2022, allowing for early adoption. The Company is currently analyzing the impact of the application of these modifications
in its operating results or financial position.
- IAS 37 – “Provisions,
Contingent Liabilities and Contingent Assets”: amended in May 2020. It clarifies the scope of the concept of fulfillment
cost of an onerous contract. Amendments are applicable to fiscal years starting on or after January 1, 2022, allowing for
early adoption. The Company estimates that its application will not have a significant impact on the Company’s operating
results or financial position.
- Amendments to IFRS
9 – “Financial Instruments”, IAS 39 – “Financial instruments: Presentation” and IFRS 7
– “Financial Instruments: Disclosures”, IFRS 4 – “Insurance Contracts” and IFRS 16 –
“Leases”: amended in August 2020. It incorporates guidelines for the measurement of financial assets and liabilities
at amortized cost affected by the reform in the reference interest rate. Amendments are applicable to fiscal years starting
on or after January 1, 2021. The Company is currently analyzing the impact of the application of these modifications in its
operating results or financial position.
Effects of changes in foreign exchange rates4.3 Effects of changes in foreign exchange rates 4.3.1
Functional and presentation currency The
information included in these Consolidated Financial Statements is recorded in U.S. Dollars, which is the Company’s functional
currency, that is, the currency of the primary economic environment where the entity operates. 4.3.2
Foreign-currency transactions and balances Foreign
currency transactions are translated into the functional currency at the exchange rates prevailing on each transaction date or
valuation date, when items are remeasured. Foreign exchange gains and losses arising on the settlement of monetary items and on
translating monetary items at the closing of the fiscal year using year-end exchange rate are recognized within the financial
results in the statement of comprehensive income, with the exception of capitalized amounts. 4.3.3
Group companies’ translation into functional currency The
results and financial position of subsidiaries, joint ventures and associates whose functional currency is the Argentine Peso,
a currency of a hyperinflationary economy, are translated into the Company’s functional currency using the year-end exchange
rate. The results generated by the application of IAS 29 adjustment mechanism for hyperinflationary economies, on the opening
equity measured in functional currency are recognized under “Other comprehensive income”. 4.3.4
Classification of Other comprehensive income within the Company’s equity The
Company classifies and directly accumulates within equity, in the retained earnings line, the results generated by the application
of the IAS 29 adjustment mechanism on the opening retained earnings, while the remaining results are presented in a separate component
of equity and accumulated until the disposal of the foreign operation in “Other comprehensive income”, in accordance
with IAS 21.
Principles of consolidation and equity accounting4.4 Principles of consolidation and equity accounting 4.4.1
Subsidiaries Subsidiaries
are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct
the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
The Group cease consolidation of entities from the date that control ceases. The
acquisition method of accounting is used to account for business combinations by the Group (see Note 4.4.5 below). Intercompany
transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also
eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries
have been changed when necessary to ensure consistency with the policies adopted by the Group. Non-controlling
interests in the results and equity of subsidiaries are shown separately in the Consolidated Statement of Comprehensive Income,
Consolidated Statement of Changes in Equity and Consolidated Statement of Financial Position respectively. 4.4.2
Associates Associates
are all entities over which the group has significant influence but not control or joint control. This is generally the case where
the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method
of accounting (see Note 4.4.4 below), after initially being recognized at cost. 4.4.3
Joint arrangements Investments
in joint arrangements are classified as either joint operations or joint ventures, according IFRS 11 “ Joint Arrangements” 4.4.3.1
Joint operations The
Company recognizes its direct right to the assets, liabilities, incomes and expenses of joint operations and its share of any
jointly held or incurred assets, liabilities, incomes and expenses. These have been incorporated in the Consolidated Financial
Statements under the appropriate headings. 4.4.3.2
Joint ventures Interests
in joint ventures are accounted for using the equity method (see Note 4.4.4 below), after initially being recognized at cost. 4.4.4
Equity Method Under
the equity method of accounting, the investments are initially recognized at cost and adjusted thereafter to recognize the Group’s
share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in
other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and
joint ventures are recognized as a reduction in the carrying amount of the investment. When
the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, together with
any long-term interests that, in substance, form part of the net investment, the Group does not recognize further losses, unless
it has incurred obligations or made payments on behalf of the other entity. Unrealized
gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the group’s
interest in these entities. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of
the asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency
with the policies adopted by the Group. The
carrying amount of equity accounted investments is tested for impairment in accordance with the policy described below in Note
4.9. 4.4.5
Business combinations The
acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or
other assets are acquired. The consideration transferred for the acquisitions comprises:
(i) the fair value of
the transferred assets,
(ii) the liabilities
incurred to the former owners of the acquired business,
(iii) the equity interests
issued by the group,
(iv) the fair value of
any asset or liability resulting from a contingent consideration arrangement, and
(v) the fair value of
any pre-existing equity interest in the subsidiary. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair
values at the acquisition date. The group recognises any non-controlling interest in the acquired entity on an acquisition-by-acquisition
basis at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. Acquisition-related
costs are expensed as incurred. The value of the goodwill represents the excess of: Where
settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value
as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a
similar borrowing could be obtained from an independent financier under comparable terms and conditions. Contingent
consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently
remeasured to fair value with changes in fair value recognised in profit or loss. If
the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity
interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement
are recognised in profit or loss. The
Group has up to 12 months to finalize the accounting for a business combination. Where the accounting for a business combination
is not complete by the end of the year in which the business combination occurred, the Group reports provisional amounts. 4.4.6
Changes in ownership interests The
Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners
of the group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling
interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling
interests and any consideration paid or received is recognized in “Other reserves” within equity attributable to owners
of the Company. When
the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant
influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognized in
profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive
income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities.
This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. If
the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only
a proportionate share of the amounts previously recognized in other comprehensive income are reclassified to profit or loss where
appropriate.
Segment reporting4.5 Segment reporting Operating
segments are reported in a manner consistent with the internal reporting provided to the Executive committee. The
Executive Committee, is the highest decision-making authority, is the person responsible for allocating resources and setting
the performance of the entity’s operating segments, and has been identified as the person/ body executing the Company’s
strategic decisions. In
segmentation the Company considers transactions with third parties and intercompany operations, which are done on internal transfer
pricing based on market prices for each product.
Property, plant and equipment4.6 Property, plant and equipment Property,
Plant and Equipment is measured following the cost model. It is recognized at acquisition cost less depreciation a less any accumulated
impairment. Subsequent
costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance
are charged to profit or loss during the reporting period in which they are incurred. The
cost of work in progress whose construction will extend over time includes, if applicable, the computation of financial costs
accrued on loans granted by third parties and other pre-production costs, net of any income obtained from the sale of commercially
valuable production during the launching period. Works
in progress are valued according to their degree of progress. Works in progress are recorded at cost less any loss due to impairment,
if applicable. Assets’
residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each year. An asset’s carrying
amount is written down immediately to its recoverable amount if the asset´s carrying amount is greater than its estimated
recoverable amount. Gains
and losses on disposals are determined by comparing the sale price with the carrying amount, stated in terms of the measuring
unit current at the disposal date.
4.6.1 Depreciation
methods and useful lives The
group depreciates productive wells, machinery and camps in the oil and gas production areas according to the units of production
method, by applying the ratio of oil and gas produced to estimated proved developed oil and gas reserves. The acquisition cost
of property with proved reserves is depreciated by applying the ratio of oil and gas produced to estimated proved oil and gas
reserves. Acquisition costs related to properties with unproved reserves is valued at cost with recoverability periodically assessed
on the basis of geological and engineering estimates of possible and probable reserves that are expected to be proved over the
life of each concession. Machinery
and generation equipment (including any significant identifiable component) are depreciated under the unit of production method. The
group´s remaining items of property, plant and equipment (including any significant identifiable component) are depreciated
by the straight-line method based on estimated useful lives, as detailed below: Buildings:
50 years Vehicles:
5 years Furniture,
fittings and communication equipment: 5- 20 years Computer
equipment and software: 3 years Tools:
10 years Gas
Plant and Pipeline: 20 years If
appropriate, the depreciation method is reviewed and adjusted at the end of each year. 4.6.2
Asset retirement obligations Estimated
future costs of asset retirement obligations on well abandonment in oil and gas areas and wind turbines decommissioning in wind
farms, discounted at a risk adjusted rate, are capitalized in the cost of the assets and depreciated using the units of production
method. Additionally, a liability at the estimated value of the discounted amounts payable is recognized. Changes in the measurement
of asset retirement obligations that result from changes in the estimated timing, amount of the outflow of resources required
to settle the obligation, or the discount rate, are added to, or deducted from, the cost of the related asset. If a decrease in
the liability exceeds the carrying amount of the asset, the excess is recognized immediately in profit or loss.
Intangible assets4.7 Intangible assets
4.7.1 Goodwill Goodwill
is the result of the acquisition of subsidiaries. Goodwill represents the excess of the acquisition cost over the fair value of
the equity interest in the acquired entity held by the company on the net identifiable assets acquired at the date of acquisition. For
impairment testing, goodwill acquired in a business combination is allocated from the acquisition date to each of the acquirer’s
CGU or group of CGUs that are expected to benefit from the synergies of the combination. Each unit or group of units that goodwill
is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes.
4.7.2 Concession
arrangements Concession
arrangements corresponding to Edenor and hydroelectric generation plants Diamante and Nihuiles are not under the scope of the
guidelines of IFRIC 12 “Service Concession Arrangements”. These
concession agreements meet the criteria set forth by the IFRSs for capitalization less depreciation a less any accumulated impairment.
They are amortized following the straight-line method based on each asset’s useful life, which corresponds to the life of
each concession agreement.
4.7.3 Identified
intangible assets in acquired investments Corresponds
to intangible assets identified at the moment of the acquisition of companies. Identified assets meet the criteria established
in IFRS for capitalization less depreciation a less any accumulated impairment. They are amortized by the straight-line method
according to the useful life of each asset, considering the estimated way in which the benefits produced by the asset will be
consumed.
Assets for oil and gas exploration4.8 Assets for oil and gas exploration The
Company uses the successful efforts method of accounting for its oil and gas exploration and production activities. This method
involves the capitalization of: (i) the cost of acquiring properties in oil and gas exploration and production areas; (ii) the
cost of drilling and equipping exploratory wells that result in the discovery of commercially recoverable reserves; (iii) the
cost of drilling and equipping development wells, and (iv) the estimated asset retirement obligations (see Note 4.6.2). According
to the successful efforts method of accounting, exploration costs (including geological and geophysical costs), excluding exploratory
well costs, are expensed during the period in which they are incurred. Drilling costs of exploratory wells are capitalized until
it is determined that proved reserves exists and they justify the commercial development. If reserves are not found, such drilling
costs are expensed. Occasionally, an exploratory well may determine the existence of oil and gas reserves but they cannot be classified
as proved when drilling is complete. In those cases, such costs continue to be capitalized insofar as the well has allowed determining
the existence of sufficient reserves to warrant its completion as a production well and the Company is making sufficient progress
in evaluating the economic and operating feasibility of the project.
Impairment of non-financial long-lived assets4.9 Impairment of non-financial long-lived assets Intangible
assets that have an indefinite useful life and goodwill are not subject to amortization and are tested annually for impairment,
or more frequently if events or changes in circumstances indicate that they might be impaired. The
remaining non-financial long-lived assets are tested for impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal
and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows which are largely independent of the cash inflows from other assets or groups of assets (CGU). Non-financial
long-lived assets, other than goodwill, that have been impaired are reviewed for possible reversal of the impairment at the end
of each reporting period.
Financial assets4.10 . Financial assets
4.10.1 Classification The
Group classifies its financial assets in the following categories:
(i) those that are subsequently
measured at fair value (either through other comprehensive income or through profit or loss), and
(ii) those that are subsequently
measured at amortised cost. The
classification depends on the entity’s business model for managing the financial assets and the contractual cash flow characteristics. Gains
and losses from financial assets measured at fair value, will be recorded in the Statement of Comprehensive Income or in Statement
of Other Comprehensive Income. Investments
in equity instruments are measured at fair value. For those investments that are not held for trading, the Company may make an
irrevocable election at initial recognition to present subsequent changes in other comprehensive income. The Company's election
was to recognize changes in fair value through profit and loss. The
company reclassifies financial assets when and only when it changes its business model for managing those financial assets.
4.10.2 Recognition The
conventional purchases and sales of financial assets are accounted for at trade date, that is, the date on which the Company undertakes
to purchase or sell the asset, or at settlement date. Financial assets are derecognized when contractual rights to the cash flows
from the financial assets have expired or been transferred, and the Company has substantially transferred all risks and rewards
of ownership of the asset.
4.10.3 Measurement
At
initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. A
gain or loss on a debt investment that is subsequently measured at fair value and is not part of a hedging relationship is recognised
in profit or loss and disclosed in “Changes in the fair value of financial instruments” within “Other financial
Results. A gain or loss on a debt investment that is subsequently measured at amortised cost and is not part of a hedging relationship
is recognized in profit or loss when the financial asset is derecognised or impaired and through the amortization process using
the effective interest rate method. The
Group subsequently measures equity investments at fair value. Dividends from such investments continue to be recognized in profit
or loss as long as they represent a return on investment.
4.10.4 Impairment
of financial assets The
Company assesses the expected credit losses related to its financial instruments at amortized cost and financial instruments at
fair value through other comprehensive income, if applicable. The
Company applies the simplified approach allowed by IFRS 9 to measure expected credit losses for trade receivables and other receivables
with similar risk characteristics. For this purpose, receivables are grouped by business segment and based on shared credit risk
characteristics and expected credit losses are determined based on rates calculated for different ranges of default days from
the due date. The
expected loss rates are based on the sales collection profiles over a period of 24 months before the end of each year, considering
historical credit losses experienced within this period that are adjusted, if applicable, to reflect forward-looking information
that could affect the ability of customers to settle the receivables.
4.10.5 Offsetting
of financial instruments Financial
assets and liabilities are offset, and the net amount reported in the consolidated statements of financial position, when there
is a legally enforceable right to offset the recognized amounts, and there is an intention to settle on a net basis, or realize
the asset and settle the liability simultaneously.
Trade and other receivables4.11 Trade and other receivables Trade receivables and other receivables
are recognized at fair value and subsequently measured at amortized cost, using the effective interest method, less provision for
impairment, if applicable. The Company recognises provisions
for impairment on trade and other receivables based on expected credit loss model described in Note 4.10.4. Trade receivables are
written off when there is no reasonable expectation of recovery. The Company considers the following default indicators: i) voluntary
reorganization proceedings, bankruptcy or initiation of judicial demands; ii) insolvency implying a high impossibility of collection
and iii) past due balances greater than 90 days. Where applicable, allowances for
doubtful tax credits have been recognized based on estimates on their uncollectibility within their statutory limitation period,
taking into consideration the Company’s current business plans.
Derivative financial instruments and hedging account4.12 Derivative financial instruments and hedging account Derivative
financial instruments are measured at fair value, determined as the amount of cash to be collected or paid to settle the instrument
as of the measurement date, net of any prepayment collected or paid. Fair value of derivative financial instruments traded in
active markets is disclosed based on their quoted market prices and fair value of instruments that are not traded in active markets
is determined using different valuation techniques. Subsequent accounting of changes in fair value depends on whether the derivative
is designated as a hedging instrument and, if so, the nature of the item being hedged. The Company may designate derivative financial
instruments in the following categories:
(i) fair value hedge
of recognized assets or liabilities or over firm commitment (fair value hedge);
(ii) cash flow hedges
of a particular risk associated with recognized assets and liabilities and highly probable future transactions (cash flow
hedges), or
(iii) net investment hedge
in foreign operation (net investment hedges). At
the beginning of the hedge relationship, the Group documents the economic relationship between the hedging instruments and the
hedged items, even if it is expected that changes in the cash flows of the hedging instruments offset changes in the cash flows
of the hedged items. The Group documents its objective and risk management strategy to carry out its hedging operations. Changes
in the measurement of derivative financial instruments designated as cash flow hedge, which have been determined as effective,
are recognized in equity. The gain or loss related to the ineffective portion is recognized immediately in profit or loss. Changes
in the measurement of derivative instruments that do not qualify for hedge accounting are recognized in profit or loss. The
Company has not formally designated financial instruments as hedging instruments.
Inventories4.13 Inventories This
line item includes crude oil stock, raw materials, work in progress and finished products relating to Petrochemicals and Oil and
Gas business segments as well as materials and spare parts relating to the Generation business segment. Inventories
are stated at the lower of cost or net realizable value. Cost is determined using the weighted average price method. The cost
of inventories includes expenditure incurred in purchases and production and other necessary costs to bring them to their existing
location and condition. In case of manufactured products and production in process, the cost includes a portion of indirect production
costs, excluding any idle capacity (slack). The
net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and
the estimated costs to make the sale. The
assessment of the recoverable value of these assets is made at each reporting date, and the resulting loss is recognized in the
statement of income when the inventories are overstated. The
Company has classified materials and spare parts into current and non-current, depending on the timing in which they are expected
to be used for replacement or improvement on existing assets. The portion of materials and spare parts for maintenance or improvements
on existing assets, is exposed under the heading “Property, plant and equipment”.
Non-current assets (or disposal group) held for sale and discontinued operations4.14 Non-current assets (or disposal group) held for sale and discontinued operations Non-current
assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather
than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount
and fair value less costs to sell, except deferred tax assets, assets arising from employee benefits, financial assets and investment
property that are carried at fair value and contractual rights from insurance contracts, which are specifically exempt from this
requirement. An
impairment loss is recognised for any initial or subsequent write-down of the asset until fair value less costs to sell. A gain
is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess
of any cumulative impairment loss previously recognised. The gain or loss not previously recognised by the date of the sale of
the non-current asset is recognised at the date of derecognition. Non-current
assets (including those that are part of a disposal group) are not depreciated or amortized while they be classified as held for
sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to
be recognized. Non-current
assets classified group of assets classified as held for sale are presented separately from the other assets in the balance sheet.
The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the balance
sheet. These assets and liabilities are not offset. If
it is a discontinued operation, that is, an item which has been disposed of or classified as held for sale; and (i) it represents
a significant business line or geographic area which may be considered separate from the rest; (ii) it is part of a single coordinated
plan to dispose of a significant business line or operating geographic area which may be deemed separate from the rest; or (iii)
it is a subsidiary entity acquired solely for the purpose of reselling it; a single amount is disclosed in the statement of comprehensive
income, which shows results of discontinued operations, net of tax, including the result for the valuation at fair value less
cost of sales or asset disposal costs, if applicable.
Cash and cash equivalents4.15 Cash and cash equivalents For
the purpose of presentation in the Consolidated Statement of Cash Flows, cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months
or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
If any, bank overdrafts are shown within borrowings in current liabilities in the Consolidated Statement of Financial Position
and there are not disclosed under Cash and cash equivalents in the Consolidated Statement of Cash Flows since they are not part
of the Company’s cash management.
Shareholder's equity4.16 Shareholder´s equity Equity’s
movements have been accounted for in accordance with the pertinent decisions of shareholders' meetings and legal or regulatory
standards. All
equity accounts have been restated in terms of the measuring unit current as of December 31, 2018, with the exception of Share
capital and Treasury shares, which represent the subscribed and paid in, and the outstanding treasury capital, respectively. The
adjustment resulting from its restatement as of December 31, 2018 is disclosed in the Comprehensive share capital adjustment and
Comprehensive treasury shares adjustment lines, respectively. As
from the change in functional currency, on January 1, 2019 the Company discontinued the preparation and presentation of financial
statements under IAS 29, and has considered equity figures expressed in terms of the measuring unit current as of December 31,
2018 as the basis for subsequent financial statements’ amounts.
4.16.1 Share
capital Share
capital represents the capital issued, composed of the contributions that were committed and/or made by the shareholders and represented
by shares that comprise outstanding shares at nominal value.
4.16.2 Share
premium It
includes:
(i) The portion of the
collected price exceeding the face value of the shares issued by the Company, net of absorbed accumulated losses.
(ii) The difference between
the fair value of the consideration paid/collected and the accounting value of the equity interest in the subsidiary acquired/sold/diluted
which does not represent a loss of control or significant influence.
(iii) The difference between
the proportional equity value registered before the merger of subsidiary and the value resulting from applying to the subsidiary’s
merged equity interest, the new ownership share resulting from the exchange relationship.
4.16.3 Legal
reserve In
accordance with the Argentine Commercial Companies General Law, 5% of the profit arising from the statement of income for the
year, prior years' adjustments, the translation differences which are directly accumulated in Retained earnings (see Note 4.3.4),
the amounts transferred from other comprehensive income and prior years' accumulated losses, must be appropriated to a legal reserve
until such reserve equals 20% of the Company’s share capital, the related adjustment of share capital. When for any reason,
the amount of this reserve will be shorter, dividends may not be distributed, until such amount is reached.
4.16.4 Voluntary
reserve This
reserve results from an allocation made by the Shareholders’ Meeting, whereby a specific amount is set aside to cover for
the funding needs of projects and situations associated with Company policies.
4.16.5 Other
reserves It
includes the result of operations with non-controlling interest that do not result in a loss of control and reserves for stock
compensation plans.
4.16.6 Retained
earnings (Accumulated losses) Retained
earnings comprise accumulated profits or losses without a specific appropriation; positive earnings can be distributable by the
decision of the Shareholders' meeting, as long as they are not subject to legal restrictions. These earnings comprise prior years'
earnings that were not distributed, translation differences which are directly accumulated in retained earnings pursuant to the
policy described in Note 4.3.4, the amounts transferred from other comprehensive income and prior years' adjustments, according
to IFRS. General
Resolution No. 593/11 issued by the CNV provided that Shareholders in the Meetings at which they should decide upon the approval
of financial statements in which the Retained earnings account has a positive balance, should adopt an express resolution as to
the allocation of such balance, whether to dividend distribution, capitalization, setting up of reserves or a combination of these.
The Company’s Shareholders have complied with these requirements.
4.16.7 Other
comprehensive income It
includes gains and losses from the remeasurement process of foreign operations and the translation differences which are not classified
and directly accumulated in retained earnings pursuant to the policy described in Note 4.3.4 and actuarial gains and losses for
defined benefit plans and the related tax effect.
4.16.8 Dividends
distribution Dividend
distribution to Company shareholders is recognized as a liability in the Consolidated Financial Statements in the year in which
the dividends are approved by the Shareholders' Meeting. The distribution of dividends is made based on the Company’s Stand-Alone
Financial Statements.
Compensation plans4.17 Compensation plans The
following guidelines under IFRS 2 have been taken into consideration for the registration of stock-based compensations:
4.17.1 Compensations payable
in cash:
(i) Compensation Agreements
– Senior Management: fixed compensation and annual, variable and contingent long-term compensation established based
on the Company’s annual market value appreciation, with a payment cap over the Company’s adjusted operating income,
approved by the Company’s Board of Directors on June 2, 2017 with the purpose of efficiently aligning the senior management’s
interests with those of the Company and its shareholders. With the purpose of avoiding duplication, any analogous compensation
paid to senior managers by any of the Company’s subsidiaries will be deducted from the compensation amount in proportion
to the Company’s interests in such subsidiaries. The
reasonable value of the received services is measured through a share appreciation estimate using the Black-Scholes-Merton financial
valuation model. The fair value of the amount payable is accrued and acknowledged as an expense, with the corresponding increase
in liabilities. Liabilities are revalued on each balance sheet date. Any change in the fair value of liabilities is disclosed
under profit or loss.
(ii) Annual Variable
Compensation granted to certain officers for the performance of technical and administrative duties amounting to 7% and 4%
of the EBDA accrued until November 2020 and from December 2020, respectively (EBITDA less paid income tax, less total net
financial costs, less interest on its own capital, considering an annual 10% dollar-denominated rate) of PEPASA´s continuing
business in Pampa. The Company recognizes a provision (liability) and an expense for this EBDA Compensation based on the previously
mentioned formula.
4.17.2 Compensations payable
in shares Stock
Compensation Plan – Officers and other key staff: a certain number of Company shares receivable within the term stipulated
in the program to encourage the alignment of the employees’ performance with the Company’s strategy and to generate
a clear and direct link between the creation of value for shareholders and the employees’ compensation; it was approved
by the Board of Directors and the Shareholders’ Meeting on February 8 and April 7, 2017, respectively. Furthermore, the
Company’s Board of Directors approved the market acquisition of own shares as a means of implementing the Plan (see Note
13.1.1). The
number of shares is calculated as from a percentage over the total annual remuneration, plus the bonus assigned to each covered
employee, divided by the weighted average price, in pesos, of the Company’s share and ADR for the same period; with one-third
vesting each year, which will be awarded together with the payroll for April of the year following the vesting date, with the
requirement that the employment relationship continues at least until each vesting date. The fair value of the received services
is measured at the fair value of the shares at the time of granting and is disclosed during the vesting period, together with
the corresponding increase in equity.
Trade payables and other payables4.18 Trade payables and other payables Trade
payables and other payables are recognized initially at fair value and subsequently measured at amortized cost using the effective
interest method.
Borrowings4.19 Borrowings Borrowings
are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost.
Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over
the period of the borrowings, using the effective interest method. Borrowings
are removed from the statement of financial position when the obligation specified in the contract is discharged, cancelled or
expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another
party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or
loss as other income or finance costs. Borrowings
are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting period.
4.19.1 Borrowing
costs General
and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset
are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying
assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment
income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalization. Other
borrowing costs are expensed in the period in which they are incurred.
Employee benefits4.20 Employee benefits
4.20.1 Short-term
obligations Payroll
liabilities, including non-monetary benefits and accumulated sick leave expected to be settled in full within 12 months after
the end of the reporting period in which the employees provide the associated service are recognized for the amount expected to
be paid when the liabilities are settled. The liabilities are disclosed as Salaries and social security payable in the consolidated
statement of financial position.
4.20.2 Defined
benefit plans Labor
costs liabilities are accrued in the periods in which the employees provide the services that trigger the consideration. Additionally,
the Company operates several defined benefit plans. Defined benefit plans define an amount of pension benefit that an employee
will receive on retirement, depending on one or more factors, such as age, years of service and compensation. In accordance with
conditions established in each plan, the benefit may consist in a single payment, or in making complementary payments to those
made by the pension system. The
defined benefit liability recognized in the financial statement balance sheet, at the end of the reporting period, is the present
value of the defined benefit obligation net of the fair value of the plan assets, when applicable. The defined benefit obligation
is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit
obligation is determined by discounting the estimated future cash outflows using future actuarial assumptions about demographic
and financial variables that affect the determination of the amount of such benefits. Actuarial
gains and losses from experience adjustments and changes in actuarial assumptions, are recognized in other comprehensive income
(loss) in the period in which they arise and past service costs are recognized immediately in the statement of income (loss).
Provisions, contingent liabilities and contingent assets4.21 Provisions, contingent liabilities and contingent assets Provisions
are recognized when the group has a present legal or constructive obligation as a result of a past event, it is probable that
an outflow of resources will be required to settle that obligation, and the amount can be reliably estimated. Provisions are not
recognised for future operating losses. Provisions
are measured at the present value of the expenditures expected to be required to settle the present obligation, taking into account
the best available information as of the date of the Consolidated Financial Statements based on assumptions and methods considered
appropriate and taking into account the opinion of Company’s legal advisors. As additional information becomes available
to the Company, estimates are revised and adjusted periodically. The discount rate used to determine the present value reflects
current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due
to the passage of time is recognised as other financial results. Contingent
liabilities are possible obligations that arise from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of uncertain future events not wholly within the control of the entity; or present obligations that arise from
past events but it is not probable that an outflow of resources will be required to its settlement; or whose amount cannot be
measured with sufficient reliability. Contingent
liabilities are not recognised. The Company discloses in notes to the Consolidated Financial Statements a brief description of
the nature of material contingent liabilities. Contingent
liabilities, whose possibility of any outflow in settlement is remote, are not disclosed unless they involve guarantees, in which
case the nature of the guarantee is disclosed. Contingent
assets are possible assets that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence
of uncertain future events not wholly within the control of the entity. Contingent
assets are no recognised. The Company discloses in notes to the Consolidated Financial Statements a brief description of the nature
of material contingent assets, where the related inflows of economic benefits are estimated to be probable.
Revenue from contracts with customers4.22 Revenue from contracts with customers
4.22.1 Generation
segment 4.22.1.1
Revenues from sales to the spot market (SE Resolution N°31/20) The
Company recognizes revenues from i) power availability on a monthly basis as the different power plants are available to generate;
ii) power generated in those hours of maximum technical requirement of the month; and iii) energy generated and operated when
the delivery of energy is effective, based on the price applicable depending on the technology of each plant and, in the case
of thermal power plants, the application of the coefficient derived from the average usage factor over the last 12 months on the
power capacity remuneration specified in the Resolution. Revenues are not adjusted for the effect of financing components as sales
are made with an average credit term of 45 days, which is consistent with market practice. 4.22.1.2
Revenues from supply agreements with CAMMESA (SE Resolution No. 220/07, SEE Resolution No. 21/16, SEE Resolution No. 287/17 and
Renovar Programs) The
Company recognizes revenues from supply contracts with CAMMESA for i) power availability, when applicable, on a monthly basis,
as the different power plants are available to generate and ii) energy generated when the delivery of energy is effective, based
on the price established in each contract. Revenues are not adjusted for the effect of financing components as sales are made
with an average credit term of 45 days, which is consistent with market practice. 4.22.1.3
The
Company recognizes revenues from energy plus sales and renewable energy when the delivery of energy is effective based on the
price established in each contract. Revenues are not adjusted for the effect of financing components as sales are made with an
average credit term of 30 days, which is consistent with market practice.
4.22.2 Oil
and gas segment The
Company recognizes revenues from the sale of oil and gas, to third parties and intersegment, when control of the product is transferred,
that is, at the output of each area, when the oil and gas is delivered to the carrier and to the extent there is no unfulfilled
obligation that could affect the acceptance of the product by the client. In all cases the transport of the gas is in charge of
the client. Revenues from these sales are recognized based on the price by product specified in each contract or agreement to
the extent that it is highly probable that a significant reversal will not occur. Revenues
are not adjusted for the effect of financing components as sales are made with an average credit term not exceeding 45 days, which
is consistent with market practice. 4.22.3
Petrochemical segment The
Company recognizes revenues from the sale of petrochemical products, whether in local or foreign market, when the control of the
product is transferred, that is, when the products are delivered to the client and there is no unfulfilled obligation that could
affect the acceptance of the product by the client. The delivery, as established in each contract, is occurs: (a)
when the products are dispatched and transported by and in charge of the client, or, (b)
when the products have been dispatched by the Company to a specific location, the obsolescence risks and loss have been transferred
to the client, and the client has accepted the products according to the sale contract, the acceptance provisions have expired,
or when the Company has objective evidence that all acceptance criteria have been met. Revenues
from these sales are recognized based on the price specified in each contract, to the extent that it is highly probable that a
significant reversal will not occur. Revenues are not adjusted for the effect of financing components as sales are made with an
average credit term not exceeding 24 days, which is consistent with market practice. 4.22.4
Holding and others segment The
Company recognizes revenues from contracts with customers in relation to advisory services to related companies as services are
rendered based on the price established in each agreement. Revenues are not adjusted for the effect of financing components, as
sales are made with an average credit term of 30 days, which is consistent with market practice.
Other Income4.23 Other Income
4.23.1 Government
grants Grants
from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and
the Group will comply with all attached conditions. The group did not benefit directly from any other forms of government assistance. The
Company recognizes revenues from natural gas production promotion or stimulus programs upon the actual delivery of gas and in
accordance with the price established in the applicable regulation, only inasmuch as it is highly probable that there will be
no significant reversal and the consideration is likely to be received, that is, to the extent that the procedure defined by the
Government is formally complied with. The
recognition of revenues associated with the Argentine Natural Gas Production Promotion Plan (see Note 2.4.3.1.2) falls within
the scope of IAS 20 as it involves a compensation as a result of the maintenance or increase in the committed production volume. Revenues
from natural gas production or stimulus programs are disclosed under Other operating income in the consolidated statement of comprehensive
income. Furthermore, the fiscal costs of the above-mentioned programs are disclosed under Other operating expenses in the consolidated
statement of comprehensive income.
4.23.2 Interest
income Interest
income from financial assets at fair value through profit or loss is included into the result of changes in the fair value of
those assets. Interest income from financial assets at amortized cost and financial assets at fair value through other comprehensive
income are recognised in the statement of income. Interest
income is calculated by using the effective interest rate to the gross carrying amount of a financial asset (without considering
impairment provision), except for impaired financial assets, that is calculated by applying the effective interest rate to carrying
amount net of impairment provision. Commercial
interest corresponding to late payment surcharges in the cancellation of sales receivables is disclosed under Other operating
income as it provides relevant information on the business’ operations and operating flows.
4.23.3 Dividends Dividends
are received from financial assets measured at fair value through profit or loss or through other comprehensive income. Dividends
are recognized as revenue when the right to receive payment has been established. This applies even if they are paid out of pre-acquisition
profits.
Income tax4.24 Income tax The
tax expenses for the year include current and deferred tax. Tax is recognized in the income statement, except to the extent that
it relates to items recognized in other comprehensive income or directly in equity, in which case, the tax is also recognized
in other comprehensive income or directly in equity, respectively. The
current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject
to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities. Deferred
income tax is recognized, using the liability method on temporary differences between the tax bases of assets and liabilities
and their carrying amounts in the Consolidated Financial Statements. However, deferred tax liabilities are not recognized if they
come from the initial recognition of goodwill; or if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at time of the transaction affects neither accounting nor taxable profit or loss. Deferred
income tax assets are recognized only to the extent that it is probable that future taxable profit will be available and can be
used against temporary differences. Deferred
income tax is provided on temporary differences from investments in subsidiaries and associates, except for deferred income tax
liability where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred
assets or liabilities are recognized on account of gains or losses from fiscal tax inflation which, pursuant to Law No. 27,541,
are deferred and accounted for in subsequent fiscal periods (see Note 2.6.1.5). Deferred
income tax assets and liabilities are offset when there is a legally enforceable right to offset the recognized amounts and when
the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. Current
and deferred tax assets and liabilities have not been discounted, and are stated at their nominal value. Income
tax rates prevailing at year-end in Argentina (see Note 2.6.1), Venezuela, Ecuador, Bolivia and Uruguay are 30%, 50%, 25%, 25%
and 25%, respectively. Additionally, a 3% surcharge is added to Ecuador’s income tax when the company’s shareholder
residing in Ecuador is an entity established in a jurisdiction considered a tax haven under Ecuadorian laws. In
Bolivia, payment of Bolivian-source income to beneficiaries outside Bolivia is levied with a 12.5% withholding income tax. Furthermore,
and pursuant to the last tax reform passed in Ecuador and effective as from January 1, 2020, dividends distributed to foreign
shareholders will be subject to a 10% withholding. Deferred
tax assets and liabilities are measured using the tax rates expected to apply in the period when the asset is realized or the
liability is settled. Finally,
receivables have been disclosed on account of the application of the minimum presumed income tax prior to its abrogation as from
January 1, 2019, which are computable as an advance payment of income tax in any of the following ten years. The
Company’s management evaluates the recoverability of the recorded receivables at the closing of each fiscal year, and allowances
are created in as long as it is estimated that the computable amounts will not be recoverable within the statutory limitation
period taking into consideration the Company’s current business plans.
Leases4.25 Leases In
leases where the Company is a lessee (Note 18.1), a right-of-use asset and a lease liability are recognized on the date on which
the underlying asset is available for use by the Company. At
the commencement date the lease liability is measured at the present value of the payments that are not paid at that date, including:
- fixed payments,
less any lease incentive receivable
- variable lease payments
depending on an index or rate
- amounts that the
Company expects to pay under residual value guarantee
- exercise price of
a purchase option (if the Company is reasonably certain to exercise that option), and
- penalty payments
for terminating the lease, if the lease term reflects the Company exercising that option. Lease
payments are discounted using the Company’s incremental borrowing rate, which is the rate the Company would have to pay
to borrow over a similar term, security and conditions, the funds necessary to acquire an asset of a similar value to the right-of-use
asset in a similar economic environment, or by using the interest rate implicit in the lease, if that rate can be readily determined. The
lease liability is disclosed in “Lease liability” under “Trade and other payables”. Each lease payment
is apportioned between the principal and the financial cost. The financial cost is charged to income over the term of the lease
to produce a constant periodic interest rate on the remaining liability balance for each period. Right-of-use
assets are measured at cost, which comprises:
- the amount of the
initial measurement of the lease liability
- any lease payment
made at or before the commencement date, less any lease incentive received
- any initial direct
cost, and
- an estimate of costs
to be incurred for decommissioning or restoring the underlying asset pursuant to the terms and conditions of the lease Right-of-use
assets are depreciated using the straight-line method over the asset’s useful life or, if shorter, during the lease term. The
Company recognizes lease payments associated with short-term leases (up to 12 months) and leases for which the underlying asset
is of low value (IT equipment and office supplies) as an expense using the straight-line method over the lease term. Leases
in which the Company, as a lessor, has transferred all risks and rewards incidental to ownership of the underlying asset are classified
as financial leases (Note 18.2). Financial leases are recognized at the commencement date at the fair value of the leased property
or, if lower, the present value of the minimum lease payments to be received. The corresponding lease rights, net of financial
charges, are included in “Trade and other receivables”. Each lease payment received is allocated between income receivable
and financial income. Financial income is recognized as a profit or a loss over the term of the lease to produce a constant periodic
interest rate on the remaining liability balance for each period. Property under financial leases is derecognized if there is
reasonable certainty that the Company will transfer its ownership at the end of the lease term.

2. REGULATORY FRAMEWORK (Tables

2. REGULATORY FRAMEWORK (Tables)12 Months Ended
Dec. 31, 2020
Regulatory Framework
Schedule of generating units in operationThe
Company’s generating units are detailed below, directly and through its subsidiaries and joint businesses:
In
operation:
Generator Generating
unit Tecnology Power Applicable
regime (1)
CTG GUEMTG01 TG 100
MW Energy
Plus Res. No. 1,281/06
CTG GUEMTV11 TV ≤100
MW SE
Resolutions No. 31/20
CTG GUEMTV12 TV ≤100
MW SE
Resolutions No. 31/20
CTG GUEMTV13 TV >100
MW SE
Resolutions No. 31/20
Piquirenda PIQIDI
01-10 MG 30
MW SE
Resolution No. 220/07
CPB BBLATV29 TV >100
MW SE
Resolutions No. 31/20
CPB BBLATV30 TV >100
MW SE
Resolutions No. 31/20
CT
Ing. White BBLMD01-06 MG 100
MW SEE
Resolution No. 21/16
CTLL LDLATG01 TG >50
MW SE
Resolutions No. 31/20
CTLL LDLATG02 TG >50
MW SE
Resolutions No. 31/20
CTLL LDLATG03 TG >50
MW SE
Resolutions No. 31/20
CTLL LDLATV01 TV 180
MW SE
Resolution No. 220/07 (1)
CTLL LDLATG04 TG 105
MW SEE
Res. 220/07 (75%)
CTLL LDLATG05 TG 105
MW SEE
Resolution No. 21/16
CTGEBA GEBATG01/TG02/TV01 CC >150
MW SE
Resolutions No. 31/20
CTGEBA GEBATG03 TG 169
MW Energy
Plus Res. No. 1.281/06
CTGEBA GEBATG03/TG04/TV02 CC 400
MW SE
Resolutions No. 287/17
Ecoenergía CERITV01 TV Renewable ≤
50 Energy
Plus Res. N° 1,281/06 (1)
CT
Parque Pilar PILBD01-06 MG 100
MW SEE
Resolution No. 21/16 (1)
CTB EBARTG01
- TG02 TG HI
– Small 50<P≤120 SE
Resolution No. 220/07 (1)
HIDISA AGUA
DEL TORO HI HI
– Small 50<P≤120 SE
Resolutions No. 31/20
HIDISA EL
TIGRE HI HI
– Small 50<P≤120 SE
Resolutions No. 31/20
HIDISA LOS
REYUNOS HB HB
– Media 120<P≤300 SE
Resolutions No. 31/20
HINISA NIHUIL
I - II - III HI HI
– Chica 50<P≤120 SE
Resolutions No. 31/20
HPPL PPLEHI HI HI
– Media 120<P≤300 SE
Resolutions No. 31/20
P.E.
M. Cebreiro CORTEO Eólica 100
MW Renovar
PEPE
II PAMEEO Eólica 53
MW SEE
Resolution No. 281/17
PEPE
III BAHIEO Eólica 53
MW SEE
Resolution No. 281/17
(1)
Schedule of generating units in constructionIn
construction:
Generator Tecnology Capacity Applicable
regime
CTLL MG 15
MW SE
Resolutions No. 31/20
CTB CC
280
MW SE
Resolution No. 220/07
Schedule of minimum remuneration to thermal generatorsThe
minimum remuneration for generators with no availability commitments includes the following scales and prices:
Technology
/ Scale SEE
No. 19/17 (US$
/ MW-month) SRRYME
No. 1/19 (US$
/ MW-month) SE
No. 31/20 (AR$
/ MW-month)
Large
CC Capacity > 150 MW 3,050 3,050 100,650
Large
ST Capacity > 100 MW 4,350 4,350 143,550
Small
ST Capacity > 100 MW 5,700 5,200 171,600
Large
GT Capacity > 50 MW 3,550 3,550 117,150
Schedule of remuneration for thermal generators with guaranteed power capacityThe
remuneration for guaranteed power capacity to generators with availability commitments is:
Period SEE
No. 19/17 (US$
/ MW-month) SRRYME
No. 1/19 (US$
/ MW-month) SE
No. 31/20 (AR$
/ MW-month)
Summer
– Winter 7,000 7,000 360,000
Fall
- Spring 7,000 5,500 270,000
Schedule of additional remuneration to thermal generatorsHowever, the SE Resolution No. 31/20
established an additional remuneration for the hours of maximum thermal requirement of the month (hmrt), which corresponds to
the 50 hours with the largest dispatch of thermal generation of each month divided into two blocks of 25 hours each, applying
the following prices to the average generated power:
Period First
25 hours ($
/ MW-hmrt) Second
25 hours ($
/ MW-hmrt)
Summer
– Winter 45,000 22,500
Fall
- Spring 7,500 -
Schedule of base and additional remunerations to hydroelectric generatorsThe
base and the additional remunerations included the following scales and prices:
Technology
/ Scale Base (US$
/ MW-month) Additional (US$
/ MW-month)
Medium
HI Capacity > 120 ≤ 300 MW 3,000 1,000
Small
HI Capacity > 50 ≤ 120 MW 4,500 1,000
Medium
Pumped HI Capacity > 120 ≤ 300 MW 2,000 500
Renewable
HI Capacity ≤ 50 MW 8,000 1,000
Schedule of hydroelectric generators by technology and scales valuesThe
following are the power by technology and scale values set under SE Resolution No. 31/20:
Technology
/ Scale SE
No. 31/20 (AR$
/ MW-month)
Medium
HI Capacity > 120 ≤ 300 MW 132,000
Small
HI Capacity > 50 ≤ 120 MW 181,500
Medium
Pumped HI Capacity > 120 ≤ 300 MW 132,000
Renewable
HI Capacity ≤ 50 MW 297,000
Period First
25 hours ($
/ MW-hmrt) Second
25 hours ($
/ MW-hmrt)
Summer
– Winter 39,000 19,500
Fall
- Spring 6,500 -

4. ACCOUNTING POLICIES (Tables)

4. ACCOUNTING POLICIES (Tables)12 Months Ended
Dec. 31, 2020
Disclosure of voluntary change in accounting policy [abstract]
Schedule of estimated useful livesThe
group´s remaining items of property, plant and equipment (including any significant identifiable component) are depreciated
by the straight-line method based on estimated useful lives, as detailed below: Buildings:
50 years Vehicles:
5 years Furniture,
fittings and communication equipment: 5- 20 years Computer
equipment and software: 3 years Tools:
10 years Gas
Plant and Pipeline: 20 years

5. GROUP STRUCTURE (Tables)

5. GROUP STRUCTURE (Tables)12 Months Ended
Dec. 31, 2020
Group Structure
Schedule of sale of subsidiary and areasThis transaction generated a profit
comprehensive income net of taxes in the amount of US$ 30 million, as follows:
12.31.2018
Sale price (2) 270
Book value of assets sold and costs associated
with the transaction (226)
Result for sale 44
Interests (1) 4
Income
tax (22)
Imputed in results 26
Other
comprehensive income (loss)
Reclasification exchange differences on translation 6
Income
tax (2)
Imputed
in Other comprehensive income 4
Total
comprehensive income 30
(1) Are exposed in "Financial
income" in the consolidated statement of comprehensive income related to discontinued operations.
(2) Sale price recorded
as of December 31, 2018 arises from the Consolidated Financial Statements denominated in pesos in accordance with IAS 29,
and was translated into U.S. Dollars using the exchange rate as of that date. As
of December 31, 2018, the closing of the transaction did not generate additional profits or losses, according to the following
detail:
12.31.2018
Sale price (1) 28
Book value of assets sold and costs associated
with the transaction (28)
Result for sale -
(1) Sale price recorded
as of December 31, 2018 arises from the Consolidated Financial Statements denominated in pesos in accordance with IAS 29,
and was translated into U.S. Dollars using the exchange rate as of that date.
Schedule of consolidated statement of comprehensive income related to discontinued operationsAs
of December 31, 2020, 2019 and 2018
12.31.2020 12.31.2019 12.31.2018
Distribution Distribution Distribution Oil
and gas Refining
and distribution Eliminations Total
Revenue 1,085 1,502 1,484 66 422 (90) 1,882
Cost
of sales (926) (1,225) (1,136) (33) (361) 91 (1,439)
Gross
profit 159 277 348 33 61 1 443
Selling
expenses (129) (122) (134) (2) (33) - (169)
Administrative
expenses (64) (65) (76) (1) (4) - (81)
Other
operating income 29 19 16 1 6 - 23
Other
operating expenses (25) (43) (44) (6) (10) - (60)
Impairment
of property, plant and equipment and intangible assets (589) - - - - - -
Result
from the sale of share of profit and property, plant and equipment - - - 44 - - 44
Agreement
on the regularization of obligations 285 - - - - -
Operating
income (loss) (619) 351 110 69 20 1 200
Gain
on monetary position, net 115 187 226 7 2 (1) 234
Finance
income 1 11 11 4 1 - 16
Finance
costs (110) (112) (132) (1) - - (133)
Other
financial results (20) (62) (50) (4) 22 - (32)
Financial
results, net (14) 24 55 6 25 (1) 85
(loss)
Income before income tax (633) 375 165 75 45 - 285
Income
tax 41 (178) (49) (26) (14) - (89)
(Loss)
Profit of the year from discontinued operations (592) 197 116 49 31 - 196
12.31.2020 12.31.2019 12.31.2018
Distribution Distribution Distribution Oil
and gas Refining
and distribution Eliminations Total
Other
comprehensive income (loss)
Items
that will not be reclassified to profit or loss
Results
related to defined benefit plans 1 - - - - - -
Income
tax - - - (2) - - (2)
Exchange
differences on translation (15) (15) - 4 - - 4
Items
that may be reclassified to profit or loss
Exchange
differences on translation (19) (13) - 6 - - 6
Other
comprehensive (loss) income of the year from discontinued operations (33) (28) - 8 - - 8
Total
comprehensive (loss) income of the year from discontinued operations (625) 169 116 57 31 - 204
Total
(loss) income of the year from discontinued operations attributable to:
Owners
of the company (499) 98 61 47 31 - 139
Non
- controlling interest (93) 99 55 2 - - 57
(592) 197 116 49 31 - 196
Total
comprehensive (loss) income of the year from discontinued operations attributable to:
Owners
of the company (517) 84 61 53 31 - 145
Non
- controlling interest (108) 85 55 4 - - 59
(625) 169 116 57 31 - 204
Schedule of assets and liabilities that comprise the assets held for sale and associated liabilitiesAs
of December 31, 2020, the assets and liabilities that comprise the assets held for sale and associated liabilities are :
12.31.2020
ASSETS
NON-CURRENT
ASSETS
Property,
plant and equipment 1,185
Right-of-use
assets 3
Financial
assets at amortized cost 3
Trade
and other receivables 1
Total
non-current assets 1,192
Inventories 22
Financial
assets at amortized cost 1
Financial
assets at fair value through profit and loss 26
Trade
and other receivables 176
Cash
and cash equivalents 52
Total
current assets 277
Assets
classified as held for sale 1,469
LIABILITIES
NON-CURRENT
LIABILITIES
Provisions 29
Deferred
revenue 17
Deferred
tax liabilities 282
Defined
benefit plans 9
Salaries
and social security payable 4
Borrowings 98
Trade
and other payables 81
Total
non-current liabilities 520
CURRENT
LIABILITIES
Provisions 4
Taxes
payables 21
Defined
benefit plans 1
Salaries
and social security payable 44
Borrowings 2
Trade
and other payables 429
Total
current liabilities 501
Liabilities
associated to assets classified as held for sale 1,021
Schedule of consolidated statement of cash flows related to discontinued operationsThe
consolidated statement of cash flows related to discontinued operations is presented below:
12.31.2020 12.31.2019 12.31.2018
Net
cash generated by operating activities 211 170 224
Net
cash used in investing activities (86) (86) (221)
Net
cash used in financing activities (73) (85) (13)
Increase
(decrease) in cash and cash equivalents from discontinued operations 52 (1) (10)
Cash
and cash equivalents at the begining of the year 9 1 10
Effect
of devaluation and inflation on cash and cash equivalents (8) 9 1
Increase
(decrease) in cash and cash equivalents 52 (1) (10)
Cash
and cash equivalents at the end of the year 53 9 1
Schedule of subsidiaries informationThe
country of the registered office is also the principal place where the subsidiary develops its activities.
12.31.2020 12.31.2019
Company Country Main
activity Direct
and indirect participation % Direct
and indirect participation %
Corod Venezuela Oil 100.00% 100.00%
CPB
(1) Argentina Generation - 100.00%
CPB
Energía S.A. Argentina Generation 100.00% 100.00%
EcuadorTLC Ecuador Oil 100.00% 100.00%
Edenor
(2) Argentina Distribution
of energy 57.12% 56.32%
EISA Uruguay Investment 100.00% -
Enecor
S.A. Argentina Transportation
of electricity 69.99% 69.99%
HIDISA Argentina Generation 61.00% 61.00%
HINISA Argentina Generation 52.04% 52.04%
PACOSA Argentina Trader 100.00% 100.00%
PEB Bolivia Investment 100.00% 100.00%
PACOGEN
(1) Argentina Investment - 100.00%
PE
Energía Ecuador LTD Gran
Cayman Investment 100.00% 100.00%
Energía
Operaciones ENOPSA S.A. Ecuador Oil 100.00% 100.00%
Petrolera
San Carlos S.A. Venezuela Oil 100.00% 100.00%
PHA
(1) Argentina Investment - 100.00%
PISA Uruguay Investment 100.00% 100.00%
PP
(1) Argentina Investment - 100.00%
TGU Uruguay Gas
transportation 100.00% 100.00%
Transelec
(1) Argentina Investment - 100.00%
Trenerec
Energía Bolivia S.A. (3) Bolivia Investment - 100.00%
Trenerec
S.A. Ecuador Investment 100.00% 100.00%
(1) Merged companies.
See Note 5.1.
(2) Corresponds to effective
ownership interest in Edenor after consider treasury shares (55.14% nominal interest). See Note 5.3.1.
(3) Company liquidated
in October 2020.
Schedule of investments in associates and joint ventures informationThe
following table presents the main activity and financial information used for valuation and percentages of participation in associates
and joint ventures:
Information
about the issuer
Main
activity Date Share
capital Profit
(loss) of the period / year Equity Direct
and indirect participation %
Associates
Refinor Refinery 09.30.2020 1 (8) 57 28.50%
OCP Investment 12.31.2020 100 (27) 73 15.91%
TGS
(1) Transport
of gas 12.31.2020 9 39 785 2.093%
Joint
ventures
CIESA
(1) Investment 12.31.2020 8 25 401 50.00%
Citelec
(2) Investment 12.31.2020 7 26 171 50.00%
Greenwind Generation 12.31.2020 - 5 (6) 50.00%
CTB Investment 12.31.2020 7 129 356 50.00%
(1) The Company holds
a direct and indirect interest of 2.093% in TGS and 50% in CIESA, a company that holds a 51% interest in the share capital
of TGS. therefore, additionally the Company has an indirect participation of 25.50% in TGS. As of December 31, 2020, the quotation
of TGS's ordinary shares and ADR published on the BCBA and the NYSE was $ 153,15 and US$ 5.20, respectively, granting to Pampa
(direct and indirect) ownership an approximate stake market value of US$ 399 million.
(2) Through a 50% interest,
the company joint controls Citelec, company that controlled Transener with 52.65% of the shares and votes. As a result, the
Company has an indirect participation of 26.33% in Transener.
Schedule of interest in associates and joint venturesThe
details of the balances of investments in associates and joint ventures are as follows:
12.31.2020 12.31.2019
Disclosed
in non-current assets
Associates
Refinor 19 20
OCP 2 33
TGS 25 21
46 74
Joint
ventures
CIESA 240 235
Citelec 85 88
CTB 178 114
503 437
549 511
Disclosed
in non-current liabilities
Greenwind
(1) (2) (4)
(2) (4)
(1) The company receives
financial assistance from partners.
Schedule of result from interests in associates and joint venturesThe
following tables show the breakdown of the result from investments in associates and joint ventures:
12.31.2020 12.31.2019 12.31.2018
Associates
Oldelval - - 3
Refinor
(2) (3) (4)
OCP (5) 21 34
TGS 1 1 -
(6) 19 33
Joint
ventures
CIESA 11 50 75
CTB 64 13 -
Citelec
13 19 21
Greenwind 3 - (11)
91 82 85
85 101 118
Schedule of evolution of interests in associates and joint venturesThe
evolution of investments in associates and joint ventures is as follows:
12.31.2020 12.31.2019 12.31.2018
At
the beginning of the year 507 403 315
Compensation (5) (16) -
Dividends (34) (75) (19)
Decreases - - (10)
Increases
(1) 3 108 -
Share
of profit 85 101 118
Other
comprehensive income (loss) - - (1)
Exchange
differences on translation (9) (14) -
At
the end of the year 547 507 403 (1)
In 2020, corresponds to the acquisition
of TGS’ shares and in 2019, corresponding mainly to the financial receivable with OCP acquired under the transaction with
AGIP (see Note 5.3.6.2) and capital contributions to CTB.
Schedule of consideration transferred and the fair value of the assets acquired and the liabilities assumedThe
following table details the consideration transferred and the fair value of the assets acquired and the liabilities assumed by
CTB as of June 26, 2019:
in
million US$
Total
consideration transferred (1) (272)
Financial
assets at fair value 16
Property,
plant and equipment 477
Inventories 8
VRDs (229)
Fair
value of net assets 272
(1) Includes US$ 53
million for the purchase of the acquired VRDs and considers a US$ 10 million of a price adjustment in favor of CTB.
Schedule of consideration transferred and fair value of assets acquired and profit recordedThe
following table details the consideration transferred and the fair value of the assets acquired and the profit recorded by PEB as of
June 20, 2019:
in
million US$
Acquisition
cost (1) (0.4)
Contingent
consideration (2) (0.1)
Total
consideration (0.5)
Share
value of the interest in the fair value of associates’s identifiable assets and liabilities (3) 9.0
Financial
credit with OCP 14.2
Dividends
to be received 2.5
Assets
fair value 25.7
Profit
(4) 25.2
(1) Including expenses paid
by PEB to the Ecuadorian Government (Ministry of the Environment) of US$ 0.1 million for the granting of the authorization to
transfer the shares held by AGIP and other advisory expenses related to the transaction.
(2) Contingent consideration
for the reimbursement to AGIP calculated by estimating the probability of collection of the financial receivable with OCP Ltd. prior
to its maturity in 2021.
(3) Calculated based on the
present value of expected dividend flows.
(4) Disclosed under “Share
of profit (loss) from associates and joint ventures”
Schedule of participation in exploration and production of oil and gas areasAs
of December 31, 2019, the Company and associates are part of the joint operations and consortia for the exploration and production
of oil and gas as indicated below:
Participation Duration
Up To
Name Location Direct Indirect Operator
Argentine
production
Río
Neuquén Río
Negro and Neuquén 31.43%
and 33.07% - YPF 2027/2051
Sierra
Chata Neuquén 45.55% - PAMPA 2053
El
Mangrullo Neuquén 100.00% - PAMPA 2053
La
Tapera - Puesto Quiroga Chubut 35.67% - Tecpetrol 2027
El
Tordillo Chubut 35.67% - Tecpetrol 2027
Aguaragüe Salta 15.00% - Tecpetrol 2023/2027
Gobernador
Ayala Mendoza 22.51% - Pluspetrol 2036
Anticlinal
Campamento Neuquén 15.00%
- Oilstone 2026
Estación
Fernández Oro Río
Negro 15.00% - YPF 2026
Río
Limay este (Ex Senillosa) (1) Neuquén 85.00% - PAMPA 2040
Veta
Escondida y Rincón de Aranda Neuquén 55.00% - PAMPA 2027
Rincón
del Mangrullo Neuquén 50.00% - YPF 2052
Chirete Salta 50.00% - High
Luck Group Limited 2020/2045
Foreign
(2)
Oritupano
- Leona Venezuela - 22.00% PDVSA
2025
Acema
Venezuela - 34.49% PDVSA
2025
La
Concepción Venezuela - 36.00% PDVSA
2025
Mata Venezuela - 34.49% PDVSA
2025
Argentine
exploration
Parva
Negra Este (3) Neuquén 42.50% - PAMPA 2019
Río
Atuel Mendoza 33.33% - Petrolera
El Trebol 2020
Borde
del Limay (1) Neuquén 85.00% - PAMPA 2015
Los
Vértices (1) Neuquén 85.00% - PAMPA 2015
Las
Tacanas Norte Neuquén 90.00% - PAMPA 2023
(1) In the process of
being transferred to GyP
(2) Corresponding to
the following stakes: 22% in Petroritupano S.A., 36% in Petrowayú S.A., 34.49% in Petroven-Bras S.A. and 34.49% in Petrokariña
S.A (Venezuelan mixed companies) regulating the exploitation of the Oritupano Leona, La Concepción, Acema and Mata blocks,
respectively, and incorporated as a result of the purchase of Petrobras Participaciones S.L.’s capital stock in July
2016, without obtaining the Venezuelan Government’s authorizations regarding the change of indirect control. The Company
has expressed to the Venezuelan Government authorities its willingness to negotiate the transfer of its shares to Corporación
Venezolana de Petróleo S.A.
(3) In the process of
requesting appraisal.
Schedule of exploratory well costsThe
following table provides the year end balances and activity for exploratory well costs, during the years ended December 31, 2020,
2019 and 2018:
12.31.2020 12.31.2019 12.31.2018
At
the beginning of the year 33 19 12
Increases 24 30 8
Transferred
to development (7) (11) -
Loss
of the year - (5) (1)
At
the end of the year 50 33 19
Number
of wells at the end of the year 12 9 7

6. RISKS (Tables)

6. RISKS (Tables)12 Months Ended
Dec. 31, 2020
Risks
Schedule of exposure to the price riskThe
Company estimates that provided all other variables remain constant, a 10% revaluation/(devaluation) of each market price would
generate the following increase/(decrease) in the 2019 fiscal year’s income/(loss), before income tax in relation to financial
assets at fair value through profit and loss detailed in Note 12.2 to these Consolidated Financial Statements:
Increase
of the result for the year
Financial
assets 12.31.2020 12.31.2019
Shares 4 2
Government
securities 21 11
Investment
funds 9 24
Variation
of the result of the year 34 37
Schedule of borrowings classified by interest rate The
following chart shows the breakdown of the Company’s borrowings classified by interest rate and the currency in which they
are denominated:
12.31.2020 12.31.2019
Fixed
interest rate:
Argentinian
pesos 53 143
U.S
dollar 1,318 1,687
Subtotal
loans granted at a fixed interest rate 1,371 1,830
Floating
interest rates:
Argentinian
pesos 133 10
U.S
dollar 82 64
Subtotal
loans granted at a floating interest rate 215 74
Non
interest accrued
Argentinian
pesos 8 17
U.S
dollar 20 26
Subtotal
no interest accrued 28 43
Total
borrowings 1,614 1,947
Schedule of expected credit loss on trade receivables and financial assets ratesThe
expected credit loss on trade receivables and financial assets as of December 31, 2020, 2019 and 2018 amounts to US$ 12 million,
US$ 1 million and US$ 13 million, respectively and was determined based on credit loss rates calculated for days past due detailed
below:
12.31.2020 Undue 30
days 60
days 90
days 120
days 150
days 180
days +
180 days
Generation 0.35% 1.11% 5.74% 9.78% 11.23% 19.77% 20.87% 22.71%
Oil
and Gas 0.49% 0.72% 5.96% 16.21% 16.23% 17.74% 17.76% 17.79%
Petrochemicals 0.02% 0.06% 0.72% 2.26% 9.95% 23.84% 19.14% 36.92%
Holding 12.58% 0.94% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
12.31.2019 Undue 30
days 60
days 90
days 120
days 150
days 180
days +
180 days
Generation 0.10% 0.35% 1.99% 2.95% 4.03% 5.59% 9.79% 16.13%
Oil
and Gas 0.53% 1.49% 9.45% 18.03% 18.50% 18.81% 18.90% 18.92%
Distribution
of energy 3.00% 3.00% 8.00% 18.00% 20.00% 45.00% 72.00% 72.00%
Petrochemicals 0.39% 0.73% 6.88% 16.66% 25.32% 29.59% 30.97% 43.05%
Holding 1.85% 2.81% 6.84% 17.15% 26.77% 43.21% 49.89% 65.29%
12.31.2018 Undue 30
days 60
days 90
days 120
days 150
days 180
days +
180 days
Generation 0.04% 0.09% 2.62% 3.39% 9.37% 13.56% 19.82% 28.88%
Oil
and Gas 2.20% 4.42% 11.11% 20.42% 42.85% 47.32% 49.20% 56.32%
Distribution
of energy 8.00% 8.00% 12.00% 19.00% 26.00% 59.00% 69.00% 69.00%
Petrochemicals 0.03% 0.08% 1.41% 4.98% 11.52% 20.36% 24.91% 25.24%
Holding 0.96% 1.25% 2.03% 2.85% 19.86% 26.41% 32.95% 32.97%
Schedule of loss allowance for financial assets and other receivablesThe
loss allowance for financial assets and other receivables adjustment as of January 1, 2018 for the application of the expected
credit losses methodology to the loss allowance as of December 31, 2017, based on the incurred loss model, is detailed as follows:
Financial
assets Other
receivables
Loss
allowance under IAS 39 as of 12.31.2017 22 7
Adjustment
to the opening balance of retained earnings 4 (1)
Loss
allowance calculated under IFRS 9 as of 01.01.2018 26 6
Schedule of liquidity indexThe
determination of the Company’s liquidity index for fiscal years ended December 31, 2020 and 2019 is detailed below:
12.31.2020 12.31.2019
Current
assets 948 1,362
Current
liabilities 448 854
Index 2.12 1.59
Schedule of financial liabilities contractual undiscounted cash flows maturityThe amounts shown in the table are the contractual undiscounted cash flows.
As
of December 31, 2020 Trade
receivables Trade
and other payables (1) Borrowings
Less
than three months 244 - 82
Three
months to one year 3 116 228
One
to two years - 7 111
Two
to five years - 3 645
More
than five years - 6 1,145
Total 247 132 2,211
As
of December 31, 2019 Trade
receivables Trade
and other payables (1) Borrowings
Less
than three months 495 - 95
Three
months to one year 5 454 188
One
to two years 8 11 288
Two
to five years - 70 834
More
than five years - 9 1,233
Total 508 544 2,638 (1)
Includes Lease Liabilities (see Note 18.1.2)
Schedule of financial leverage ratiosFinancial
leverage ratios as at December 31, 2020 and 2019 were as follows:
12.31.2020 12.31.2019
Total
borrowings 1,614 1,947
Less:
cash and cash equivalents, and financial assets at fair value through profit and loss (466) (590)
Net
debt 1,148 1,357
Total
capital attributable to owners 2,576 3,274
Leverage
ratio 44.57% 41.45%

7. SEGMENT INFORMATION (Tables)

7. SEGMENT INFORMATION (Tables)12 Months Ended
Dec. 31, 2020
Disclosure of operating segments [abstract]
Schedule of operating segmentsThe
Company manages its operating segment based on its individual net results.
Consolidated
profit and loss information for the year ended December 31, 2020 Generation Distribution Oil
and gas Petrochemicals Holding
and others Eliminations Consolidated
Revenue 559 - 227 265 20 - 1,071
Intersegment
revenue - - 67 - - (67) -
Cost
of sales (254) - (243) (233) - 67 (663)
Gross
profit 305 - 51 32 20 - 408
Selling
expenses (2) - (28) (8) - - (38)
Administrative
expenses (30) - (42) (3) (18) - (93)
Exploration
expenses - - - - - - -
Other
operating income 35 - 9 2 10 - 56
Other
operating expenses (6) - (17) (6) (7) - (36)
Impairment
of property, plant and equipment, intangible assets and inventories (128) - - (11) - - (139)
Share
of profit from associates and joint ventures 67 - (5) - 23 - 85
Operating
income 241 - (32) 6 28 - 243
Finance
income 3 - 7 - 1 (2) 9
Finance
costs (73) - (100) (3) (3) 2 (177)
Other
financial results 1 - 44 5 34 - 84
Financial
results, net (69) - (49) 2 32 - (84)
Profit
before income tax 172 - (81) 8 60 - 159
Income
tax (33) - 23 (2) (23) - (35)
Profit
(loss) for the year from continuing operations 139 - (58) 6 37 - 124
Loss
for the year from discontinued operations - (592) - - - - (592)
(Loss)
profit for the year 139 (592) (58) 6 37 - (468)
Depreciation
and amortization 95 81 108 2 - - 286
Consolidated
profit and loss information for the year ended December 31, 2020 Generation Distribution Oil
and gas Petrochemicals Holding
and others Eliminations Consolidated
Total
profit (loss) attributable to:
Owners
of the company 147 (499) (58) 6 37 - (367)
Non
- controlling interest (8) (93) - - - - (101)
Consolidated
statement of financial position as of December 31, 2020
Assets 1,595 1,356 1,085 107 832 (85) 4,890
Liabilities 707 1,021 1,174 126 178 (85) 3,121
Net
book values of property, plant and equipment 1,015 - 543 19 33 - 1,610
Additional
consolidated information as of December 31, 2020
Increases
in property, plant and equipment, intangibles assets and right-of-use assets 61 135 41 3 2 - 242
Consolidated profit and loss information for the year ended December 31, 2019 Generation Distribution Oil and gas Petrochemicals Holding and others Eliminations Consolidated
Revenue 819 - 178 321 20 - 1,338
Intersegment revenue - - 270 - - (270) -
Cost of sales (470) - (313) (298) - 270 (811)
Gross profit (loss) 349 - 135 23 20 - 527
Selling expenses (3) - (12) (9) (2) - (26)
Administrative expenses (32) - (47) (4) (22) - (105)
Exploration expenses - - (9) - - - (9)
Other operating income 58 - 5 5 11 - 79
Other operating expenses (11) - (11) (9) (12) - (43)
Impairment of property, plant and equipment, intangible assets and inventories (52) - (10) - - - (62)
Share of profit (loss) from joint ventures and associates 13 - 21 - 67 - 101
Operating income 322 - 72 6 62 - 462
Finance income 2 - 17 - 5 (1) 23
Finance costs (82) - (94) (8) (4) 1 (187)
Other financial results 86 - 89 18 (18) - 175
Financial results, net 6 - 12 10 (17) - 11
Profit before income tax 328 - 84 16 45 - 473
Income tax (80) - (16) (5) 231 - 130
Profit for the year from discontinuing operations 248 - 68 11 276 - 603
Profit for the year from discontinued operations - 197 - - - - 197
Profit for the year 248 197 68 11 276 - 800
Depreciation and amortization 71 79 112 1 - - 263
Consolidated
profit and loss information for the year ended December 31, 2019 Generation Distribution Oil
and gas Petrochemicals Holding
and others Eliminations Consolidated
Total
profit attributable to:
Owners of the company 239 98 68 11 276 - 692
Non - controlling interest 9 99 - - - - 108
Consolidated
statement of financial position as of December 31,2019
Assets 1,472 1,480 1,261 136 1,527 (192) 5,684
Liabilities 1,226 1,792 465 122 (160) (170) 3,275
Net
book values of property, plant and equipment 1,152 1,691 612 18 34 - 3,507
Additional
consolidated information as of December 31, 2019
Increases in property,
plant and equipment 240 173 191 4 3 - 611
Consolidated
profit and loss information for the year ended December 31, 2018 Generation Distribution Oil
and gas Petrochemicals Holding
and others Eliminations Consolidated
Revenue 604 - 458 338 36 - 1,436
Intersegment revenue 2 - 63 - - (65) -
Cost of sales (273) - (287) (334) - 63 (831)
Gross profit (loss) 333 - 234 4 36 (2) 605
Selling expenses (1) - (19) (13) (4) - (37)
Administrative expenses (41) - (56) (6) (27) - (130)
Exploration expenses - - (1) - - - (1)
Other operating income 61 - 141 6 15 - 223
Other operating expenses (17) - (114) (20) (6) 1 (156)
Impairment of property,
plant and equipment - - - (32) - - (32)
Share of profit (loss)
from joint ventures and associates (11) - 37 - 92 - 118
Income from the sale
of associates - - 28 - - - 28
Operating income
(loss) 324 - 250 (61) 106 (1) 618
Gain on net monetary
position 233 - 107 49 12 2 403
Finance income 2 - 15 - 14 (1) 30
Finance costs (85) - (79) (15) (6) 1 (184)
Other financial results (365) - (512) (39) 108 - (808)
Financial results,
net (215) - (469) (5) 128 2 (559)
Profit (loss) before
income tax 109 - (219) (66) 234 1 59
Income tax (3) - 57 12 (34) - 32
Profit
(loss) for the year from continuing operations 106 - (162) (54) 200 1 91
Profit for the
year from discontinued operations - 116 49 - 31 - 196
Profit
(loss) for the year 106 116 (113) (54) 231 1 287
Depreciation and amortization 66 69 92 6 1 - 234
Consolidated
profit and loss information for the year ended December 31, 2018 Generation Distribution Oil
and gas Petrochemicals Holding
and others Eliminations Consolidated
Total
profit (loss) attributable to:
Owners of the company 100 61 (115) (54) 231 1 224
Non - controlling interest 6 55 2 - - - 63
Consolidated
statement of financial position as of December 31,2018
Assets 1,414 2,133 1,237 153 872 (137) 5,672
Liabilities 1,054 1,241 1,273 198 247 (136) 3,877
Additional
consolidated information as of December 31, 2018
Increases in property,
plant and equipment 235 227 192 4 7 - 665
Net
book values of property, plant and equipment 1,036 1,657 554 15 54 - 3,316

8. REVENUE (Tables)

8. REVENUE (Tables)12 Months Ended
Dec. 31, 2020
Revenue [abstract]
Schedule of revenue 12.31.2020 12.31.2019 12.31.2018
Energy
sales to the Spot Market 179 249 274
Energy
sales by supply contracts 323 285 278
Fuel
self-supply 54 282 51
Other
sales 3 3 1
Generation
sales subtotal 559 819 604
Oil,
gas and liquid sales 217 171 454
Other
sales 11 7 4
Oil
and gas sales subtotal 228 178 458
Technical assistance
services and administartion sales 19 20 36
Holding
and others subtotal 19 20 36
Petrochemicals
products 265 321 338
Petrochemicals
sales subtotal 265 321 338
Total
revenue 1,071 1,338 1,436

9. COST OF SALES (Tables)

9. COST OF SALES (Tables)12 Months Ended
Dec. 31, 2020
Cost Of Sales
Schedule of cost of sales 12.31.2020 12.31.2019 12.31.2018
Inventories
at the beginning of the year 153 137 113
Plus:
Charges for the year
Purchases of
inventories, energy and gas 153 353 378
Salaries and
social security charges 51 57 66
Benefits to
employees 11 9 6
Accrual of defined
benefit plans 4 4 2
Works contracts,
fees and compensation for services 55 60 61
Depreciation
of property, plant and equipment 194 171 153
Intangible assets
amortization 5 6 6
Right-of-use
assets amortization 1 2 -
Transport of
energy 5 4 4
Transportation
and freights 20 22 14
Consumption
of materials 17 21 43
Penalties - 1 1
Maintenance 26 27 24
Canons and royalties 42 59 74
Environmental
control 4 3 5
Rental and insurance 23 21 13
Surveillance
and security 2 6 6
Taxes, rates
and contributions 3 4 5
Other 2 (4) (6)
Subtotal 618 826 855
Gain
on monetary position 8 1 -
Less:
Inventories at the end of the year (116) (153) (137)
Total
cost of sales 663 811 831

10. OTHER ITEMS OF THE STATEM_2

10. OTHER ITEMS OF THE STATEMENT OF COMPREHENSIVE INCOME (Tables)12 Months Ended
Dec. 31, 2020
Other Items Of Statement Of Comprehensive Income
Schedule of selling expenses 12.31.2020 12.31.2019 12.31.2018
Salaries
and social security charges 3 5 5
Benefits
to employees - 1 -
Fees
and compensation for services 3 2 2
Compensation
agreements 1 (1) 2
Depreciation
of property, plant and equipment - - 1
Taxes,
rates and contributions 8 10 17
Net
impairment losses on financial assets 12 (2) 2
Transport 9 9 6
Other 2 2 2
Total
selling expenses 38 26 37
Schedule of administrative expenses 12.31.2020 12.31.2019 12.31.2018
Salaries
and social security charges 34 38 57
Benefits
to employees 4 8 5
Accrual
of defined benefit plans 7 7 1
Fees
and compensation for services 26 29 40
Compensation
agreements - - 3
Directors'
and Syndicates' fees 7 9 4
Depreciation
of property, plant and equipment 5 7 5
Consumption
of materials - 1 1
Maintenance 1 1 2
Transport
and per diem 1 1 2
Rental
and insurance 1 1 1
Surveillance
and security 1 - 2
Taxes,
rates and contributions 2 1 4
Communications 1 2 2
Other 3 - 1
Total
administrative expenses 93 105 130
Schedule of exploration expenses 12.31.2020 12.31.2019 12.31.2018
Geological and geophysical
expenses - 4 -
Decrease in unproductive
wells - 5 1
Total
exploration expenses - 9 1
Schedule of other operating income and expensesOther
operating income 12.31.2020 12.31.2019 12.31.2018
Recovery
of doubtful accounts 3 - -
Insurrance
recovery 3 4 -
Services
to third parties 6 10 11
Profit
for property, plant and equipment sale 1 - 3
Dividends
received 1 1 1
Reversal
of contingencies 2 1 4
Contractual
penalty 7 - -
Commercial
interests 30 52 51
Natural
Gas Surplus Injection Promotion Program - - 23
Compensation
for transaction agreement in Ecuador - - 99
Other 3 11 31
Total
other operating income 56 79 223
Other
operating expenses
Provision for
contingencies (7) (5) (16)
Decrease in property,
plant and equipment (1) - (2)
Allowance for
tax credits - (4) -
Tax on bank transactions (11) (16) (14)
Cost for services provided to third parties - - (1)
Donations and
contributions (3) (2) (2)
Institutional
promotion (2) (2) (3)
Extraordinary
canon - - (3)
Onerous contract
(Ship or Pay) - - (7)
Tax contingencies
in Ecuador - - (69)
Other (12) (14) (39)
Total
other operating expenses (36) (43) (156)
Schedule of financial resultsNote 12.31.2020 12.31.2019 12.31.2018
Gain
on monetary position, net - - 403
Finance
income
Financial
interest 1 11 23
Other
interest 8 12 7
Total
finance income 9 23 30
Finance
cost
Commercial
interest - (2) -
Fiscal
interest (3) (6) (7)
Financial interest
(1) (164) (165) (157)
Other
interest (3) (10) (15)
Other
financial expenses (7) (4) (5)
Total
financial expenses (177) (187) (184)
Other
financial results
Foreign
currency exchange difference, net 14 (6) (780)
Changes
in the fair value of financial instruments 30 88 44
Gains
(losses) from present value measurement 2 55 (74)
Results
for the repurchase of corporate bonds 38 25 2
Other
financial results - 13 -
Total
other financial results 84 175 (808)
Total
financial results, net (84) 11 (559) (1)
Schedule of income tax benefit expenseThe
breakdown of income tax charge is:
12.31.2020 12.31.2019 12.31.2018
Current
tax 13 22 9
Deferred
tax 22 (186) (38)
Other
comprehensive income - - 1
Difference
in the estimate of previous fiscal year income tax and the income tax statement - - (4)
Optional
tax revaluation - 34 -
Total loss income
tax 35 (130) (32) Below
is a reconciliation between income tax expense and the amount resulting from application of the tax rate on the income before
taxes:
12.31.2020 12.31.2019 12.31.2018
Profit
before income tax 159 473 59
Current tax rate 30% 30% 30%
Result
at the tax rate 48 142 18
Share
of profit of associates and joint ventures (26) (25) (3)
Non-taxable
results (5) (38) 7
Effects
of exchange differences and traslation effect of property, plant and equipment and intangible assets, net 88 93 -
Adjustment
of valuation of property, plant and equipment and intangible assets (156) (202) -
(Loss)
gain on monetary position, net - - (38)
Effect
of tax rate change in deferred tax 19 37 (26)
Adjustment
effect for tax inflation 74 82 -
Payment
of optional tax revaluation - 34 -
Special
tax, revaluation of property, plant and equipment - (169) -
Difference
in the estimate of previous fiscal year income tax and the income tax statement (7) (86) 4
Deferred
tax not previously recognized - - 4
Other - 2 2
Total loss
income tax 35 (130) (32)
Schedule of consolidated accumulated tax lossesAs
of December 31, 2020 and 2019 consolidated accumulated tax losses amount to US$ 504 million and US$ 444 million, respectively,
which may be offset, pursuant to the applicable tax laws, with tax profits corresponding to future fiscal years, at
the tax rate that is estimated to apply
Fiscal
year generation Fiscal
year prescription 12.31.2020 12.31.2019
2016 2021 3 4
2017 2022 2 3
2018 2023 26 38
2019 2024 59 66
2020 2025 36 -
126 111

11. NON-FINANCIAL ASSETS AND _2

11. NON-FINANCIAL ASSETS AND LIABILITIES (Tables)12 Months Ended
Dec. 31, 2020
Non-financial Assets And Liabilities
Schedule of changes in property plant and equipment Original
values
Type
of good At
the beginning Increases Impairment Transfers Decreases Traslation
effect Reclasification
to assets clasified as held for sales At
the end
Land 14 - - - - - - 14
Buildings 202 1 (29) 8 - (1) (43) 138
Equipment and
machinery 1,254 2 (158) 268 (3) - - 1,363
High, medium
and low voltage lines 1,049 2 (111) 49 (2) (34) (953) -
Substations 367 15 (47) 50 - (11) (374) -
Transforming
chamber and platforms 219 3 (26) 14 (2) (5) (203) -
Meters 226 1 (23) 16 - (7) (213) -
Wells 672 3 - 93 (4) - - 764
Mining property 253 - - - - - - 253
Vehicles 22 3 (1) - - (1) (23) -
Furniture and
fixtures and software equipment 74 6 (1) 3 - (1) (29) 52
Communication
equipments 15 - - 4 - - (16) 3
Materials and
spare parts 37 15 (2) (12) - - (7) 31
Petrochemical
industrial complex 14 - - 3 - - - 17
Work in progress 792 175 (1) (490) - (10) (333) 133
Advances to
suppliers 18 13 - (6) - - (3) 22
Other
goods 6 - (4) - - - - 2
Total
at 12.31.2020 5,234 239 (403) - (11) (70) (2,197) 2,792
Total
at 12.31.2019 4,868 591 (112) - (40) (73) - 5,234
Depreciation Net
book values
Type
of good At
the beginning Decreases Impairment For
the year (1) Traslation
effect Reclasification
to assets clasified as held for sales At
the end At
the end At
12.31.2019
Land - - - - - - - 14 14
Buildings (75) - 13 (7) - 8 (61) 77 127
Equipment and
machinery (411) 2 68 (96) - - (437) 926 843
High, medium
and low voltage lines (344) 1 - (36) 11 368 - - 705
Substations (115) - - (14) 4 125 - - 252
Transforming
chamber and platforms (63) - - (8) 3 68 - - 156
Meters (87) - - (10) 3 94 - - 139
Wells (386) - - (74) - - (460) 304 286
Mining property (144) - - (17) - - (161) 92 109
Vehicles (21) - - (3) - 18 (6) (6) 1
Furniture and
fixtures and software equipment (57) - 1 (8) - 20 (44) 8 17
Communication
equipments (10) - - (1) - 10 (1) 2 5
Materials and
spare parts (3) - - (1) - 1 (3) 28 34
Petrochemical
industrial complex (8) - - (1) - - (9) 8 6
Work in progress - - - - - - - 133 792
Advances to
suppliers - - - - - - - 22 18
Other
goods (3) - 3 - - - - 2 3
Total
at 12.31.2020 (1,727) 3 85 (276) 21 712 (1,182) 1,610
Total
at 12.31.2019 (1,552) 12 50 (255) 18 - (1,727) 3,507
(1) Includes
US$ 77 million corresponding to discontinued operations for 2020 and 2019.
Schedule of changes in intangible assets Original
values
Type
of good At
the beginning Impairment Traslate
Effect Reclasification
to assets clasified as held for sales
At
the end
Concession agreements 270 (147) (3) (100) 20
Goodwill 35 - - - 35
Intangibles identified
in acquisitions of companies 7 - - - 7
Total
at 12.31.2020 312 (147) (3) (100) 62
Total
at 12.31.2019 314 - (2) - 312
Depreciation
Type
of good At
the beginning Impairment For
the year (1) Reclasification
to assets clasified as held for sales At
the end
Concession agreements (159) 129 (5) 16 (19)
Intangibles identified
in acquisitions of companies (2) - - - (2)
Total
at 12.31.2020 (161) 129 (5) 16 (21)
Total
at 12.31.2019 (154) - (7) - (161)
Net
book values
Type
of good At
the end At
12.31.2019
Concession agreements 1 111
Goodwill 35 35
Intangibles identified
in acquisitions of companies 5 5
Total
at 12.31.2020 41
Total
at 12.31.2019 151
(1) As of December 31,
2020, and considering the assumptions detailed in Note 11.1, the assessment of recoverability for the Diamante and Nihuiles
hydroelectric power plants from the Power Generation segment, with income generated in the spot market, resulted in the recognition
of impairment losses for US$ 18 million.
(2) It includes US$
1 million and US$ 1 million corresponding to Discontinued operations for fiscal year 2020 and 2019, respectively.
Schedule of deferred tax assets and liabilitiesThe
composition of the deferred tax assets and liabilities is as follows:
12.31.2019 Profit
(loss) Gain
on monetary position, net Reclasification
to assets clasified as held Other
reclasifications 12.31.2020
Tax
loss carryforwards 111 18 - (3) - 126
Intangible
assets - 3 - - - 3
Trade
and other receivables 13 9 - (16) - 6
Trade
and other payables 13 (2) - (8) - 3
Salaries
and social security payable 2 4 - (3) - 3
Defined
benefit plans 7 (1) - (1) - 5
Provisions 39 (1) - (10) - 28
Adjustment
for tax inflation 8 (4) - - - 4
Other - 1 - - - -
Deferred
tax asset 193 27 - (41) - 178
Property,
plant and equipment (384) 89 10 271 - (13)
Adjustment
for tax inflation (99) (81) 1 41 136 (2)
Investments
in companies (8) (17) - - - (25)
Intangible
assets (13) 2 - - - (11)
Inventory (10) (1) - 5 - (6)
Trade
and other receivables (4) (3) - - - (7)
Financial
assets at fair value through profit and loss (11) 3 - 4 - (4)
Taxes
payable (4) 1 - - - (3)
Other - - - - - -
Deferred
tax liabilities (533) (7) 11 321 136 (71)
12.31.2018 Profit
(loss) Gain
on monetary position, net 12.31.2019
Tax
loss carryforwards 52 59 - 111
Trade
and other receivables 12 1 - 13
Trade
and other payables 52 (37) (2) 13
Salaries
and social security payable 1 1 - 2
Defined
benefit plans 9 (2) - 7
Provisions 32 7 - 39
Taxes
payable 6 (6) - -
Adjustment
for tax inflation - 8 - 8
Other 2 (2) - -
Deferred
tax asset 166 29 (2) 193
Property,
plant and equipment (334) (55) 5 (384)
Adjustment
for tax inflation - (99) - (99)
Investments
in companies (19) 11 - (8)
Intangible
assets (193) 175 5 (13)
Inventory - (10) - (10)
Trade
and other receivables (7) 3 - (4)
Financial
assets at fair value through profit and loss (9) (2) - (11)
Borrowings (3) 3 - -
Taxes
payable - (4) - (4)
Other (6) 6 - -
Deferred
tax liabilities (571) 28 10 (533)
Schedule of net deferred tax assets and liabilities12.31.2020 12.31.2019
Deferred
tax asset 108 28
Deferred
tax liabilities (1) (368)
Deferred
tax assets (liabilities), net 107 (340)
Schedule of inventories 12.31.2020 12.31.2019
Materials
and spare parts 79 95
Advances
to suppliers 3 21
In
process and finished products 34 37
Total 116 153
Schedule of provisions 12.31.2020 12.31.2019
Non-Current
Provisions
for contingencies 91 123
Asset
retirement obligation and dismantling of wind turbines 19 20
Environmental
remediation 1 1
Other
provisions - 1
111 145
Current
Provisions for
contingencies 12 16
Asset
retirement obligation and dismantling of wind turbines 2 2
Environmental
remediation 2 2
16 20
Schedule of changes in provisions 12.31.2020
For
contingencies Asset
retirement obligation and dismantling of wind turbines For
environmental remediation
At the beginning of the year 139 22 3
Increases 21 2 -
Decreases (1) - -
Exchange differences on translation (15) - -
Reversal of unused
amounts (8) (3) -
Reclasification
liabilities associated to assets classified as held for sale (33) - -
At the end of the
year 103 21 3
12.31.2019
For
contingencies Asset
retirement obligation and dismantling of wind turbines For
environmental remediation
At the beginning
of the year 142 22 5
Increases 41 3 -
Exchange differences on translation (4) - -
Gain on monetary position, net (17) - -
Decreases (10) - (2)
Reversal of
unused amounts (13) (3) -
At
the end of the year 139 22 3
12.31.2018
For
contingencies Asset
retirement obligation For
environmental remediation
At the beginning
of the year 141 42 6
Increases 106 37 6
Reclasification - (18) -
Gain on monetary
position, net (52) (18) (2)
Decreases (23) (5) (5)
Reversal of
unused amounts (30) (16) -
At
the end of the year 142 22 5
Schedule of income tax and minimum notional income tax liabilityNote 12.31.2020 12.31.2019
Non-current
Income tax, net of
witholdings and advances 10.6 131 10
Total
non current 131 10
Current
Income
tax, net of witholdings and advances 11 53
Total
current 11 53
Schedule of tax liabilities 12.31.2020 12.31.2019
Non-current
Sales
tax 2 1
Extraordinary
Canon - 3
Total
non-current 2 4
Current
Value
added tax 12 38
Municipal,
provincial and national contributions - 3
Personal
assets tax provision 1 3
Payment
plans 1 1
Municipal
taxes - 2
Tax
withholdings to be deposited 2 6
Royalties 4 4
Extraordinary
Canon 16 12
Other - 3
Total
current 36 72
Schedule of defined benefit plan information12.31.2020
Present
value of the obligation Fair
value of plan assets Net
liability at the end of the year
Liabilities
at the beginning 36 (5) 31
Items classified
in profit or loss
Current
services cost 3 - 3
Cost
for interest 16 (2) 14
Items classified
in other comprehensive
Actuarial
(gains) losses (3) 1 (2)
Benefit payments (2) - (2)
Reclasification
liabilities associated to assets classified as held for sale (10) - (10)
Gain
on monetary position, net (15) 2 (13)
At
the end 25 (4) 21
12.31.2019
Present
value of the obligation Present
value of assets Net
liability at the end of the year
Liabilities
at the beginning 40 (5) 35
Items classified
in profit or loss
Current
services cost 3 - 3
Cost
for interest 15 (2) 13
Items classified
in other comprehensive
Actuarial
(gains) losses (2) - (2)
Benefit payments (2) - (2)
Gain on monetary position,
net (18) 2 (16)
At
the end 36 (5) 31
12.31.2018
Present
value of the obligation Present
value of assets Net
liability at the end of the year
Liabilities at the beginning 47 (3) 44
Items classified
in profit or loss
Current
services cost 2 - 2
Cost
for interest 9 (1) 8
Past
services cost (5) - (5)
Items classified
in other comprehensive
Actuarial
(gains) losses 6 (2) 4
Benefit payments (3) - (3)
Gain on monetary position,
net (16) 1 (15)
At
the end 40 (5) 35
Schedule of estimated expected benefits payments12.31.2020
Less
than one year 4
One
to two years 2
Two
to three years 2
Three
to four years 2
Four
to five years 2
Six
to ten years 10
Schedule of principal actuarial assumptionsSignificant
actuarial assumptions used were as follows:
12.31.2020 12.31.2019 12.31.2018
Discount rate 4% 5% 5%
Salaries increase 1% 1% 1%
Average inflation 46% 27% 27%
Schedule of sensitivity analyses on actuarial assumptions variationsThe
following sensitivity analysis shows the effect of a variation in the discount rate and salaries increase on the obligation amount:
12.31.2020
Discount rate:
4%
Obligation 27
Variation 2
10%
Discount rate: 6%
Obligation 23
Variation (2)
(9%)
Salaries increase: 0%
Obligation 24
Variation (1)
(4%)
Salaries increase: 2%
Obligation 26
Variation 1
5%
Schedule of salaries and social security payable 12.31.2020 12.31.2019
Non-current
Seniority
- based bonus - 3
Early
retirements payable - 1
Total
non-current - 4
Current
Salaries
and social security contributions 3 22
Provision
for vacations 7 17
Provision
for gratifications and annual bonus for efficiency 13 26
Total
current 23 65

12. FINANCIAL ASSETS AND LIAB_2

12. FINANCIAL ASSETS AND LIABILITIES (Tables)12 Months Ended
Dec. 31, 2020
Financial Assets And Liabilities Abstract
Schedule of financial assets at amortized cost 12.31.2020 12.31.2019
Non-current
Public
securities (1) - 18
Term
deposit 100 -
Total
non-current 100 18
Current
Public
securities (1) 25 54
Total
current 25 54
(1) The public securities were received in accordance
with the mechanism set forth by SGE Resolution No. 54/19 for the settlement of receivables under Natural Gas Surplus Injection
Promotion Programs. See Note 2.4.3.1.
Schedule of financial assets at fair value through profit and loss 12.31.2020 12.31.2019
Non-current
Shares 11 11
Total
non-current 11 11
Current
Government
securities 204 113
Shares 29 8
Investment
funds 92 244
Total
current 325 365
Schedule of trade and other receivablesNote 12.31.2020 12.31.2019
Non-Current
Receivables
from oil and gas sales - 8
Trade
receivables, net - 8
Non-Current
Tax
credits 5 3
Related
parties 17 29 53
Prepaid
expenses - 1
Credit
with RDSA - 35
Allowance
for doubtful accounts - (35)
Other 9 14
Other
receivables, net 43 71
Total
non-current 43 79
Note 12.31.2020 12.31.2019
Current
Receivables
from energy distribution sales - 226
Receivables
from MAT 15 17
CAMMESA 178 168
Receivables
from oil and gas sales 23 48
Receivables
from petrochemistry sales 39 54
Related
parties 17 4 6
Government
of the PBA and CABA by Social Rate - 4
Other 4 10
Allowance
for doubtful accounts (16) (33)
Trade
receivables, net 247 500
Current
Tax
credits 5 10
Advances
to suppliers - -
Related
parties 17 41 8
Prepaid
expenses 4 2
Receivables
for non-electrical activities 5 11
Financial
credit 4 5
Guarantee
deposits 3 5
Contractual
penalty to collect 3 -
Insurance
to recover 6 -
Expenses
to be recovered 7 10
Credits
for the sale of property, plant and equipment - 1
Credit
with RDSA - 1
Other 16 14
Allowance
for other receivables - (6)
Other
receivables, net 94 61
Total
current 341 561
Schedule of allowance for the impairment of trade receivablesThe
movements in the allowance for the impairment of trade receivables are as follows:
12.31.2020 12.31.2019 12.31.2018
At
the beginning 68 34 26
Allowance
for impairment 63 58 34
Utilizations (7) (13) (10)
Reversal
of unused amounts (3) (2) (1)
Exchange
differences on translation (2) (1) -
Gain
on monetary position, net (28) (8) (15)
Reclasification
to assets clasified as held for sales (75) - -
At
the end of the year 16 68 34
Schedule of allowance for the impairment of other receivablesThe
movements in the allowance for the impairment of other receivables are as follows:
Note 12.31.2020 12.31.2019 12.31.2018
At
the beginning - 6 8 6
Allowance
for impairment 2 1 7
Gain
on monetary position, net - (1) (3)
Reversal
of unused amounts (7) (2) (2)
Reclasification
to assets clasified as held for sales (1) - -
At
the end of the year - 6 8
Schedule of cash and cash equivalents 12.31.2020 12.31.2019
Banks 70 57
Investment
funds 71 4
Time
deposits - 164
Total 141 225
Schedule of borrowingsNote 12.31.2020 12.31.2019
Non-Current
Financial
borrowings 75 161
Corporate
bonds (1) 1,297 1,603
1,372 1,764
Current
Bank
overdrafts 37 -
Financial
borrowings 88 137
Corporate
bonds 117 32
Related
parties 17 - 14
242 183
Total 1,614 1,947
(1) Net of repurchase
of own ONs
Schedule of changes in borrowingsThe
movements in the borrowings are as follows:
Note 12.31.2020 12.31.2019 12.31.2018
At the beginning 1,947 2,177 1,683
Proceeds from
borrowings 353 556 245
Payment of borrowings (300) (550) (240)
Accrued interest 176 185 179
Payment of borrowings'
interests (201) (148) (133)
Net foreign
currency exchange difference (18) 50 1,244
Results
for the repurchase of corporate bonds 12.5.2 (43) (27) (2)
Costs
capitalized in property, plant and equipment 11.1 10 17 8
Decrease
through offsetting with trade receivables - (135) -
Cancellation
through dividend compensation (12) - -
Gain
on monetary position, net (43) (87) (794)
Repurchase and
redemption of corporate bonds (155) (91) (13)
Reclasification
liabilities associated to assets classified as held for sale (100) - -
At
the end of the year 1,614 1,947 2,177
Schedule of borrowings compositionType of instrument Company Currency Residual value Interest Rate Expiration Book value as of 12.31.2020
Corporate bonds (1)
Serie 6 CB (2) PAMPA $ 76 Variable Badlar + 2.5% Aug-21 77
T Series CB (3) PAMPA US$ 389 Fixed 7.38% Jul-23 399
Class 1 CB (3) PAMPA US$ 636 Fixed 7.50% Jan-27 647
Serie 3 CB PAMPA US$ 293 Fixed 9.13% Apr-29 291
1,414
Financial loans (4)
PAMPA $ 18 Fixed 33% Apr-21 19
PAMPA $ 57 Variable Badlar + 7% may-21 61
PAMPA US$ 31 Variable Libor + 4.21% May-24 31
111
Other financial operations (5)
PAMPA US$ 2 Variable Libor Jul-21 2
PAMPA US$ 50 Variable Libor Aug-23 50
52
Bank overdrafts
PAMPA $ 36 Fixed Between 30% and 34% Jan-21 37
1,614
(1) In the months of July, October and November 2020, the Company paid at maturity Class 4, Class 5 and Series E CBs, the first two issued on April 30, 2020, for a face value of $ 1,238 million, $ 565 million and $ 575 million at a Badlar rate +3%, Badlar rate + 5% and Badlar rate + 0%, respectively.
(2) Issued on July 29, 2020.
(3) During the fiscal year ended December 31, 2020, the Company and its subsidiaries acquired Series T and Class 1 corporate bonds at their respective market values for a face value of US$ 148 million; therefore, the Company recorded profits for US$ 38 million, which are disclosed in the “Gain (Loss) on the repurchase of corporate bonds” line item under Other financial results. As of December 31, 2020, the Company, through its subsidiaries, held in its portfolio: Series T and Class I CBs for a face value of US$ 35 million and US$ 11 million, respectively.
(4) During the fiscal year ended December 31, 2020, the Company took on new financing with domestic financial entities, net of cancellations and early cancellations, for a total $1,600 million, and paid at maturity financing loans in the amount of US$ 92 million.
(5) On October 2, 2020, the Company was granted a credit facility for up to US$50 million at Libor rate plus 0.0%, which is secured by a Total Return Swap, the underlying asset of which is own CBs held in treasury by the Company for a total amount of US$185.9 million. Any disbursement requested by the Company under this agreement should be secured with term deposits held in BNP by the Company, and the owed principal may not exceed 95% of these funds. The cash flow generated by the assigned assets may be destined to: i) the extension of the above-mentioned credit facility; and/or ii) the cancellation of expenses, interest and/or disbursements. It is worth highlighting that BNP is not empowered to dispose of the Total Return Swap’s underlying asset, and may only use it to a limited extent to guarantee certain transactions, but may under no circumstances lose its condition as asset holder. The Company may cancel the agreement at any time, in whole or in part, without incurring any penalty, with no other requirement than the giving of notice by a reliable means or automatically in case any of the events of default stipulated in the agreement is verified. Finally, at the transaction’s maturity date, the counterparty should return to the Company the Total Return Swap’s underlying asset and any associated cash flow. The Company has received disbursements in the amount of US$ 51.5 million under certain credit facilities with BNP.
Type of instrument Company Currency Residual value Interest Rate Expiration Book value as of 12.31.2019
Corporate bonds (1)
2022 CB Edenor US$ 166 Fixed 9.75% 2022 139
Class E CB PAMPA $ 575 Fixed Badlar Nov-20 10
Class 1 CB (1) PAMPA US$ 687 Fixed 7.50% Jan-27 698
T Series CB (1) PAMPA US$ 487 Fixed 7.38% Jul-23 497
Serie 3 CB (1) PAMPA US$ 293 Fixed 9.13% Apr-29 291
1,635
Financial loans (2)
PAMPA US$ 84 Fixed Between 4.25% and 7.65% Jan-2020 to 88
PAMPA US$ 39 Variable 4.21% + Libor May-2024 39
PAMPA $ 7,775 Fixed Between 40% and 44.14% Apr-2021 to 146
Related parties 273
PAMPA US$ 13 Fixed 6.00% 2020 14
Financial loans
Edenor US$ 1,885 Fixed Libor + 4.27% Oct-20 25
25
1,947
(1) During the fiscal year ended December 31, 2019, the Company acquired own corporate bonds at their respective market values for a face value of US$ 62 million; therefore, the Company recorded consolidated profits for US$ 25 million, which are disclosed in the “Gain (Loss) on the repurchase of corporate bonds” line item under Other financial results. As of the closing of fiscal year
2019, Pampa held in its portfolio: Series T Corporate Bonds for a face value of US$ 14 million, Series 1 Corporate Bonds for
a face value of US$ 63 million and Series 3 Corporate Bonds for US$ 7 million, the latter issued on July 10, 2019.
(2) During the fiscal year ended December 31, 2019, the Company canceled banking debt (including pre-export finance facilities) for US$ 420 million and $ 550 million, and took on new debt for US$ 25 million and $ 8,349 million.
Schedule of trade and other payablesNote 12.31.2020 12.31.2019
Non-Current
Customer
contributions - 3
Customer
guarantees - 4
Trade
payables - 7
ENRE
Penalties and discounts - 64
Compensation
agreements 6 7
Lease
liability 10 12
Other
payables 16 83
Total
non-current 16 90
Current
Suppliers 92 212
CAMMESA - 155
Customer
contributions - 1
Customer
advances 2 7
Related
parties 17 5 8
Trade
payables 99 383
ENRE
Penalties and discounts - 57
Related
parties 17 - 5
Compensation
agreements 1 3
Payment
agreements with ENRE - 1
Lease
liability 2 4
Advances
received for sales of subsidiary 12 -
Other 2 1
Other
payables 17 71
Total
current 116 454
Schedule of financial instrumentsAs
of December 31, 2020 Financial
assets/liabilities at amortized cost Financial
assets/liabilities at fair value through profit and losss Subtotal
financial assets/liabilities Non
financial assets/liabilities Total
Assets
Trade receivables and other receivables 366 3 369 15 384
Financial assets at amortized cost
Term
deposit 100 - 100 - 100
Corporate
securities 25 - 25 - 25
Financial assets at fair value through profit
Government
securities - 204 204 - 204
Shares - 40 40 - 40
Investment
funds - 92 92 - 92
Derivative financial instruments - - - - -
Cash and cash equivalents 70 71 141 - 141
Total 561 410 971 15 986
Liabilities
Trade and other liabilities 130 - 130 2 132
Borrowings 1,614 - 1,614 - 1,614
Derivative financial instruments - - - - -
Total 1,744 - 1,744 2 1,746
As
of December 31, 2019 Financial
assets/liabilities at amortized cost Financial
assets/liabilities at fair value through profit and losss Subtotal
financial assets/liabilities Non
financial assets/liabilities Total
Assets
Trade receivables and other receivables 622 4 626 14 640
Financial assets at fair value through profit
and loss
Government
securities - 113 113 - 113
Shares - 19 19 - 19
Investment
funds - 244 244 - 244
Derivative financial
instruments - 4 4 - 4
Cash and cash equivalents 221 4 225 - 225
Total 843 388 1,231 14 1,245
Liabilities
Trade and other liabilities 408 7 415 129 544
Borrowings 1,947 - 1,947 - 1,947
Instrumentos financieros derivados - 3 3 - 3
Total 2,355 10 2,365 129 2,494
Schedule of income, expenses, gains and losses from financial instrumentsThe
income, expenses, gains and losses derived from each of the financial instrument categories are indicated below:
As
of December 31, 2020 Financial
assets/liabilities at amortized cost Financial
assets/liabilities at fair value through profit and losss Subtotal
financial assets/liabilities Non
Financial assets/ liabilities Total
Interest income 9 - 9 - 9
Interest expense (164) - (164) (6) (170)
Foreign exchange,
net 38 (35) 3 11 14
Results from
financial instruments at fair value - 30 30 - 30
Gains (losses)
from present value measurement 6 - 6 (4) 2
Other financial
results 36 - 36 (5) 31
Total (75) (5) (80) (4) (84)
As
of December 31, 2019 Financial
assets/liabilities at amortized cost Financial
assets/liabilities at fair value through profit and losss Subtotal
financial assets/liabilities Non
Financial assets/ liabilities Total
Interest income 72 3 75 - 75
Interest expense (163) - (163) (20) (183)
Foreign exchange,
net 5 (14) (9) 3 (6)
Results from
financial instruments at fair value - 88 88 - 88
Gains (losses)
from present value measurement 55 - 55 - 55
Other financial
results 32 - 32 2 34
Total 1 77 78 (15) 63
As
of December 31, 2018 Financial
assets/liabilities at amortized cost Financial
assets/liabilities at fair value through profit and losss Subtotal
financial assets/liabilities Non
Financial assets/ liabilities Total
Interest income 76 5 81 - 81
Interest expense (157) - (157) (22) (179)
Foreign exchange,
net (719) 23 (696) (84) (780)
Results from
financial instruments at fair value - 44 44 - 44
Gains (losses)
from present value measurement (74) - (74) - (74)
Other financial
results (1) - (1) (2) (3)
Total (875) 72 (803) (108) (911)
Schedule of fair value of financial instrumentsThe
following table shows the Company’s financial assets and liabilities measured at fair value as of December 31, 2020 and
2019:
As
of December 31, 2020 Level
1 Level
2 Level
3 Total
Assets
Financial
assets at fair value through
Government
securities 204 - - 204
Shares 29 - 11 40
Investment
funds 92 - - 92
Cash
and cash equivalents
Investment
funds 71 - - 71
Other
receivables 72 - - 72
Total assets 468 - 11 479
As
of December 31, 2019 Level
1 Level
2 Level
3 Total
Assets
Financial
assets at fair value through
Government
securities 113 - - 113
Shares 8 - 11 19
Investment
funds 244 - - 244
Cash
and cash equivalents
Investment
funds 4 - - 4
Derivative
financial instruments - 4 - 4
Other
receivables 4 - - 4
Total
assets 373 4 11 388
Liabilities
Derivative
financial instruments - 3 - 3
Trade
and other liabilities - 7 - 7
Total
liabilities - 10 - 10

13. EQUITY COMPONENTS (Tables)

13. EQUITY COMPONENTS (Tables)12 Months Ended
Dec. 31, 2020
Equity Components
Schedule of earnings (loss) per share As of December
31, 2020, 2019 and 2018, the Company does not hold any significant potential dilutive shares, therefore there are no differences
with the basic earning per share.
12.31.2020 12.31.2019 12.31.2018
Earning
for continuing operations attributable to the equity holders of the Company 132 594 85
Weighted average
amount of outstanding shares 40 48 52
Basic
and diluted earnings per share 3.30 12.38 1.63
(Loss) Earning
for discontinued operations attributable to the equity holders of the Company (499) 98 139
Weighted average
amount of outstanding shares 40 48 52
Basic
and diluted (loss) earnings per share from (12.48) 2.04 2.68
(Loss) earning
attributable to the equity holders of the Company (367) 692 224
Weighted average
amount of outstanding shares 40 48 52
Basic
and diluted (loss) earnings per share (9.18) 14.42 4.31

14. STATEMENT OF CASH FLOWS' _2

14. STATEMENT OF CASH FLOWS' COMPLEMENTARY INFORMATION (Tables)12 Months Ended
Dec. 31, 2020
Statement Of Cash Flows Complementary Information
Schedule of adjustments to reconcile net profit (loss) to cash flows generated by operating activitiesNote 12.31.2020 12.31.2019 12.31.2018
Income tax 10.6 35 (130) (32)
Accrued interest 132 110 105
Depreciations
and amortizations 9,
10.1 and 10.2 205 186 165
Constitution
of allowances, net 10.4
and 10.1 9 2 2
Provision of
provisions and tax payables, net 10.4 5 4 12
Share of profit
from joint ventures and associates 5.4.2 (85) (101) (118)
Income from the
sale of companies 5.2.1 - - (28)
Accrual of defined
benefit plans 9,
10.1 and 10.2 11 11 3
Net exchange
differences 10.5 (14) 6 780
Result from measurement
at present value 10.5 (2) (55) 74
Changes in the
fair value of financial instruments 10.5 (19) (88) (44)
Results from
property, plant and equipment sale and decreases 10.4
and 10.3 - 5 4
Results for the
repurchase of corporate bonds 10.5 (38) (25) (2)
Impairment
of property, plant and equipment, intangible assets and inventories 1.2
and 11.1 139 62 32
Dividends
received 10.4 (1) (1) (1)
Compensation
agreements 10.1
and 10.2 1 (1) 5
Result
from the sale of shareholdings in companies, property, plant and equipment 5.3.2 - - (44)
Onerous
contract (Ship or pay) 10.4 - - 7
Gain on monetary
position, net 10.5 - - (403)
Other 2 (8) 4
Total
adjustments to reconcile net profit to cash flows generated by operating activities 380 (23) 521
Schedule of changes in operating assets and liabilities 12.31.2020 12.31.2019 12.31.2018
Decrease (Increase)
in trade receivables and other receivables 19 65 (59)
(Increase) Decrease
in inventories (6) (20) 2
Increase (Decrease)
in trade payables and other payables 3 46 (114)
(Decrease) Increase
in salaries and social security payable (1) (2) (1)
Decrease in defined
benefit plans (2) (1) (2)
(Decrease) Increase
in tax payables (20) 4 37
Decrease in provisions (5) (7) (51)
Income tax and
minimum notional income tax paid (5) (42) (14)
(Payments) Proceeds
from derivative financial instruments, net (5) 9 (24)
Total
changes in operating assets and liabilities (22) 52 (226)
Schedule of significant non-cash transactions 12.31.2020 12.31.2019 12.31.2018
Acquisition
of property, plant and equipment through an increase in trade payables (8) (36) (56)
Borrowing
costs capitalized in property, plant and equipment (10) (17) (7)
Compensation
of loans through the assignment of dividends 12 - -
Decrease
in asset retirement obligation provision through property, plant and equipment (3) (1) (34)
Dividends
pending collection 20 - -
Constitution
of guarantee of derivative financial instruments, net through the delivery of financial assets at fair value through profit
or loss (1) 3 (20)
Cancellation
of other credits for capital contributions in associates - (17) -
Compensation
of investments at amortized cost through the transfer of other credits - (126) -
Loan
compensation through the transfer of trade receivables - 135 -
Increase
of right-of-use assets through an increase in other debts - 13 -

17. RELATED PARTIES' TRANSACT_2

17. RELATED PARTIES' TRANSACTIONS (Tables)12 Months Ended
Dec. 31, 2020
Related party transactions [abstract]
Schedule of operations related parties(1) Purchases of goods and services (2) Fees for services (3) Other operating expenses and income (4)
2020 2019 2018 2020 2019 2018 2020 2019 2018 2020 2019 2018
Associates and joint ventures
CTB 2 1 - - - - - - - - - -
Greenwind 1 1 - - - - - - - - (1) -
OCP - - - - - - - - - - - (7)
Refinor 10 18 16 (5) (19) (34) - - - - - -
TGS 20 29 51 (24) (22) (21) - - - - - -
Transener - - 1 - - - - - - - - -
Other related parties
Fundación - - - - - - - - - (2) (2) (2)
SACDE - - 1 - - (2) - - - - 1 -
Salaverri, Dellatorre, Burgio & Wetzler - - - - - - (1) (1) (1) - - -
Other - - - - (1) (2) - - - - - -
33 49 69 (29) (42) (59) (1) (1) (1) (2) (2) (9)
(1)
(2)
(3)
(4)
Finance income (1) Dividends received Payment of dividends
2020 2019 2018 2020 2019 2018 2020 2019 2018
Associates and joint ventures
Ciesa - - - - 53 19 - - -
Citelec - - - 13 16 - - - -
OCP 1 - - 21 6 - - - -
TGS 3 3 3 - - - - - -
Other related parties
EMESA - - - - - - (9) (1) (2)
Other - - - 1 1 - - - -
4 3 3 35 76 20 (9) (1) (2)
(1)
Schedule of balances with related partiesAs of December 31, 2020 Trade receivables Other receivables Trade payables
Current Non Current Current Current
Associates and joint ventures
Greenwind - - - 5
OCP - - 36 -
Refinor 2 - - -
TGS 2 29 5 -
4 29 41 5
As of December 31, 2019 Trade receivables Other receivables Trade payables Other payables Borrowings
Current Non Current Current Current Current Current
Associates and joint ventures
Citelec - - - - - 14
Greenwind - 4 - 5 - -
OCP - 15 - - 5 -
Refinor 2 - - 1 - -
SACME - - - 2 - -
TGS 4 34 5 - - -
Other related parties
SACDE - - 2 - - -
Other - - 1 - - -
6 53 8 8 5 14

18. LEASES (Tables)

18. LEASES (Tables)12 Months Ended
Dec. 31, 2020
Presentation of leases for lessee [abstract]
Schedule of right of use assetsOriginal
values
Reclasification
to assets clasified as held
Type
of good At
the beginning Increase At
the end
(1)
Machinery
and equipment 13 - - 13
Buildings 7 3 (10) -
Total
at 12.31.2020 20 3 (10) 13
Total
at 12.31.2019 - 20 - 20
Depreciation
Reclasification
to assets clasified as held
Type
of good At
the beginning For
the year At
the end
Machinery
and equipment (2) (1) - (3)
Buildings (2) (4) 6 -
Total
at 12.31.2020 (4) (5) 6 (3)
Total
at 12.31.2019 - (4) - (4)
Net
book values
Type
of good At
the end At
12.31.2019
Machinery and
equipment 10 11
Buildings - 5
Total
at 12.31.2020 10
Total
at 12.31.2019 16 (1)
Schedule of lease liabilities12.31.2020 12.31.2019
At the beginning
of the year 16 -
Incorporation by adoption of IFRS 16 - 8
Increases 4 13
Discounted value
measurement (1) - 3
Payments (10) (5)
Reclasification to liabilities clasified as
held for sales (4) -
Exchange differences on translation 5 (3)
At the end of the
year 11 16 (1)
Schedule of lease liabilities payments by maturityThe
following table includes an analysis of the Company lease liabilities, grouped according to their maturity dates. The amounts
shown in the table are the contractual undiscounted cash flows:
12.31.2020
Three months to one year 1
One to two years 1
Two to three years 2
Three to four years 2
Four to five years 2
More than five years 14
Total 22
Schedule of lease receivables by maturityThe
following table includes an analysis of the Company receivable, grouped according to its maturity dates. The amounts shown in
the table are the contractual undiscounted cash flows:
12.31.2020
Less than three months 1
Three months to one year 4
One to two years 5
Two to three years 6
Three to four years 6
Four to five years 7
More than five years 4
Total 33

20. OIL AND GAS RESERVES (Inf_2

20. OIL AND GAS RESERVES (Information not covered by the auditors' report) (Tables)12 Months Ended
Dec. 31, 2020
Oil And Gas Reserves
Schedule of proved reservesThe
table below presents the estimated proved reserves of oil (including crude oil, condensate and LNG) and natural gas, by geographic
area as of December 31, 2020.
Proved
Developed Proved
Undeveloped Total
Proved Reserves
Oil and LNG (1) Natural
Gas (2) Oil and LNG (1) Natural
Gas (2) Oil and LNG (1) Natural
Gas (2)
Argentina 7,761 10,534 5,765 11,256 13,526 21,790
Total at 12.31.2020 7,761 10,534 5,765 11,256 13,526 21,790 (1)
In thousands of barrels. (2)
In millions of cubic meters.

2. REGULATORY FRAMEWORK (Detail

2. REGULATORY FRAMEWORK (Details)12 Months Ended
Dec. 31, 2020
Generator in operation1 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTG
Generating unitGUEMTG01
TecnologyTG
Power 100 MW
Applicable regimeEnergy Plus Res. No. 1,281/06[1]
Generator in operation 2 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTG
Generating unitGUEMTV11
TecnologyTV
Power≤100 MW
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 3 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTG
Generating unitGUEMTV12
TecnologyTV
Power≤100 MW
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 4 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTG
Generating unitGUEMTV13
TecnologyTV
Power>100 MW 
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 5 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorPiquirenda
Generating unitPIQIDI 01-10
TecnologyMG
Power 30 MW
Applicable regimeSE Resolution No. 220/07[1]
Generator in operation 6 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCPB
Generating unitBBLATV29
TecnologyTV
Power>100 MW
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 7 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCPB
Generating unitBBLATV30
TecnologyTV
Power>100 MW
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 8 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCT Ing. White
Generating unitBBLMD01-06
TecnologyMG
Power100 MW
Applicable regimeSEE Resolution No. 21/16 [1]
Generator in operation 9 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTLL
Generating unitLDLATG01
TecnologyTG
Power>50 MW
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 10 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTLL
Generating unitLDLATG02
TecnologyTG
Power>50 MW
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 11 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTLL
Generating unitLDLATG03
TecnologyTG
Power>50 MW
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 12 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTLL
Generating unitLDLATV01
TecnologyTV
Power180 MW
Applicable regimeSE Resolution No. 220/07 (1)[1]
Generator in operation 13 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTLL
Generating unitLDLATG04
TecnologyTG
Power 105 MW
Applicable regimeSEE Res. 220/07 (75%)[1]
Generator in operation 14 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTLL
Generating unitLDLATG05
TecnologyTG
Power 105 MW
Applicable regimeSEE Resolution No. 21/16[1]
Generator in operation 15 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTGEBA
Generating unitGEBATG01/TG02/TV01
TecnologyCC
Power>150 MW
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 16 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTGEBA
Generating unitGEBATG03
TecnologyTG
Power169 MW
Applicable regimeEnergy Plus Res. No. 1,281/06[1]
Generator in operation 17 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTGEBA
Generating unitGEBATG03/TG04/TV02
TecnologyCC
Power400 MW
Applicable regimeSE Resolutions No. 287/17[1]
Generator in operation 18 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorEcoenergía
Generating unitCERITV01
TecnologyTV
PowerRenewable ≤ 50
Applicable regimeEnergy Plus Res. N° 1,281/06 (1)[1]
Generator in operation 19 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCT Parque Pilar
Generating unitPILBD01-06
TecnologyMG
Power100 MW
Applicable regimeSEE Resolution No. 21/16 (1)[1]
Generator in operation 20 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTB
Generating unitEBARTG01 - TG02
TecnologyTG
PowerHI – Small 50&lt;P≤120
Applicable regimeSE Resolution No. 220/07 (1)[1]
Generator in operation 21 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorHIDISA
Generating unitAGUA DEL TORO
TecnologyHI
PowerHI – Small 50&lt;P≤120
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 22 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorHIDISA
Generating unitEL TIGRE
TecnologyHI
PowerHI – Small 50&lt;P≤120
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 23 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorHIDISA
Generating unitLOS REYUNOS
TecnologyHB
PowerHB – Media 120&lt;P≤300
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 24 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorHINISA
Generating unitNIHUIL I - II - III
TecnologyHI
PowerHI – Chica 50&lt;P≤120
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 25 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorHPPL
Generating unitPPLEHI
TecnologyHI
PowerHI – Media 120&lt;P≤300
Applicable regimeSE Resolutions No. 31/20[1]
Generator in operation 26 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorP.E. M. Cebreiro
Generating unitCORTEO
TecnologyEólica
Power100 MW
Applicable regimeRenovar[1]
Generator in operation 27 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorPEPE II
Generating unitPAMEEO
TecnologyEólica
Power53 MW
Applicable regimeSEE Resolution No. 281/17[1]
Generator in operation 28 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorPEPE III
Generating unitBAHIEO
TecnologyEólica
Power53 MW
Applicable regimeSEE Resolution No. 281/17[1]
Generator in construction 29 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTLL
Generating unitMG
Tecnology15 MW
PowerSE Resolutions No. 31/20
Generator in construction 30 [member]
Disclosure of Regulatory Framework [Line Items]
GeneratorCTB
Generating unitCC
Tecnology280 MW
PowerSE Resolution No. 220/07
[1]Uncommitted power and energy under the sales contracts are remunerated according to Resolution No. 31/20.

2. REGULATORY FRAMEWORK (Deta_2

2. REGULATORY FRAMEWORK (Details 1)12 Months Ended
Dec. 31, 2020
Minimum remuneration to thermal generators [member]
Disclosure of Regulatory Framework [Line Items]
Technology / ScaleLarge CC Capacity > 150 MW
SEE No. 19/17 ($ / MW-hmrt)3,050
SRRYME No. 1/19 (US$ / MW-month)3,050
SE No. 31/20 (AR$ / MW-month)100,650
Minimum remuneration to thermal generators 2 [member[
Disclosure of Regulatory Framework [Line Items]
Technology / ScaleLarge ST Capacity > 100 MW
SEE No. 19/17 ($ / MW-hmrt)4,350
SRRYME No. 1/19 (US$ / MW-month)4,350
SE No. 31/20 (AR$ / MW-month)143,550
Minimum remuneration to thermal generators 3 [member[
Disclosure of Regulatory Framework [Line Items]
Technology / ScaleSmall ST Capacity > 100 MW
SEE No. 19/17 ($ / MW-hmrt)5,700
SRRYME No. 1/19 (US$ / MW-month)5,200
SE No. 31/20 (AR$ / MW-month)171,600
Minimum remuneration to thermal generators 4 [member[
Disclosure of Regulatory Framework [Line Items]
Technology / ScaleLarge GT Capacity > 50 MW
SEE No. 19/17 ($ / MW-hmrt)3,550
SRRYME No. 1/19 (US$ / MW-month)3,550
SE No. 31/20 (AR$ / MW-month)117,150

2. REGULATORY FRAMEWORK (Deta_3

2. REGULATORY FRAMEWORK (Details 2)12 Months Ended
Dec. 31, 2020
Remuneration for guaranteed power capacity to thermal generators 1 [member]
Disclosure of Regulatory Framework [Line Items]
PeriodSummer - Winter
SEE No. 19/17 ($ / MW-hmrt)7,000
SRRYME No. 1/19 (US$ / MW-month)7,000
SE No. 31/20 (AR$ / MW-month)360,000
Remuneration for guaranteed power capacity to thermal generators 2 [member]
Disclosure of Regulatory Framework [Line Items]
PeriodFall - Spring
SEE No. 19/17 ($ / MW-hmrt)7,000
SRRYME No. 1/19 (US$ / MW-month)5,500
SE No. 31/20 (AR$ / MW-month)270,000

2. REGULATORY FRAMEWORK (Deta_4

2. REGULATORY FRAMEWORK (Details 3)12 Months Ended
Dec. 31, 2020
Additional remuneration to thermal generators [member]
Disclosure of Regulatory Framework [Line Items]
PeriodSummer - Winter
Remuneration for first 25 hours ($ / MW-hmrt)45,000
Remuneration for second 25 hours ($ / MW-hmrt)22,500
Additional remuneration to thermal generators 2 [member]
Disclosure of Regulatory Framework [Line Items]
PeriodFall - Spring
Remuneration for first 25 hours ($ / MW-hmrt)7,500

2. REGULATORY FRAMEWORK (Deta_5

2. REGULATORY FRAMEWORK (Details 4)12 Months Ended
Dec. 31, 2020USD ($)
Base and additional remuneration to hydroelectric generators 1 [member]
Disclosure of Regulatory Framework [Line Items]
Technology / ScaleMedium HI Capacity > 120 ≤ 300 MW
Base remuneration (US$ / MW-month)3,000
Additional remuneration (US$ / MW-month) $ 1,000
Base and additional remuneration to hydroelectric generators 2 [member]
Disclosure of Regulatory Framework [Line Items]
Technology / ScaleSmall HI Capacity > 50 ≤ 120 MW
Base remuneration (US$ / MW-month)4,500
Additional remuneration (US$ / MW-month) $ 1,000
Base and additional remuneration to hydroelectric generators 3 [member]
Disclosure of Regulatory Framework [Line Items]
Technology / ScaleMedium Pumped HI Capacity > 120 ≤ 300 MW
Base remuneration (US$ / MW-month)2,000
Additional remuneration (US$ / MW-month) $ 500
Base and additional remuneration to hydroelectric generators 4 [member]
Disclosure of Regulatory Framework [Line Items]
Technology / ScaleRenewable HI Capacity ≤ 50 MW
Base remuneration (US$ / MW-month)8,000
Additional remuneration (US$ / MW-month) $ 1,000

2. REGULATORY FRAMEWORK (Deta_6

2. REGULATORY FRAMEWORK (Details 5)12 Months Ended
Dec. 31, 2020
Se3120 remuneration to hydroelectric generators 1 [member]
Disclosure of Regulatory Framework [Line Items]
Technology and scaleMedium Pumped HI Capacity > 120 ≤ 300 MW
Remuneration Under Se No 3120132,000
Se3120 remuneration to hydroelectric generators 2 [member]
Disclosure of Regulatory Framework [Line Items]
Technology and scaleRenewable HI Capacity ≤ 50 MW
Remuneration Under Se No 3120297,000
SE3120 additional remuneration to hydroelectric generators [member]
Disclosure of Regulatory Framework [Line Items]
Technology and scaleMedium HI Capacity > 120 ≤ 300 MW
Remuneration Under Se No 3120132,000
SE3120 additional remuneration to hydroelectric generators [member]
Disclosure of Regulatory Framework [Line Items]
Technology and scaleSmall HI Capacity > 50 ≤ 120 MW
Remuneration Under Se No 3120181,500

2. REGULATORY FRAMEWORK (Deta_7

2. REGULATORY FRAMEWORK (Details 6) - SE3120 additional remuneration to hydroelectric generators [member]12 Months Ended
Dec. 31, 2020
Disclosure of Regulatory Framework [Line Items]
PeriodSummer - Winter
Remuneration for first 25 hours39,000
Remuneration for second 25 hours19,500
PeriodFall - Spring
Remuneration for first 25 hours6,500

4. ACCOUNTING POLICIES (Details

4. ACCOUNTING POLICIES (Details)12 Months Ended
Dec. 31, 2020
Buildings [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Property, plant and equipment estimated useful lives50 years
Vehicles [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Property, plant and equipment estimated useful lives5 years
Computer equipment and software [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Property, plant and equipment estimated useful lives3 years
Tools [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Property, plant and equipment estimated useful lives10 years
Gas Plant and Pipeline [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Property, plant and equipment estimated useful lives20 years
Furniture and fixtures and software equipment [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Property, plant and equipment estimated useful lives5- 20 years

4. ACCOUNTING POLICIES (Detai_2

4. ACCOUNTING POLICIES (Details Narrative)12 Months Ended
Dec. 31, 2020Dec. 31, 2019Dec. 31, 2018
DisclosureOfAccountingPoliciesLineItems [Line Items]
Income tax rate30.00%30.00%30.00%
ARGENTINA [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Income tax rate30.00%
VENEZUELA [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Income tax rate50.00%
ECUADOR [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Income tax rate25.00%
Surcharge rate3.00%
BOLIVIA [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Income tax rate25.00%
Withholding income tax rate12.50%
Percentage of withholdings on dividends10.00%
URUGUAY [member]
DisclosureOfAccountingPoliciesLineItems [Line Items]
Income tax rate25.00%

5. GROUP STRUCTURE (Details)

5. GROUP STRUCTURE (Details) $ in Millions12 Months Ended
Dec. 31, 2018USD ($)
Refining and distribution [member]
Disclosure of group structure [Line Items]
Sale price $ 28 [1]
Book value of assets sold and costs associated with the transaction(28)
Result for sale0
PELSA [member]
Disclosure of group structure [Line Items]
Sale price270 [1]
Book value of assets sold and costs associated with the transaction(226)
Result for sale44
Interests4 [2]
Income tax(22)
Imputed in results26
Other comprehensive income (loss)
Reclasification exchange differences on translation6
Income tax(2)
Imputed in Other comprehensive income4
Total comprehensive income $ 30
[1]Sale price recorded as of December 31, 2018 arises from the financial statements denominated in pesos in accordance with IAS 29, and was translated into U.S. Dollars using the exchange rate as of that date.
[2]Are exposed in "Financial income" in the consolidated statement of comprehensive income related to discontinued operations.

5. GROUP STRUCTURE (Details 1)

5. GROUP STRUCTURE (Details 1) - USD ($) $ in Millions12 Months Ended
Dec. 31, 2020Dec. 31, 2019Dec. 31, 2018
Disclosure of group structure [Line Items]
Revenue $ 1,071 $ 1,338 $ 1,436
Cost of sales(663)(811)(831)
Gross profit408 527 605
Selling expenses(38)(26)(37)
Administrative expenses(93)(105)(130)
Exploration expenses (9)(1)
Other operating income56 79 223
Other operating expenses(36)(43)(156)
Operating income (loss)243 462 618
Gain on monetary position, net 403
Finance income9 23 30
Finance costs(177)(187)(184)
Other financial results84 175 (808)
Financial results, net(84)11 (559)
(loss) Income before income tax159 473 59
Income tax(35)130 32
(Loss) Profit of the year from discontinued operations(592)197 196
Items that will not be reclassified to profit or loss
Income tax 1
Items that may be reclassified to profit or loss
Total comprehensive (loss) income of the year from discontinued operations(508)765 292
Total (loss) income of the year from discontinued operations attributable to:
Discontinued operations(499)98 139
Total comprehensive (loss) income of the year from discontinued operations attributable to:
Discontinued operations(517)84 145
Distribution of energy discontinued operations [member]
Disclosure of group structure [Line Items]
Revenue1,085 1,502 1,484
Cost of sales(926)(1,225)(1,136)
Gross profit159 277 348
Selling expenses(129)(122)(134)
Administrative expenses(64)(65)(76)
Other operating income29 19 16
Other operating expenses(25)(43)(44)
Impairment of property, plant and equipment and intangible assets(589)
Result from the sale of share of profit and property, plant and equipment
Agreement on the regularization of obligations285
Operating income (loss)(619)351 110
Gain on monetary position, net115 187 226
Finance income1 11 11
Finance costs(110)(112)(132)
Other financial results(20)(62)(50)
Financial results, net(14)24 55
(loss) Income before income tax(633)375 165
Income tax41 (178)(49)
(Loss) Profit of the year from discontinued operations(592)197 116
Items that will not be reclassified to profit or loss
Results related to defined benefit plans1
Income tax
Exchange differences on translation(15)(15)
Items that may be reclassified to profit or loss
Exchange differences on translation(19)(13)
Other comprehensive (loss) income of the year from discontinued operations(33)(28)
Total comprehensive (loss) income of the year from discontinued operations(625)169 116
Total (loss) income of the year from discontinued operations attributable to:
Owners of the company(499)98 61
Non - controlling interest(93)99 55
Discontinued operations(592)197 116
Total comprehensive (loss) income of the year from discontinued operations attributable to:
Owners of the company(517)84 61
Non - controlling interest(108)85 55
Discontinued operations $ (625) $ 169 116
Oil and gas discontinued operations [member]
Disclosure of group structure [Line Items]
Revenue66
Cost of sales(33)
Gross profit33
Selling expenses(2)
Administrative expenses(1)
Other operating income1
Other operating expenses(6)
Result from the sale of share of profit and property, plant and equipment44
Operating income (loss)69
Gain on monetary position, net7
Finance income4
Finance costs(1)
Other financial results(4)
Financial results, net6
(loss) Income before income tax75
Income tax(26)
(Loss) Profit of the year from discontinued operations49
Items that will not be reclassified to profit or loss
Income tax(2)
Exchange differences on translation4
Items that may be reclassified to profit or loss
Exchange differences on translation6
Other comprehensive (loss) income of the year from discontinued operations8
Total comprehensive (loss) income of the year from discontinued operations57
Total (loss) income of the year from discontinued operations attributable to:
Owners of the company47
Non - controlling interest2
Discontinued operations49
Total comprehensive (loss) income of the year from discontinued operations attributable to:
Owners of the company53
Non - controlling interest4
Discontinued operations57
Refining and distribution [member]
Disclosure of group structure [Line Items]
Revenue422
Cost of sales(361)
Gross profit61
Selling expenses(33)
Administrative expenses(4)
Other operating income6
Other operating expenses(10)
Impairment of property, plant and equipment and intangible assets
Result from the sale of share of profit and property, plant and equipment
Agreement on the regularization of obligations
Operating income (loss)20
Gain on monetary position, net2
Finance income1
Finance costs
Other financial results22
Financial results, net25
(loss) Income before income tax45
Income tax(14)
(Loss) Profit of the year from discontinued operations31
Items that will not be reclassified to profit or loss
Results related to defined benefit plans
Income tax
Items that may be reclassified to profit or loss
Exchange differences on translation
Other comprehensive (loss) income of the year from discontinued operations
Total comprehensive (loss) income of the year from discontinued operations31
Total (loss) income of the year from discontinued operations attributable to:
Owners of the company31
Non - controlling interest
Discontinued operations31
Total comprehensive (loss) income of the year from discontinued operations attributable to:
Owners of the company31
Non - controlling interest
Discontinued operations31
Eliminations discontinued operations [member]
Disclosure of group structure [Line Items]
Revenue(90)
Cost of sales91
Gross profit1
Selling expenses
Administrative expenses
Other operating income
Other operating expenses
Impairment of property, plant and equipment and intangible assets
Result from the sale of share of profit and property, plant and equipment
Agreement on the regularization of obligations
Operating income (loss)1
Gain on monetary position, net(1)
Finance income
Finance costs
Other financial results
Financial results, net(1)
(loss) Income before income tax
Income tax
(Loss) Profit of the year from discontinued operations
Items that will not be reclassified to profit or loss
Results related to defined benefit plans
Income tax
Items that may be reclassified to profit or loss
Exchange differences on translation
Other comprehensive (loss) income of the year from discontinued operations
Total comprehensive (loss) income of the year from discontinued operations
Total (loss) income of the year from discontinued operations attributable to:
Owners of the company
Non - controlling interest
Discontinued operations
Total comprehensive (loss) income of the year from discontinued operations attributable to:
Owners of the company
Non - controlling interest
Discontinued operations
Discontinued operations total [member]
Disclosure of group structure [Line Items]
Revenue1,882
Cost of sales(1,439)
Gross profit443
Selling expenses(169)
Administrative expenses(81)
Other operating income23
Other operating expenses(60)
Impairment of property, plant and equipment and intangible assets
Result from the sale of share of profit and property, plant and equipment44
Agreement on the regularization of obligations
Operating income (loss)200
Gain on monetary position, net234
Finance income16
Finance costs(133)
Other financial results(32)
Financial results, net85
(loss) Income before income tax285
Income tax(89)
(Loss) Profit of the year from discontinued operations196
Items that will not be reclassified to profit or loss
Results related to defined benefit plans
Income tax(2)
Exchange differences on translation4
Items that may be reclassified to profit or loss
Exchange differences on translation6
Other comprehensive (loss) income of the year from discontinued operations8
Total comprehensive (loss) income of the year from discontinued operations204
Total (loss) income of the year from discontinued operations attributable to:
Owners of the company139
Non - controlling interest57
Discontinued operations196
Total comprehensive (loss) income of the year from discontinued operations attributable to:
Owners of the company145
Non - controlling interest59
Discontinued operations $ 204

5. GROUP STRUCTURE (Details 2)

5. GROUP STRUCTURE (Details 2) $ in MillionsDec. 31, 2020USD ($)
Disclosure of group structure [Line Items]
Assets classified as held for sale $ 1,469
Liabilities associated to assets classified as held for sale1,021
Non-current assets held for sale [member] | Property, plant and equipment [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale1,185
Non-current assets held for sale [member] | Right-of-use assets [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale3
Non-current assets held for sale [member] | Financial assets at amortized cost [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale3
Non-current assets held for sale [member] | Trade and other receivables [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale1
Non-current assets held for sale [member] | Total non-current assets [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale1,192
Current assets held for sale [member] | Financial assets at amortized cost [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale1
Current assets held for sale [member] | Trade and other receivables [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale176
Current assets held for sale [member] | Inventories [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale22
Current assets held for sale [member] | Financial assets at fair value through profit and loss [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale26
Current assets held for sale [member] | Cash and cash equivalents [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale52
Current assets held for sale [member] | Total current assets [member]
Disclosure of group structure [Line Items]
Assets classified as held for sale277
Non-current liabilities held for sale [member] | Provisions [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale29
Non-current liabilities held for sale [member] | Deferred revenue [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale17
Non-current liabilities held for sale [member] | Deferred tax liabilities [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale282
Non-current liabilities held for sale [member] | Defined benefit plans [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale9
Non-current liabilities held for sale [member] | Salaries and social security payable [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale4
Non-current liabilities held for sale [member] | Borrowings [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale98
Non-current liabilities held for sale [member] | Trade and other payables [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale81
Non-current liabilities held for sale [member] | Total non-current liabilities [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale520
Current liabilities held for sale [member] | Provisions [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale4
Current liabilities held for sale [member] | Defined benefit plans [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale1
Current liabilities held for sale [member] | Salaries and social security payable [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale44
Current liabilities held for sale [member] | Borrowings [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale2
Current liabilities held for sale [member] | Trade and other payables [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale429
Current liabilities held for sale [member] | Taxes payables [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale21
Current liabilities held for sale [member] | Total current liabilities [member]
Disclosure of group structure [Line Items]
Liabilities associated to assets classified as held for sale $ 501

5. GROUP STRUCTURE (Details 3)

5. GROUP STRUCTURE (Details 3) - USD ($) $ in Millions12 Months Ended
Dec. 31, 2020Dec. 31, 2019Dec. 31, 2018
Group Structure
Net cash generated by operating activities $ 211 $ 170 $ 224
Net cash used in investing activities(86)(86)(221)
Net cash used in financing activities(73)(85)(13)
Increase (decrease) in cash and cash equivalents from discontinued operations52 (1)(10)
Cash and cash equivalents at the begining of the year9 1 10
Effect of devaluation and inflation on cash and cash equivalents(8)9 1
Increase (decrease) in cash and cash equivalents52 (1)(10)
Cash and cash equivalents at the end of the year $ 53 $ 9 $ 1

5. GROUP STRUCTURE (Details 4)

5. GROUP STRUCTURE (Details 4)12 Months Ended
Dec. 31, 2020Dec. 31, 2019
Trenerec Energia Bolivia S.A. [member]
Disclosure of group structure [Line Items]
Subsidiary name[1]Trenerec Energia Bolivia S.A.Trenerec Energia Bolivia S.A.
Country[1]BoliviaBolivia
Main activity[1]InvestmentInvestment
Direct and indirect participation[1]0.00%100.00%
Transelec Argentina S.A [member]
Disclosure of group structure [Line Items]
Subsidiary name[2]TranselecTranselec
Country[2]ArgentinaArgentina
Main activity[2]InvestmentInvestment
Direct and indirect participation[2]0.00%100.00%
Pampa Participaciones S.A.U. [member]
Disclosure of group structure [Line Items]
Subsidiary name[2]PPPP
Country[2]ArgentinaArgentina
Main activity[2]InvestmentInvestment
Direct and indirect participation[2]0.00%100.00%
PHA S.A.U [member]
Disclosure of group structure [Line Items]
Subsidiary name[2]PHAPHA
Country[2]ArgentinaArgentina
Main activity[2]InvestmentInvestment
Direct and indirect participation[2]0.00%100.00%
PACOGEN [member]
Disclosure of group structure [Line Items]
Subsidiary name[2]PACOGENPACOGEN
Country[2]ArgentinaArgentina
Main activity[2]InvestmentInvestment
Direct and indirect participation[2]0.00%100.00%
Edenor [member]
Disclosure of group structure [Line Items]
Subsidiary name[3]EdenorEdenor
Country[3]ArgentinaArgentina
Main activity[3]Distribution of energyDistribution of energy
Direct and indirect participation[3]57.12%56.32%
Corod Produccion S.A. [member]
Disclosure of group structure [Line Items]
Subsidiary nameCorodCorod
CountryVenezuelaVenezuela
Main activityOilOil
Direct and indirect participation100.00%100.00%