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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 20-F





ANNUAL REPORT

PURSUANT
TO SECTION 13

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2015

Commission file number 333-155319





PETROBRAS
ARGENTINA S.A.

(Exact name of Registrant as specified in its charter)





N/A

(Translation of
Registrants name into English)

REPUBLIC OF ARGENTINA

(Jurisdiction of incorporation or organization)

Maipú 1, 22 S.S. Floor

(C1084ABA) Ciudad Autónoma de Buenos Aires

República Argentina

(Address of principal executive offices)

Maelcio Mauricio Soares

Maipú 1, 22th Floor

(C1084ABA) Ciudad Autónoma de Buenos Aires

República Argentina

Tel: 54-11-4344-6694

Fax: 54-11-4344-6398

E-mail: maelcio.soares@petrobras.com

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:



|                                                                                            |  |                                          
|------------------------------------------------------------------------------------------- |  | -----------------------------------------
|Title of each Class                                                                         |  | Name of each Exchange
on which Registered
|American Depositary Shares, each representing 10 Class B shares of Petrobras Argentina S.A. |  | New York Stock Exchange                  
|                                                                                            | 
|Class B shares of Petrobras Argentina S.A.                                                  |  | New York Stock Exchange*                 



|* | Not for trading, but only in connection with the registration of American Depositary Shares pursuant to the requirements of the New York Stock Exchange.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

The number of outstanding shares of each of the issuers classes of capital or common stock as of December 31, 2015 was:

Petrobras Argentina S.A. Class B ordinary shares, nominal value Ps.1.00 per share 2,019,236,820





Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes   ̈            No 
 x

If this report is an annual or transitional report, indicate by check mark if the registrant is
not required to file reports pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes   ̈            No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days:

Yes  x            No 
  ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its Web
site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit and post such files).

Not applicable.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definitions of
accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large
accelerated filer   ̈             Accelerated filer  
x             Non-Accelerated filer   ̈

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP   ̈            
IFRS  x            Other   ̈

If Other has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected
to follow:

Item 17   ̈           
 Item 18   ̈

If this is an Annual Report, indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes   ̈            
No  x









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TABLE OF CONTENTS



|                                                                       |  |      |     | 
|---------------------------------------------------------------------- |  | ---- | --- | 
|                                                                       |  | Page |    
|                                                                       | 
|Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISORS          |  |      | 2   | 
|Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE                        |  |      | 2   | 
|Item 3. KEY INFORMATION                                                |  |      | 2   | 
|SELECTED FINANCIAL DATA                                                |  |      | 2   | 
|EXCHANGE RATES                                                         |  |      | 6   | 
|EXCHANGE CONTROLS                                                      |  |      | 7   | 
|RISK FACTORS                                                           |  |      | 8   | 
|Item 4. INFORMATION ON THE COMPANY                                     |  |      | 21  | 
|HISTORY AND DEVELOPMENT                                                |  |      | 21  | 
|BUSINESS OVERVIEW                                                      |  |      | 22  | 
|OIL AND GAS EXPLORATION AND PRODUCTION                                 |  |      | 25  | 
|REFINING AND DISTRIBUTION                                              |  |      | 41  | 
|PETROCHEMICALS                                                         |  |      | 45  | 
|GAS AND ENERGY                                                         |  |      | 47  | 
|INSURANCE                                                              |  |      | 54  | 
|PATENTS AND TRADEMARKS                                                 |  |      | 54  | 
|QUALITY, SAFETY, ENVIRONMENT AND HEALTH                                |  |      | 55  | 
|REGULATION OF OUR BUSINESS                                             |  |      | 58  | 
|ORGANIZATIONAL STRUCTURE                                               |  |      | 83  | 
|PROPERTY, PLANT AND EQUIPMENT                                          |  |      | 84  | 
|Item 4A. UNRESOLVED STAFF COMMENTS                                     |  |      | 84  | 
|Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS                   |  |      | 84  | 
|ANALYSIS OF CONSOLIDATED RESULTS OF OPERATIONS                         |  |      | 85  | 
|OVERVIEW                                                               |  |      | 85  | 
|FACTORS AFFECTING OUR CONSOLIDATED RESULTS OF OPERATIONS               |  |      | 86  | 
|DISCUSSION OF RESULTS                                                  |  |      | 96  | 
|YEAR ENDED DECEMBER 31, 2015 COMPARED TO YEAR ENDED DECEMBER 
31, 2014 |  |      | 98  | 
|ANALYSIS OF OPERATING INCOME BY BUSINESS SEGMENT                       |  |      | 99  | 
|ANALYSIS OF SHARE OF NET LOSS OF EQUITY ACCOUNTED INVESTMENTS          |  |      | 103 | 
|YEAR ENDED DECEMBER 31, 2014 COMPARED TO YEAR ENDED DECEMBER 
31, 2013 |  |      | 104 | 
|ANALYSIS OF OPERATING INCOME BY BUSINESS SEGMENT                       |  |      | 105 | 
|ANALYSIS OF SHARE OF NET LOSS OF EQUITY ACCOUNTED INVESTMENTS          |  |      | 109 | 
|CRITICAL ACCOUNTING POLICIES                                           |  |      | 110 | 
|LIQUIDITY AND CAPITAL RESOURCES                                        |  |      | 113 | 
|DESCRIPTION OF INDEBTEDNESS                                            |  |      | 117 | 
|FUTURE CAPITAL REQUIREMENTS                                            |  |      | 120 | 
|OFF-BALANCE SHEET TRANSACTIONS                                         |  |      | 121 | 
|CONTRACTUAL OBLIGATIONS                                                |  |      | 121 | 
|Item 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                     |  |      | 123 | 
|DIRECTORS AND SENIOR MANAGEMENT                                        |  |      | 123 | 
|COMPENSATION                                                           |  |      | 127 | 



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|                                                                                       |  |  |     | 
|-------------------------------------------------------------------------------------- |  |  | --- | 
|BOARD PRACTICES                                                                        |  |  | 128 | 
|EMPLOYEES                                                                              |  |  | 130 | 
|SHARE OWNERSHIP                                                                        |  |  | 131 | 
|Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                              |  |  | 131 | 
|MAJOR SHAREHOLDERS                                                                     |  |  | 131 | 
|RELATED PARTY TRANSACTIONS                                                             |  |  | 132 | 
|Item 8. FINANCIAL INFORMATION                                                          |  |  | 135 | 
|CONSOLIDATED FINANCIAL STATEMENTS                                                      |  |  | 135 | 
|LEGAL PROCEEDINGS                                                                      |  |  | 135 | 
|DIVIDENDS                                                                              |  |  | 135 | 
|Item 9. OFFER AND LISTING                                                              |  |  | 135 | 
|MARKETS                                                                                |  |  | 136 | 
|Item 10. ADDITIONAL INFORMATION                                                        |  |  | 138 | 
|MEMORANDUM AND ARTICLES OF ASSOCIATION                                                 |  |  | 138 | 
|MATERIAL CONTRACTS                                                                     |  |  | 143 | 
|EXCHANGE CONTROLS                                                                      |  |  | 143 | 
|TAXATION                                                                               |  |  | 143 | 
|DOCUMENTS ON DISPLAY                                                                   |  |  | 147 | 
|Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK                    |  |  | 147 | 
|Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY
SECURITIES                        |  |  | 147 | 
|Item 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                               |  |  | 149 | 
|Item 
14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |  |  | 149 | 
|Item 15. CONTROLS AND PROCEDURES                                                       |  |  | 149 | 
|Item 16A. AUDIT COMMITTEE FINANCIAL EXPERT                                             |  |  | 149 | 
|Item 16B. CODE OF ETHICS                                                               |  |  | 150 | 
|Item 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |  |  | 150 | 
|Item 16D. EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES                    |  |  | 150 | 
|Item 
16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS      |  |  | 151 | 
|Item 16F. CHANGE IN REGISTRANTS CERTIFYING
ACCOUNTANT                                 |  |  | 151 | 
|Item 16G. CORPORATE GOVERNANCE                                                         |  |  | 151 | 
|Item 16H. MINE SAFETY DISCLOSURE                                                       |  |  | 156 | 
|Item 17. FINANCIAL STATEMENTS                                                          |  |  | 156 | 
|Item 18. FINANCIAL STATEMENTS                                                          |  |  | 156 | 
|Item 19. EXHIBITS                                                                      |  |  | 156 | 



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REFERENCES

This annual report on Form 20-F (this Annual Report) has been filed by Petrobras Argentina S.A. (PESA) (formerly
Petrobras Energía S.A.).

All references in this Annual Report to:

Petrobras Argentina, Petrobras Energía, PESA, the Company, we,
us, our, and similar terms, refer to Petrobras Argentina S.A. and its subsidiaries, but exclude associates and joint ventures. See Item 4. Information on the CompanyHistory and Development.

Petrobras Energía Participaciones and PEPSA refer to Petrobras Energía Participaciones S.A. Prior to
July 2003, the corporate name of PEPSA was Pérez Companc S.A.

Petrobras refers to Petróleo Brasileiro S.A
 PETROBRAS.

Argentine pesos, pesos and Ps. refer to the currency of the Republic of Argentina.

U.S. dollars and U.S.$ refer to the currency of the United States of America.

Argentina refers to the Republic of Argentina, and Argentine government refers to the federal government of Argentina.

Tons refers to metric tons.

FORWARD LOOKING STATEMENTS

Some of the information included in this Annual Report contains information that is forward-looking, including statements regarding capital
expenditures, competition and sales, oil and gas reserves and prospects, and trends in the oil and gas, refining, distribution, petrochemicals and electricity industries.

Certain statements contained in this Annual Report are forward-looking statements and are not based on historical facts, such as statements
containing the words believe, may, will, estimate, continue, anticipate, intend, expect and similar words. These forward-looking statements are subject
to risks, uncertainties and assumptions, including those discussed in Item 3. Key InformationRisk Factors and elsewhere in this Annual Report. Factors that could cause actual results to differ materially and adversely include, but
are not limited to:



| |  |  | Changes in general economic, business, political or other conditions in Argentina or changes in general economic or business conditions in other Latin American countries;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The availability of financing at reasonable terms to Argentine companies, such as us;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | The failure of governmental authorities to approve proposed measures or transactions described in this Annual Report;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | The volume of crude oil, oil products and natural gas we produce and sell;
| | - |  | --------------------------------------------------------------------------



| |  |  | Changes in the price of hydrocarbons and oil products;
| | - |  | ------------------------------------------------------



| |  |  | Changes to our capital expenditure plans;
| | - |  | -----------------------------------------



| |  |  | Changes in domestic and international laws, regulations or policies affecting our operations, including with respect to tax and environmental matters;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Fluctuations in the Argentine peso/U.S. dollar exchange rate;
| | - |  | -------------------------------------------------------------



| |  |  | Our ability to renew certain concessions;
| | - |  | -----------------------------------------



| |  |  | The ability to develop and monetize conventional and non-conventional reserves;
| | - |  | -------------------------------------------------------------------------------



| |  |  | Changes to our reserves estimates;
| | - |  | ----------------------------------



| |  |  | Increased costs; and
| | - |  | --------------------



| |  |  | Other factors discussed under Risk Factors in Item 3 of this Annual Report.
| | - |  | -----------------------------------------------------------------------------

Forward-looking statements speak only as of the date they were made. We undertake no obligation to update any forward-looking statement or
statements to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of these factors. In
light of these limitations, you should not place undue reliance on forward-looking statements contained in this Annual Report.



1



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PART I



|Item 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
|------- | -----------------------------------------------------

Not applicable.



|Item 2. | OFFER STATISTICS AND EXPECTED TIMETABLE
|------- | ---------------------------------------

Not applicable.



|Item 3. | KEY INFORMATION
|------- | ---------------

SELECTED FINANCIAL DATA

The financial information set forth below may not contain all of the financial information that you should consider when making an investment
decision. This information should be read in conjunction with, and is qualified in its entirety by reference to, the Risk Factors included in this Annual Report. See Risk Factors. You should also carefully read our
audited consolidated financial statements and Item 5. Operating and Financial Review and Prospects included in this Annual Report for additional financial information about us.

Our audited consolidated financial statements included in this Annual Report (Audited Consolidated Financial Statements) are
prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Presentation of Financial Information in accordance with IFRS

Since January 1, 2012, in compliance with adopted accounting standards applicable to public companies in Argentina and regulations
introduced by the Comisión Nacional de Valores (the Argentine Securities Commission, or CNV), PESA is required to prepare its statutory financial statements in accordance with IFRS as issued by the IASB.

Consistent with Item 18 of Form 20-F, we continue to provide the disclosure required under Accounting Standards Codification
(ASC) 932 of the Financial Accounting Standards Board (the FASB) relating to extractive activitiesOil and Gas (formerly, FASB Statement of Financial Accounting Standards No. 69Disclosures about Oil and Gas
Producing Activities) (ASC Topic 932), as is required regardless of the basis of accounting on which we prepare our financial statements.

Consideration of the effects of inflation

According to inflation data published by the Instituto Nacional de Estadística y Censos (the Argentine national statistics
and census institute, or the INDEC), from 2011 to 2014, the Argentine consumer price index (CPI) increased 9.5%, 10.8% , 10.9% and 24.0% in each of those years, respectively, and 11.9% in the ten-month period ended
October 31, 2015. The wholesale price index (WPI) increased 12.7%, 13.1%, 14.8% and 28.3% in each of those years, respectively, and 10.6% in the ten-month period ended October 31, 2015. In November 2015, the INDEC suspended the
publication of the CPI and the WPI. From 2007 through 2015, the INDEC experienced a process of institutional and methodological reforms that gave rise to controversy with respect to the reliability of the information that it produces, including
inflation, gross domestic product (GDP) and unemployment data. Reports published by the International Monetary Fund (the IMF) stated that their staff used alternative measures of inflation for macroeconomic surveillance,
including data produced by private sources, which have shown inflation rates considerably higher than those published by the INDEC since 2007. The IMF also censured Argentina in 2013 for failing to make sufficient progress in adopting remedial
measures to address the quality of official data, including inflation and GDP data. On February 13, 2014, the INDEC released a new inflation index, known as the Natural Urban Consumer Price Index (the IPCNu) which measures prices on
goods across the country and replaced the previous index that only measured inflation in the urban sprawl of the City of Buenos Aires. Even though the IPCNu brought inflation statistics closer to those estimated by private sources, differences
between official inflation data and private estimates remained at the end of 2015. Since the first weeks after assuming office on December 10, 2015, the new administration has introduced economic and policy reforms. See Risk
FactorsFactors Relating to ArgentinaThe impact of the recent congressional and presidential elections on the future economic and political environment of Argentina is uncertain.



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In January 2016, the administration which assumed office on December 10, 2015 (the new
administration), through Decree No. 55/2016, declared a state of administrative emergency of the national statistics system until December 31, 2016, and the new INDEC authorities announced the discontinuation of the methodology
previously used to measure inflation and suspended the publication of all indices until the INDEC is in a position to calculate such indices based on adequate and reliable official data. The INDEC has suggested using CPI figures published by the
Province of San Luis and the City of Buenos Aires for reference in the meantime. According to the Province of San Luis reports, the inflation rate was 2.9%, 6.5%, 4.2%, 2.7% and 3.0%, in November 2015, December 2015, January
2016, February 2016 and March 2016, respectively. According to the City of Buenos Aires reports, the inflation rate was 2.0%, 3.9%, 4.1%, 4.0% and 3.3%, in November 2015, December 2015, January 2016, February 2016 and March
2016, respectively. See Risk FactorsFactors Relating to ArgentinaEconomic and political instability in Argentina has affected and may continue to adversely affect our financial condition and results of operations.

In accordance with IFRS, the financial information set forth in this Annual Report has not been adjusted to reflect inflation. Inflation could
therefore affect the comparability among the different periods presented herein.

The following tables set forth selected consolidated
financial data of the Company presented in Argentine pesos and prepared in accordance with IFRS as issued by the IASB, as of and for each of the years ended December 31, 2015, 2014, 2013, 2012 and 2011.

The selected consolidated financial data as of and for the years ended December 31, 2015, 2014 and 2013, has been derived from our
Audited Consolidated Financial Statements, which were audited by Price Waterhouse & Co. S.R.L., an independent registered public accounting firm in Buenos Aires, Argentina, member firm of PricewaterhouseCoopers International Limited network
(PwC), and are included elsewhere herein. The selected consolidated financial data as of and for the years ended December 31, 2012 and 2011 has been derived from our audited financial statements, which were audited by PwC and KPMG,
respectively, and are not included herein.

The financial data as of and for the years ended December 31, 2012 and 2011 was modified
at the time we issued our Audited Consolidated Financial Statements as of and for the year ended December 31, 2013 to retrospectively apply the change in accounting for employee benefit plans reflected in IAS 19 Employee Benefits as issued
by the IASB.

Petrobras Argentina S.A.Consolidated Statement of Income and Comprehensive Income



|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|---------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | - |  | ---- | ------ | - |  |  | ------ | -
|                                                                       |  | Year Ended December 31,                                                                             |        
|                                                                       |  | 2015                                                                                                |         |   | 2014 |  |         | 2013 |  |  | 2012    |   |  | 2011 |       
|                                                                       |  | (in millions of pesos, except for per share amounts and number of
shares or as otherwise indicated) |        
|Sales                                                                  |  |                                                                                                     | 21,955  |   |      |  | 20,738  |      |  |  | 15,340  |   |  |      | 12,765 |   |  |  | 11,104 |  
|Cost of sales                                                          |  |                                                                                                     | (15,554 | ) |      |  | (14,490 | )    |  |  | (11,260 | ) |  |      | (9,619 | ) |  |  | (8,462 | )
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Gross profit                                                           |  |                                                                                                     | 6,401   |   |      |  | 6,248   |      |  |  | 4,080   |   |  |      | 3,146  |   |  |  | 2,642  |  
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Administrative and selling expenses                                    |  |                                                                                                     | (2,921  | ) |      |  | (2,416  | )    |  |  | (1,797  | ) |  |      | (1,430 | ) |  |  | (1,222 | )
|Exploration expenses                                                   |  |                                                                                                     | (148    | ) |      |  | (70     | )    |  |  | (82     | ) |  |      | (212   | ) |  |  | (391   | )
|Other operating expenses, net                                          |  |                                                                                                     | (123    | ) |      |  | (779    | )    |  |  | (571    | ) |  |      | (121   | ) |  |  | (831   | )
|Share of net loss of equity accounted investments                      |  |                                                                                                     | (1,290  | ) |      |  | (1,735  | )    |  |  | (279    | ) |  |      | (148   | ) |  |  | (36    | )
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Operating income                                                       |  |                                                                                                     | 1,919   |   |      |  | 1,248   |      |  |  | 1,351   |   |  |      | 1,235  |   |  |  | 162    |  
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Financial income                                                       |  |                                                                                                     | 1,539   |   |      |  | 1,124   |      |  |  | 936     |   |  |      | 442    |   |  |  | 289    |  
|Financial costs                                                        |  |                                                                                                     | (1,592  | ) |      |  | (1,052  | )    |  |  | (883    | ) |  |      | (512   | ) |  |  | (465   | )
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Income (loss) before income tax                                        |  |                                                                                                     | 1,866   |   |      |  | 1,320   |      |  |  | 1,404   |   |  |      | 1,165  |   |  |  | (14    | )
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Income tax                                                             |  |                                                                                                     | (971    | ) |      |  | (742    | )    |  |  | (552    | ) |  |      | (492   | ) |  |  | (15    | )
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Income (loss) from continuing operations                               |  |                                                                                                     | 895     |   |      |  | 578     |      |  |  | 852     |   |  |      | 673    |   |  |  | (29    | )
|Income from discontinued operations                                    |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |       |   |  |  | 706    |  
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Net income                                                             |  |                                                                                                     | 895     |   |      |  | 578     |      |  |  | 852     |   |  |      | 673    |   |  |  | 677    |  
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Actuarial profits and losses                                           |  |                                                                                                     | 44      |   |      |  | 1       |      |  |  | 10      |   |  |      | (7     | ) |  |  | 15     |  
|Foreign currency translation                                           |  |                                                                                                     | 1,172   |   |      |  | 518     |      |  |  | 278     |   |  |      | 45     |   |  |  | (133   | )
|Other comprehensive income related to our equity accounted investments |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      | 7      |   |  |  | 12     |  
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Total other comprehensive income                                       |  |                                                                                                     | 2,111   |   |      |  | 1,097   |      |  |  | 1,140   |   |  |      | 718    |   |  |  | 571    |  
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Earnings (losses) per share basic/diluted (in pesos):                  |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|From continuing operations                                             |  |                                                                                                     | 0.422   |   |      |  | 0.227   |      |  |  | 0.386   |   |  |      | 0.306  |   |  |  | (0.012 | )
|From discontinued operations                                           |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |       |   |  |  | 0.350  |  
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  
|Total                                                                  |  |                                                                                                     | 0.422   |   |      |  | 0.227   |      |  |  | 0.386   |   |  |      | 0.306  |   |  |  | 0.337  |  
|                                                                       |  |                                                                                                     |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |  



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|                                            |  |                                                                                                     |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     |  
|------------------------------------------- |  | --------------------------------------------------------------------------------------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---- | --- |  |  |  | --- | -
|                                            |  | Year Ended December 31,                                                                             |      
|                                            |  | 2015                                                                                                |       |  | 2014 |  |       | 2013 |  |  | 2012  |  |  | 2011 |    
|                                            |  | (in millions of pesos, except for per share amounts and number of
shares or as otherwise indicated) |      
|Net income attributable to:                 |  |                                                                                                     |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     |  
|Shareholders of the Company                 |  |                                                                                                     | 853   |  |      |  | 458   |      |  |  | 779   |  |  |      | 618 |  |  |  | 681 |  
|Non-controlling interest                    |  |                                                                                                     | 42    |  |      |  | 120   |      |  |  | 73    |  |  |      | 55  |  |  |  | (4  | )
|                                            |  |                                                                                                     |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     |  
|Total                                       |  |                                                                                                     | 895   |  |      |  | 578   |      |  |  | 852   |  |  |      | 673 |  |  |  | 677 |  
|                                            |  |                                                                                                     |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     |  
|Total comprehensive income for the year:    |  |                                                                                                     |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     |  
|From continuing operations                  |  |                                                                                                     | 2,111 |  |      |  | 1,097 |      |  |  | 1,140 |  |  |      | 718 |  |  |  | (1  | )
|From discontinued operations                |  |                                                                                                     |      |  |      |  |      |      |  |  |      |  |  |      |    |  |  |  | 572 |  
|                                            |  |                                                                                                     |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     |  
|Total                                       |  |                                                                                                     | 2,111 |  |      |  | 1,097 |      |  |  | 1,140 |  |  |      | 718 |  |  |  | 571 |  
|                                            |  |                                                                                                     |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     |  
|Total comprehensive income attributable to: |  |                                                                                                     |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     |  
|Shareholders of the Company                 |  |                                                                                                     | 1,487 |  |      |  | 741   |      |  |  | 896   |  |  |      | 624 |  |  |  | 575 |  
|Non-controlling interest                    |  |                                                                                                     | 624   |  |      |  | 356   |      |  |  | 244   |  |  |      | 94  |  |  |  | (4  | )
|                                            |  |                                                                                                     |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     |  
|Total                                       |  |                                                                                                     | 2,111 |  |      |  | 1,097 |      |  |  | 1,140 |  |  |      | 718 |  |  |  | 571 |  
|                                            |  |                                                                                                     |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     |  



4



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##### Table of Contents

Petrobras Argentina S.A.Consolidated Statement of Financial Position



|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|------------------------------------------- |  | --------------------------------------------------------------------------------------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | - |  | ---- | ------ | - |  |  | ------ | 
|                                            |  | Year Ended December 31,                                                                             |       
|                                            |  | 2015                                                                                                |        |   | 2014 |  |        | 2013 |  |  | 2012   |   |  | 2011 |       
|                                            |  | (in millions of pesos, except for per share amounts and number of
shares or as otherwise indicated) |       
|Statements of Financial Position            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Assets                                      |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Current assets                              |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Cash and cash equivalents                   |  |                                                                                                     | 2,229  |   |      |  | 2,278  |      |  |  | 1,193  |   |  |      | 1,260  |   |  |  | 1,192  | 
|Other investments                           |  |                                                                                                     | 43     |   |      |  | 33     |      |  |  | 23     |   |  |      | 20     |   |  |  | 21     | 
|Trade receivables                           |  |                                                                                                     | 3,241  |   |      |  | 2,945  |      |  |  | 2,519  |   |  |      | 2,168  |   |  |  | 1,871  | 
|Other receivables                           |  |                                                                                                     | 3,100  |   |      |  | 1,676  |      |  |  | 1,551  |   |  |      | 1,553  |   |  |  | 1,070  | 
|Inventories                                 |  |                                                                                                     | 2,130  |   |      |  | 1,951  |      |  |  | 1,310  |   |  |      | 1,023  |   |  |  | 970    | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Total current assets                        |  |                                                                                                     | 10,743 |   |      |  | 8,883  |      |  |  | 6,596  |   |  |      | 6,024  |   |  |  | 5,124  | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Non-current assets                          |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Trade receivables                           |  |                                                                                                     | 48     |   |      |  | 60     |      |  |  | 73     |   |  |      | 86     |   |  |  | 211    | 
|Other receivables                           |  |                                                                                                     | 186    |   |      |  | 163    |      |  |  | 245    |   |  |      | 238    |   |  |  | 896    | 
|Deferred income tax assets                  |  |                                                                                                     | 7      |   |      |  | 47     |      |  |  |       |   |  |      |       |   |  |  |       | 
|Inventories                                 |  |                                                                                                     | 78     |   |      |  | 67     |      |  |  | 58     |   |  |      | 45     |   |  |  | 39     | 
|Other investments                           |  |                                                                                                     | 290    |   |      |  | 153    |      |  |  | 301    |   |  |      | 279    |   |  |  | 348    | 
|Investments in associates                   |  |                                                                                                     | 3,130  |   |      |  | 2,979  |      |  |  | 3,568  |   |  |      | 3,006  |   |  |  | 2,943  | 
|Investments in joint ventures               |  |                                                                                                     | 441    |   |      |  | 491    |      |  |  | 497    |   |  |      | 689    |   |  |  | 724    | 
|Property, plant and equipment               |  |                                                                                                     | 14,174 |   |      |  | 11,589 |      |  |  | 9,524  |   |  |      | 8,480  |   |  |  | 7,056  | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Total non-current assets                    |  |                                                                                                     | 18,354 |   |      |  | 15,549 |      |  |  | 14,266 |   |  |      | 12,823 |   |  |  | 12,217 | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Total assets                                |  |                                                                                                     | 29,097 |   |      |  | 24,432 |      |  |  | 20,862 |   |  |      | 18,847 |   |  |  | 17,341 | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Liabilities                                 |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Current liabilities                         |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Accounts payable                            |  |                                                                                                     | 4,097  |   |      |  | 3,045  |      |  |  | 2,553  |   |  |      | 1,863  |   |  |  | 1,572  | 
|Short-term loans                            |  |                                                                                                     | 61     |   |      |  | 92     |      |  |  | 208    |   |  |      | 1,108  |   |  |  | 40     | 
|Payroll and social security taxes           |  |                                                                                                     | 473    |   |      |  | 371    |      |  |  | 304    |   |  |      | 258    |   |  |  | 194    | 
|Taxes payable                               |  |                                                                                                     | 775    |   |      |  | 1,134  |      |  |  | 578    |   |  |      | 470    |   |  |  | 310    | 
|Provisions                                  |  |                                                                                                     | 1,655  |   |      |  | 1,253  |      |  |  | 385    |   |  |      | 643    |   |  |  | 516    | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Total current liabilities                   |  |                                                                                                     | 7,061  |   |      |  | 5,895  |      |  |  | 4,028  |   |  |      | 4,342  |   |  |  | 2,632  | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Non-current liabilities                     |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Accounts payable                            |  |                                                                                                     |       |   |      |  | 4      |      |  |  | 7      |   |  |      | 172    |   |  |  | 184    | 
|Long-term loans                             |  |                                                                                                     | 3,910  |   |      |  | 2,587  |      |  |  | 2,024  |   |  |      | 1,558  |   |  |  | 2,182  | 
|Employment benefit obligations              |  |                                                                                                     | 534    |   |      |  | 438    |      |  |  | 336    |   |  |      | 269    |   |  |  | 195    | 
|Deferred income tax liabilities             |  |                                                                                                     | 863    |   |      |  | 499    |      |  |  | 548    |   |  |      | 354    |   |  |  | 247    | 
|Provisions                                  |  |                                                                                                     | 2,166  |   |      |  | 2,394  |      |  |  | 2,224  |   |  |      | 1,581  |   |  |  | 1,553  | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Total non-current liabilities               |  |                                                                                                     | 7,473  |   |      |  | 5,922  |      |  |  | 5,139  |   |  |      | 3,934  |   |  |  | 4,361  | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Total liabilities                           |  |                                                                                                     | 14,534 |   |      |  | 11,817 |      |  |  | 9,167  |   |  |      | 8,276  |   |  |  | 6,993  | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Equity                                      |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Capital Stock                               |  |                                                                                                     | 2,019  |   |      |  | 2,019  |      |  |  | 2,019  |   |  |      | 2,019  |   |  |  | 1,010  | 
|Other items in Capital                      |  |                                                                                                     | 2,186  |   |      |  | 2,186  |      |  |  | 2,186  |   |  |      | 2,186  |   |  |  | 2,186  | 
|Reserves income                             |  |                                                                                                     | 7,465  |   |      |  | 7,144  |      |  |  | 6,508  |   |  |      | 5,953  |   |  |  | 448    | 
|Other                                       |  |                                                                                                     | (693   | ) |      |  | (693   | )    |  |  | (693   | ) |  |      | (693   | ) |  |  |       | 
|Unappropriated retained earnings            |  |                                                                                                     | 853    |   |      |  | 458    |      |  |  | 752    |   |  |      | 528    |   |  |  | 6,635  | 
|Other comprehensive income                  |  |                                                                                                     | 1,106  |   |      |  | 472    |      |  |  | 189    |   |  |      | 72     |   |  |  | 66     | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Total shareholders equity attributable to: |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Shareholders of the Company                 |  |                                                                                                     | 12,936 |   |      |  | 11,586 |      |  |  | 10,961 |   |  |      | 10,065 |   |  |  | 10,345 | 
|Non-controlling interest                    |  |                                                                                                     | 1,627  |   |      |  | 1,029  |      |  |  | 734    |   |  |      | 506    |   |  |  | 3      | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Total equity                                |  |                                                                                                     | 14,563 |   |      |  | 12,615 |      |  |  | 11,695 |   |  |      | 10,571 |   |  |  | 10,348 | 
|                                            |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Number of shares outstanding (in millions)  |  |                                                                                                     |        |   |      |  |        |      |  |  |        |   |  |      |        |   |  |  |        | 
|Class B                                     |  |                                                                                                     | 2,019  |   |      |  | 2,019  |      |  |  | 2,019  |   |  |      | 2,019  |   |  |  | 1,010  | 



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##### Table of Contents

|                                               |  |                                                                                                     |       |  |      |  |       |      |  |  |      |  |  |      |       |  |  |  |       | 
|---------------------------------------------- |  | --------------------------------------------------------------------------------------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ---- |  |  | ---- | ----- |  |  |  | ----- | 
|                                               |  | Year Ended December 31,                                                                             |      
|                                               |  | 2015                                                                                                |       |  | 2014 |  |       | 2013 |  |  | 2012 |  |  | 2011 |      
|                                               |  | (in millions of pesos, except for per share amounts and number of
shares or as otherwise indicated) |      
|Dividends per share (in pesos) (1)             |  |                                                                                                     | 0.068 |  |      |  | 0.057 |      |  |  |     |  |  |      | 0.105 |  |  |  | 0.091 | 
|Dividends per share (in U.S.$. dollars)(1)
(2) |  |                                                                                                     | 0.007 |  |      |  | 0.007 |      |  |  |     |  |  |      | 0.022 |  |  |  | 0.022 | 



|(1) | Amounts calculated on outstanding capital stock of 2,019 million shares.
|--- | ------------------------------------------------------------------------

|(2) | Amounts translated into U.S. dollars at the exchange rate at the date of payment.
|--- | ---------------------------------------------------------------------------------

EXCHANGE RATES

From April 1, 1991 until the end of 2001, Law No. 23,928 and Decree No. 529/91 (together, the
Convertibility Law) established a fixed exchange rate under which the Banco Central de la República Argentina(the Central Bank of Argentina, or the Central Bank) was obliged to sell U.S. dollars at
a fixed rate of one peso per U.S. dollar. On January 6, 2002, the Argentine Congress enacted the Public Emergency and Foreign Exchange System Reform Law No. 25,561 (the Public Emergency Law), which suspended certain provisions
of the Convertibility Law, including the fixed exchange rate of Ps.1.00 to U.S.$1.00, and granted the Argentine government the power to set the exchange rate between the peso and foreign currencies and to issue regulations related to the foreign
exchange market. Following a brief period during which the Argentine government established a temporary dual exchange rate system, pursuant to the Public Emergency Law, the peso has been allowed to float freely against other currencies since
February 2002, although the Central Bank has the power to intervene by buying and selling foreign currency for its own account, a practice in which it may engage on a regular basis.

After several years of moderate variations in the nominal exchange rate, the peso lost more than 30% of its value with respect to the U.S.
dollar in each of 2013 and 2014, and in 2015, the peso lost approximately 52% of its value with respect to the U.S. dollar, including a depreciation of approximately 35% mainly experienced after December 17, 2015 following the announcement of
the lifting by the Central Bank of most foreign exchange controls. See Risk FactorsFactors Relating to ArgentinaFluctuations in the value of the peso could adversely affect the Argentine economy, and consequently, our results
of operations or financial condition. The peso has been allowed to float with Central Bank interventions intended to ensure the orderly functioning of the foreign exchange market. There can be no assurance that the Argentine peso will not
depreciate or appreciate significantly with respect to the U.S. dollar and other currencies in the future.

The following table sets forth
the annual high, low, average and period-end exchange rates for the periods indicated, expressed in Argentine pesos per U.S. dollar and not adjusted for inflation, based on rates quoted by the Banco de la Nación Argentina(the
National Bank of Argentina). The Federal Reserve Bank of New York does not report a buying rate for pesos.



|                        |  |                                |       |  |     |  |       |             |  |  |            |  |  |  |       | 
|----------------------- |  | ------------------------------ | ----- |  | --- |  | ----- | ----------- |  |  | ---------- |  |  |  | ----- | 
|                        |  | Argentine peso per U.S. dollar |      
|                        |  | High                           |       |  | Low |  |       | Average (1) |  |  | Period-end | 
|Year ended December 31, |  |                                |       |  |     |  |       |             |  |  |            |  |  |  |       | 
|                        |  |                                |       | 
|2015                    |  |                                | 13.40 |  |     |  | 8.55  |             |  |  | 9.26       |  |  |  | 13.04 | 
|2014                    |  |                                | 8.56  |  |     |  | 6.52  |             |  |  | 8.12       |  |  |  | 8.55  | 
|2013                    |  |                                | 6.49  |  |     |  | 4.92  |             |  |  | 5.47       |  |  |  | 6.49  | 
|2012                    |  |                                | 4.91  |  |     |  | 4.30  |             |  |  | 4.55       |  |  |  | 4.91  | 
|2011                    |  |                                | 4.30  |  |     |  | 3.97  |             |  |  | 4.13       |  |  |  | 4.30  | 
|                        |  |                                |       | 
|Month:                  |  |                                |       |  |     |  |       |             |  |  |            |  |  |  |       | 
|                        |  |                                |       | 
|April 2016 (2)          |  |                                | 14.79 |  |     |  | 14.05 |             |  |  | 14.50      |  |  |  | 14.05 | 
|March 2016              |  |                                | 15.80 |  |     |  | 14.39 |             |  |  | 14.99      |  |  |  | 14.70 | 
|February 2016           |  |                                | 15.80 |  |     |  | 14.13 |             |  |  | 14.85      |  |  |  | 15.80 | 
|January 2016            |  |                                | 13.90 |  |     |  | 13.04 |             |  |  | 13.61      |  |  |  | 13.84 | 
|December 2015           |  |                                | 13.40 |  |     |  | 9.70  |             |  |  | 11.41      |  |  |  | 13.04 | 
|November 2015           |  |                                | 9.68  |  |     |  | 9.55  |             |  |  | 9.62       |  |  |  | 9.68  | 



|(1) | The figures provided represent the average of the exchange rates at the close of trading on each business day during the relevant period.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

|(2) | Through April 15, 2016.
|--- | -----------------------



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##### Table of Contents

EXCHANGE CONTROLS

Prior to December 1989, the Argentine foreign exchange market was subject to exchange controls. From December 1989 until April 1991, Argentina
had a freely floating exchange rate for all foreign currency transactions, and the transfer of dividend payments in foreign currency abroad and the repatriation of capital were permitted without prior approval of the Central Bank. From April 1,
1991, when the Convertibility Law became effective, until December 21, 2001, when the Central Bank decided to close the foreign exchange market, the Argentine currency was freely convertible into U.S. dollars.

On December 3, 2001, the Argentine government imposed a number of monetary and currency exchange control measures through Decree
No. 1,570/01, which included restrictions on the free disposition of funds deposited with banks and tight restrictions on transferring funds abroad without the Central Banks prior authorization subject to specific exceptions for transfers
related to foreign trade. Between 2002 and the first half of 2011, the Central Bank gradually eased these restrictions.

In June 2003, the
Argentine government set restrictions on capital flows into Argentina, which mainly consisted of a prohibition against the transfer abroad of any funds until 180 days after their entry into the country. Furthermore, in June 2005, through Decree
No. 616/05, the Argentine government established further restrictions on capital flows into Argentina, including increasing the period that certain incoming funds must remain in Argentina to 365 calendar days and requiring that 30% of such
incoming funds be deposited with a bank in Argentina in a non-transferable, non-interest-bearing account for 365 calendar days. Export and import financing operations, as well as primary public offerings of corporate bonds listed on self-regulated
markets, among others, are exempt from the foregoing provision.

On October 25, 2011, the Argentine government issued Decree
No. 1,722/11, providing that all foreign currency revenues obtained from exports made by mining and oil and gas companies must be repatriated and sold within the local foreign exchange market, which is the general regime applicable to revenues
generated by Argentine exports. Prior to the issuance of this decree, companies engaged in exploration and development of hydrocarbons benefited from a special regime that allowed them to retain overseas up to 70% of the proceeds of certain exports.

Between October 2011 and December 17, 2015, the Argentine government expanded the restrictions on access to the foreign exchange
market and transfers of foreign currency abroad. Through a combination of foreign exchange and tax regulations, the Argentine authorities significantly curtailed access to foreign exchange by individuals and private sector entities. Foreign exchange
regulations included, among others, the obligation to obtain prior approval by the Central Bank of certain foreign exchange transactions such as payments relating to royalties, services or fees payable to related parties of Argentine companies
outside Argentina, the suspension of previously permitted purchases of foreign exchange in an amount of up to U.S.$2 million per month to create or increase portfolio investments outside of Argentina, and limits to the net position in foreign
exchange holdings of financial institutions. See Risk FactorsFactors Relating to ArgentinaEconomic and political instability in Argentina has affected and may continue to adversely affect our financial condition and results
of operations.

On December 17, 2015, the Central Bank modified exchange control regulations to permit greater flexibility and
easier access to the foreign exchange market for individuals and private sector entities, including: the reduction of the mandatory minimum period for foreign financial indebtedness from 365 calendar to 120 calendar days, with a reduction to zero
percent of the mandatory deposit (encaje) and the elimination of the prior Central Bank approval requirement to access the exchange market for the payment of royalties, services and fees payable to foreign related entities. In
addition, access to the exchange market was reestablished for the purchase of foreign assets in an aggregate amount of up to U.S.$ 2 million per calendar month, and the CNV eliminated the requirement of a minimum holding period of 72 business
hours in connection with purchases and subsequent sales of securities listed or negotiated in any local and international stock exchange markets. See Risk FactorsFactors Relating to Argentina The impact of the recent
congressional and presidential elections on the future economic and political environment of Argentina is uncertain.



7



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##### Table of Contents

RISK FACTORS

Factors Relating to Argentina

Economic and
political instability in Argentina has affected and may continue to adversely affect our financial condition and results of operations.

We are exposed to economic and political conditions in Argentina, considering that as of December 31, 2015, approximately 81% of our
total assets, 99% of our sales, 92% of our combined crude oil and gas production and 90% of our proved oil and gas reserves were located in Argentina.

The Argentine economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth, high and
variable levels of inflation and currency devaluation. As a consequence, our business and operations have been, and may in the future be, affected from time to time to varying degrees by economic and political developments and other material events
affecting the Argentine economy, such as: inflation; price controls; exchange controls; fluctuations in foreign currency exchange rates and interest rates; currency devaluation; governmental policies regarding spending and investment, and other
initiatives increasing government involvement in economic activities; social unrest and local security concerns. You should make your own investigation into Argentinas economy and its prevailing conditions before making an investment in us.

During 2001 and 2002, Argentina went through a period of severe political, economic and social crisis. Among other consequences, the
crisis resulted in Argentina defaulting on its foreign debt obligations, introducing emergency measures and numerous changes in economic policies that affected utilities and many other sectors of the economy. Argentina also suffered a significant
real devaluation of the peso, which in turn caused numerous Argentine private sector debtors with foreign currency exposure to default on their outstanding debt. Following that crisis, Argentina substantially increased its real GDP. During 2008 and
2009, however, the Argentine economy suffered a slowdown attributed to local and external factors, including an extended drought affecting agricultural activities, and the effects of the global economic crisis. Real GDP growth recovered in 2010 and
2011, with GDP increasing to 9.5% and 8.4%, respectively. However, GDP growth slowed to 0.8% in 2012, recovering again to 2.9% in 2013. According to the INDEC, economic activity grew 0.5% in 2014 and 2.1% in 2015 (based on preliminary GDP data),
mainly as a result of the growth in the agricultural and construction segments. In 2014, private consumption and investment contracted by 0.5% and 5.5%, respectively. The economys contraction was primarily due to the weakening of the domestic
demand, which resulted, in part, from the increase in domestic prices due to the Central Banks financing of the governments fiscal imbalance. Private sector performance also weakened, mainly due to an increase in prices, a decrease in
the pesos purchasing power, limited access to credit markets and increased consumer saving in response to uncertain financial conditions.

Argentina has suffered inflationary pressures since 2007, evidenced by continued increases in fuel, energy and food prices, among other
indicators. According to inflation data published by the INDEC, from 2011 to 2014, the Argentine CPI increased 9.5%, 10.8%, 10.9% and 24.0% in each of those years, respectively, and 11.9% in the ten-month period ended October 31, 2015. The WPI
increased 12.7%, 13.1%, 14.8% and 28.3% in each of those years, respectively, and 10.6% in the ten-month period ended October 31, 2015. In November 2015, the INDEC suspended the publication of the CPI and the WPI.

From 2007 through 2015, the INDEC experienced a process of institutional and methodological reforms that gave rise to controversy with respect
to the reliability of the information that it produces, including inflation, GDP and unemployment data. Reports published by the IMF stated that their staff used alternative measures of inflation for macroeconomic surveillance, including data
produced by private sources, which have shown inflation rates considerably higher than those published by the INDEC since 2007. The IMF also censured Argentina in 2013 for failing to make sufficient progress in adopting remedial measures to address
the quality of official data, including inflation and GDP data.

On February 13, 2014, the INDEC released the IPCNu which measures
prices on goods across the country and replaced the previous index that only measured inflation in the urban sprawl of the City of Buenos Aires. Even though the IPCNu brought inflation statistics closer to those estimated by private sources,
differences between official inflation data and private estimates remained at the end of 2015.

Since the first weeks after assuming
office on December 10, 2015, the new administration has introduced economic and policy reforms. See The impact of the recent congressional and presidential elections on the future economic and political environment of Argentina is
uncertain. In addition, the Argentine government has restarted negotiations with holdout creditors from the last Argentine debt restructuring. See A lack of financing for Argentine companies, whether due to market forces,
government regulation or the unresolved litigation with holdout bondholders, may negatively impact our financial condition or cash flows.



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In January 2016, the new administration, through Decree No. 55/2016, declared a state of
administrative emergency in the national statistics system, and the new INDEC authorities announced the discontinuation of the methodology previously used to measure inflation and suspended the publication of all indices until the INDEC is in a
position to calculate such indices based on adequate and reliable official data. The INDEC has suggested using CPI figures published by the Province of San Luis and the City of Buenos Aires for reference in the meantime. According to the Province of
San Luis reports, the inflation rate was 2.9%, 6.5%, 4.2%, 2.7% and 3.0%, in November 2015, December 2015, January 2016, February 2016 and March 2016, respectively. According to the City of Buenos Aires reports, the
inflation rate was 2.0%, 3.9%, 4.1%, 4.0% and 3.3%, in November 2015, December 2015, January 2016, February 2016 and March 2016, respectively.

Since 2007 inflation in Argentina has contributed to a material increase in our costs of operation, in particular labor costs, and negatively
impacted our results of operations and financial condition. There can be no assurance that inflation rates will not escalate further in the future, or of what effects the measures adopted or that may be adopted by the Argentine government to control
inflation may have in the future. See Government intervention in the Argentine economy could adversely affect our results of operations or financial condition.

We cannot provide any assurance that inflation, or other future economic, social and political developments in Argentina, over which we have
no control, will not adversely affect our financial condition or results of operations, including our ability to pay our debts at maturity or dividends.

The impact of the recent congressional and presidential elections on the future economic and political environment of Argentina is uncertain.

Presidential and congressional elections took place in Argentina on October 25, 2015, and a runoff election (ballotage)
between the two leading presidential candidates was held on November 22, 2015, which resulted in Mr. Mauricio Macri being elected president of Argentina for a four-year period. The new administration assumed office on December 10,
2015.

Since assuming office, the new administration has announced and implemented certain economic and policy reforms, including:

Electricity system state of emergency and reforms. The Argentine government, through Decree No. 134/2015, has declared a state of
emergency with respect to the national electricity system that will remain in effect until December 31, 2017. The state of emergency allows the Argentine government to take actions designed to guarantee the supply of electricity in Argentina
such as instructing the Ministerio de Energía y Minería de la Nación (the Ministry of Energy and Mining) to elaborate and implement, with the cooperation of all federal public entities, a coordinated program
to guarantee the quality and security of the electricity system and rationalize public entities consumption of energy. In addition, through Resolution No. 6/2016 of the Ministry of Energy and Mining and Resolution No. 1/2016 of the
Ente Nacional Regulador de la Electricidad(the ENRE), the new administration announced the elimination of certain energy subsidies and a substantial increase in electricity rates.

INDEC reforms. The new administration, through Decree No. 55/2016, declared a state of administrative emergency in the national
statistics system and the new INDEC authorities suspended the publication of all indices until the INDEC is in a position to calculate such indices based on adequate and reliable official data, and is working to implement certain methodological
reforms and adjust certain macroeconomic statistics on the basis of such reforms.

Foreign exchange reforms. The new administration
has implemented certain changes to the foreign exchange market that provide greater flexibility and easier access to the foreign exchange market for individuals and private sector entities. The principal measures adopted as of the date of this
Annual Report include (i) the elimination of the requirement to mandatory transfer and settle the proceeds from new foreign financial indebtedness incurred by the foreign financial sector, the non-financial private sector and local governments
through the single and free floating foreign exchange market (the MULC) (except that the evidence of the mandatory transfer and settlement of funds through the MULC will still be required for subsequent access to the MULC in order to
repay principal and interest of such indebtedness); (ii) the reduction of the mandatory minimum period in which the proceeds of any new financial indebtedness and renewal of existing indebtedness incurred by residents, held by foreign creditors
and transferred through the MULC must be kept in Argentina, from 365 calendar days to 120 calendar days from the date of the transfer of the relevant amount; (iii) in the case of partial or total prepayment of principal corresponding to new
foreign financial indebtedness, access to the MULC is permitted subject to the mandatory minimum period mentioned above; (iv) the reestablishment of Argentine residents rights to purchase foreign currency in an amount up to U.S.$
2.0 million per month to acquire offshore assets; (v) the reduction from 30% to 0% of a mandatory, non-transferable and non-interest bearing deposit of the amount of certain transactions involving foreign currency inflows for a 365
calendar day period; and (vi) the elimination of the requirement of a minimum holding period (72 business hours) for purchases and subsequent sales of securities. See Exchange Controls



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Deficit reduction. The new administration has announced its intention to reduce its
primary budget deficit from approximately 5.8% of GDP in 2015, to 4.8% of GDP in 2016 and 3.3% of GDP in 2017, in part by eliminating public services subsidies in effect and decreasing public spending.

Foreign trade reforms. The new administration has eliminated export duties on wheat, corn, beef and regional products, and reduced the
duty on soybeans by 5% to 30%. Furthermore, the 5% export duty on most industrial exports and export duties on mining exports were eliminated. With respect to payments for imports and services to be performed abroad, the new administration announced
the gradual elimination of limitations on transaction amounts for any transactions through the MULC. The limitations for such transactions have been eliminated as from June 2016.

As of the date of this Annual Report, the impact that these measures or other measures announced will have on the Argentine economy and the
timing of such implementation cannot be predicted.

Fluctuations in the value of the peso could adversely affect the Argentine economy and,
consequently, our results of operations or financial condition.

Fluctuations in the value of the peso may also adversely affect
the Argentine economy, our financial condition and results of operations. Since January 2002, the peso has fluctuated significantly in value. If the peso devalues significantly, all of the negative effects on the Argentine economy related to such
devaluation could also have adverse consequences for our business. A substantial increase in the value of the peso against the U.S. dollar also represents risks for the Argentine economy since it may lead to a deterioration of the countrys
current account balance and the balance of payments.

After several years of moderate variations in the nominal exchange rate, the peso
lost more than 30% of its value with respect to the U.S. dollar in each of 2013 and 2014, and in 2015, the peso lost approximately 52% of its value against the U.S. dollar, including a depreciation of approximately 35% mainly experienced after
December 17, 2015 following the announcement of the lifting of a most foreign exchange controls. Since the devaluation in December 2015, the Central Bank has allowed the peso to float and limited interventions to those needed to ensure the
orderly functioning of the foreign exchange market. As of April 15, 2016, the exchange rate was Ps.14.05 to U.S.$.1.00.

A continued
devaluation of the peso could have adverse consequences for our business. An increase in the devaluation of the peso could negatively affect our results of operations if the government enacts measures that do not permit us to pass those costs along
to customers. See Factors Relating to Our BusinessLimitations on local pricing in Argentina may adversely affect our results of operations. We are unable to predict the future value of the peso against the U.S. dollar and how
any fluctuations may affect the demand for our products and services or the costs that we incur in conducting our operations or our results.

Notwithstanding the measures recently adopted by the new administration, any future exchange control regulations may prevent or limit us from
offsetting the risk derived from our exposure to the U.S. dollar and consequently, adversely affect our financial condition and results of operations.

Government intervention in the Argentine economy could adversely affect our results of operations or financial condition.

In addition to the political and economic factors described above, our business and operations have been, and could in the future be, affected
by actions taken by the Argentine government through the implementation of new, or the amendment of existing, laws and regulations, such as: nationalizations, expropriations or forced divestiture of assets; restrictions on production, imports and
exports; exchange or transfer restrictions; direct and indirect price controls; obligations to supply primarily to the domestic market (even if it entails importing products with negative margins); tax increases, changes in the interpretation or
application of tax laws and other retroactive tax claims or challenges; cancellation of contract rights; and delays or denials of governmental approvals.

Between 2007 and 2015, the Argentine government increased its direct intervention in the economy, including through the implementation of
expropriation and nationalization measures, price controls and exchange controls.

In 2008, the Argentine government absorbed and replaced
the former private pension system for a public pay as you go pension system. As a result, all resources administered by the private pension funds, including significant equity interests in a wide range of listed companies, were
transferred to a separate fund (Fondo de Garantía de Sustentabilidad, or the FGS) to be administered by the National Social Security Administration (Administración Nacional de la Seguridad Social, or the
ANSES). The dissolution of the private pension funds and the transfer of their financial assets to the FGS have had important repercussions on the financing of private sector companies. Debt and equity instruments which previously could
be placed with pension fund administrators are now entirely subject to the discretion of the ANSES. Since acquiring equity interests in privately owned companies through the process of replacing the pension system, the ANSES is entitled to designate
government representatives to the boards of directors of those entities. Pursuant to Decree No. 1,278/12, issued by the Argentine government on July 25, 2012, the ANSESs representatives must report directly to the Ministry of Economy
and are subject to a mandatory information-sharing regime, under which, among other obligations, they must immediately inform the Ministry of Economy of the agenda for each board of directors meeting and provide related documentation.



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In April 2012, the Argentine government decreed the removal of directors and senior officers of
YPF S.A. (YPF), the countrys largest oil and gas company, which was controlled by the Spanish group Repsol, and submitted a bill to the Argentine Congress to expropriate shares held by Repsol representing 51% of the shares of YPF.
The Argentine Congress approved the bill in May 2012 through the passage of Law No. 26,741, which declared the production, industrialization, transportation and marketing of hydrocarbons to be activities of public interest and fundamental
policies of Argentina, and empowered the Argentine government to adopt any measures necessary to achieve self-sufficiency in hydrocarbon supply. In February 2014, the Argentine government and Repsol announced that they had reached an agreement on
the terms of the compensation payable to Repsol for the expropriation of the YPF shares. Such compensation totaled U.S.$5 billion payable by delivery of Argentine sovereign bonds with various maturities. The agreement, which was ratified by Law
No. 26,932, settled the claim filed by Repsol with the International Centre for Settlement of Investment Disputes (the ICSID). See Factors Relating to Our BusinessThe Argentine government and provincial governments
have intervened in the oil and gas industry in the past, and are likely to continue to intervene.

Our business and operations in
Argentina may also be adversely affected by measures adopted by the Argentine government to address inflation. For example, increases in the costs of services and labor could negatively affect our results of operations if the government enacts
measures that do not permit us to pass those costs along to customers. See Factors Relating to Our BusinessLimitations on local pricing in Argentina may adversely affect our results of operations.

In addition, on October 26, 2011, the Argentine government issued Decree No. 1,722/11, providing that all foreign currency revenues
obtained from exports made by mining and oil and gas companies must be repatriated and sold within the local foreign exchange market, which is the general regime applicable to revenues generated by Argentine exports. Prior to the issuance of this
decree, we were allowed to retain overseas up to 70% of the proceeds of certain exports. See Item 3. Key InformationExchange Controls and Item 5. Operating and Financial Review and ProspectsDescription of
Indebtedness.

It was widely reported by private economists that expropriations, price controls, exchange controls and other direct
involvement by the Argentine government in the economy have had an adverse impact on the level of investment in Argentina, the access of Argentine companies to the international capital markets and Argentinas commercial and diplomatic
relations with other countries. Recent measures taken by the new administration include: the reduction or elimination of certain restrictions to operate in the foreign exchange market, the increase in interest rates for loans in pesos, the removal
or reduction of taxes on exports for certain products and the increase of electricity and gas tariffs to reduce energy subsidies and the fiscal deficit. In February 2016, the Argentine government entered into an agreement in principle to settle with
certain holders of defaulted debt and put forward a proposal to other holders of defaulted debt. On April 22, Argentina issued U.S.$16.5 billion of new debt securities in the international capital markets, and applied U.S.$9.3 billion to satisfy
settlement payments on agreements with holders of approximately U.S.$8.2 billion principal amount of defaulted bonds. See A lack of financing for Argentine companies, whether due to market forces, government regulation or the unresolved
litigation with holdout bondholders, may negatively impact our financial condition or cash flows. Notwithstanding the measures recently adopted by the new administration, the level of government intervention in the economy may continue or increase,
which may adversely affect Argentinas economy and, in turn, our business, results of operations and financial condition.

The Argentine
economy can be adversely affected by economic developments in other markets and by more general contagion effects, which could have a material adverse effect on Argentinas economic growth.

Argentinas economy is vulnerable to external shocks that could be caused by adverse developments affecting its principal trading
partners (including Brazil, the European Union, China and the United States). A significant decline in the economic growth of any of Argentinas major trading partners, such as the current slowdown of the Brazilian economy and substantial
depreciation of its currency, could have a material adverse impact on Argentinas balance of trade and adversely affect Argentinas economic growth. Declining demand for Argentine exports, or a decline in the international market prices
for those products, could have a material adverse effect on Argentinas economic growth.

A decline in the international prices for
Argentinas main commodity exports would have a negative impact on the levels of government revenues and the governments ability to service its sovereign debt, and could either generate recessionary or inflationary pressures, depending on
the governments reaction. Either of these results would adversely impact Argentinas economy and, in turn, our business, results of operations and financial condition. See Substantial or extended declines and volatility in the
prices of crude oil, oil products and natural gas may have an adverse effect on our results of operations and financial condition.

In addition, financial and securities markets in Argentina have been influenced by economic and market conditions in other markets worldwide.
Although economic conditions vary from country to country, investors perceptions of events occurring in other countries have in the past substantially affected, and may continue to substantially affect, capital flows into, and investments in
securities from issuers in, other countries, including Argentina. International investors reactions to events occurring in one market sometimes demonstrate a contagion effect in which an entire region or class of investment is
disfavored by international investors, Argentina could be adversely affected by negative economic or financial developments in other countries, which in turn may have an adverse effect on our financial condition and results of operations.



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There can be no assurance that the Argentine economy, its financial system and securities markets
will not be adversely affected by events in developed countries economies or events in other emerging markets. A slowdown in economic activity in Argentina would adversely affect our business, financial condition and results of operations.

A lack of financing for Argentine companies, whether due to market forces, government regulation or the unresolved litigation with holdout
bondholders, may negatively impact our financial condition or cash flows.

The prospects for Argentine companies of accessing
financial markets might be limited in terms of the amount of financing available, and the conditions and cost of such financing.

Economic
policy measures adopted by the Argentine government, may continue to prevent Argentine companies such as us from accessing the international capital markets or make the terms of any such transactions less favorable than those provided to companies
in other countries in the region, and may therefore negatively impact our financial condition or cash flows.

In 2005 and 2010, Argentina
conducted exchange offers to restructure part of its sovereign debt that had been in default since the end of 2001. As a result of these exchange offers, Argentina restructured over 92% of its eligible defaulted debt.

Commencing in 2002, holdout creditors filed numerous lawsuits against Argentina in several jurisdictions, including the United States, Italy,
Germany, and Japan. These lawsuits generally assert that Argentina failed to make timely payments of interest and/or principal on their bonds, and seek judgments for the face value of and/or accrued interest on those bonds. Judgments have
been issued in numerous proceedings in the United States and Germany, but to date judgment creditors have not succeeded, with a few minor exceptions, in executing on those judgments.

In February 2012, plaintiffs in 13 actions in New York, involving claims for U.S.$ 428 million in principal, plus interest,
obtained a U.S. district court order enjoining Argentina from making interest payments in full on the bonds issued pursuant to the 2005 and 2010 exchange offers (Exchange Bonds) unless Argentina paid the plaintiffs in full, under the
theory that the former payments violated the pari passu clause in the 1994 Fiscal Agency Agreement (the FAA) governing those non-performing bonds. The U.S. district court order was stayed
pending appeals. The Second Circuit Court of Appeals affirmed the so-called pari passuinjunctions, and on June 16, 2014 the U.S. Supreme Court denied Argentinas petition for a writ of certiorari and the stay of the pari
passuinjunctions was vacated on June 18. Additionally, in 2015, plaintiffs that had obtained pari passu injunctions amended their complaints to include claims that Argentinas servicing of more recently issued BONAR 2024
bonds, as well as all external indebtedness in general, would violate the pari passu clause. The U.S. district court has not ruled on these new claims and discovery among the parties remains ongoing. On October 30, 2015, the U.S.
district court issued new pari passuinjunctions, substantially identical to the ones already in effect, in 49 additional proceedings, involving claims for over U.S.$ 2.1 billion under the 1994 FAA, plus billions more in pre- and
post-judgment interest. Argentina appealed the decision on November 10, 2015.

In 2014, the Argentine Government took a
number of steps intended to continue servicing the bonds issued in the 2005 and 2010 exchange offers, which had limited success. Holdout creditors continued to litigate expanding the scope of issues to include payment by the Argentine Government on
debt other than the Exchange Bonds and the separateness of the Central Bank.

The new administration engaged in negotiations with holders
of defaulted bonds in December 2015 with a view to bringing closure to fifteen years of litigation. In February 2016, the Argentine government entered into an agreement in principle to settle with certain holders of defaulted debt and put forward a
proposal to other holders of defaulted debt, including those with pending claims in U.S. courts, subject to two conditions: obtaining approval by the Argentine Congress and the lifting of the pari passuinjunctions. On March 2, 2016, the
U.S. district court agreed to vacate the pari passuinjunctions, subject to two conditions: first, the repealing of all legislative obstacles to settlement with holders of defaulted debt securities issued under the FAA, and second, full
payment to holders of pari passu injunctions with whom the Argentine government had entered into an agreement in principle on or before February 29, 2016, in accordance with the specific terms of such agreements. The U.S. district courts
order was appealed and on April 13, 2016 was affirmed by the Second Circuit Court of Appeals. On March 31, 2016, the Argentine Congress repealed the legislative obstacles to the settlement and approved the settlement proposal. On April 22, Argentina
issued U.S.$ 16.5 billion of new debt securities in the international capital markets, and applied U.S.$ 9.3 billion to satisfy settlement payments on agreements with holders of approximately U.S.$ 8.2 billion principal amount of defaulted bonds.
The U.S. district court ordered the vacatur of all pari passu injunctions upon confirmation of such payments.

As of the date of this
Annual Report, litigation initiated by bondholders that have not accepted Argentinas settlement offer continues in several jurisdictions, although the size of the claims involved has decreased significantly. The lifting of the injunctions
issued by the United States courts preventing bondholders from receiving their interest payments on the bonds issued pursuant to the 2005 and 2010 exchange offers and the related subsequent events paved the way for the Argentine government to regain
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Application of certain laws and regulations is uncertain and could adversely affect our results of
operations and financial condition.

Law No. 26,854, which regulates injunctions in cases to which the Argentine government
is a party or has intervened, took effect on April 30, 2013 as part of a judicial reform bill approved by the Argentine Congress. Among the principal changes implemented pursuant to the judicial reform bill are a time limitation on injunctions
imposed in proceedings brought against the Argentine government and the creation of three new chambers of Casación which hear appeals prior to the intervention of the Supreme Court of Justice. In addition, Law No. 26,855, which
became effective on May 27, 2013, modified the structure and functions of the Argentine Consejo de la Magistratura (judicial council), which is empowered to appoint judges, present charges against them, and suspend or remove them.
However, certain aspects of the legislation have been struck down by the Supreme Court as unconstitutional.

On September 18, 2014,
the Argentine Congress enacted Law No. 26,991 amending Law No. 20,680 (the Supply Law), which became effective on September 28, 2014, to increase control over the supply of goods and provision of services. Such initiative
includes the ability of the Argentine government to regulate consumer rights under Article 42 of the Constitution and permits the creation of an Observer of Prices of Goods and Services. The Supply Law, as amended: (i) requires the continued
production of goods to meet basic requirements; (ii) creates an obligation to publish prices of goods and services produced and borrowed; (iii) allows financial information to be requested and seized; (iv) intensifies fines for
judicial and fiscal persons. The reforms and creation of the Observer of Prices of Goods and Services could adversely affect our operations. An initiative to regulate questions of consumer rights was also approved, creating the
Conciliación Previa en las Relaciones de Consumo (COPREC), where users and consumers may present claims free of charge and have them resolved within 30 days.

The Supply Law applies to all economic processes linked to goods, facilities and services which, either directly or indirectly, satisfy basic
needs of the population (Basic Needs Goods) and grants a broad delegation of powers to its enforcing agency involved in such processes. It also empowers the enforcing agency to order the sale, production, distribution or delivery of
Basic Needs Goods throughout the country in case of a shortage of supply.

On October 1, 2014, the Argentine Congress approved the
reform, update and unification of the National Civil and Commercial codes. A single new National Civil and Commercial Code became effective on August 1, 2015. The consequences of the reform and its subsequent judicial application cannot be
predicted.

The long-term impact of recently adopted legislation on Argentinas legal system and future administrative or judicial
proceedings, including potential future claims by us against the Argentine government, cannot be predicted.

Factors Relating to Our Business

Substantial or extended declines and volatility in the prices of crude oil, oil products and natural gas may have an adverse effect on our results of
operations and financial condition.

A significant amount of our revenue is derived from sales of crude oil, oil products and
natural gas. Factors affecting international prices for crude oil and related oil products include: political developments in crude oil producing regions, particularly the Middle East; the ability of the Organization of Petroleum Exporting Countries
(OPEC) and other crude oil producing nations to set and maintain crude oil production levels and prices; global and regional supply and demand for crude oil, gas and related products; competition from other energy sources; domestic and
foreign government regulations; weather conditions; and global and local conflicts or acts of terrorism. We have no control over these factors. Changes in crude oil prices generally result in changes in prices for related products. International oil
prices have fluctuated widely in recent years, declining significantly since the second half of 2014.

Substantial or extended declines in
international prices of crude oil and related oil products may have a material adverse effect on our business, results of operations and financial condition and the value of our proved reserves. In addition, significant decreases in the prices of
crude oil and related oil products may require us to incur impairment charges in the future or cause us to reduce or alter the timing of our capital expenditures, and this could adversely affect our production forecasts in the medium term and our
reserves estimates in the future.

Argentine oil and gas production concessions and exploration permits are subject to certain conditions and may
not be renewed or could be revoked.

Law No. 17,319 (the Hydrocarbons Law), as amended by Law No. 27,007,
provides that conventional (oil and gas) concessions remain in effect for 25 years, non-conventional concessions for 35 years and offshore concessions for 30 years, from the date of their award, and further provides for the extension of concession
periods for up to additional ten years, subject to terms and conditions approved by the grantor at the time of the extension. The authority to extend the terms of current and new permits, concessions and contracts is vested with the government of
the Argentine province in which the relevant area is located (or the



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Argentine government in respect of offshore areas beyond 12 nautical miles). In order to be eligible for an extension, under the amended Hydrocarbons Law, concessionaires must (i) have
complied with their obligations under the law and their concession, (ii) be producing hydrocarbons in the concession under consideration, and (iii) submit an investment plan for the development of such areas as requested by the competent
authorities at least one year prior to the termination of the concession term. Further, concessionaires applying for extensions under Law No. 27,007 must make additional royalty payments ranging from 3% up to a maximum of 18%. Non-compliance
with the obligations and standards set out in the Hydrocarbons Law may also result in the imposition of fines and, in the case of material breaches following the expiration of applicable cure periods, revocation of the concession or permit. We
cannot provide assurances that concessions will be extended as a result of the review by the relevant authorities of the investment plans we submit for such purposes in the future, or that other requirements will not be imposed on us in order to
obtain extensions. See Item 4. Information on the CompanyBusiness OverviewOil and Gas Exploration and ProductionOur Oil and Gas Exploration and Production Interests.

Our crude oil and natural gas reserves estimates involve some degree of uncertainty that could adversely affect our ability to generate income.

Our proved oil and gas reserves are estimated using geological and engineering data to determine with reasonable certainty
whether the crude oil or natural gas in known reservoirs is recoverable under existing economic and operational conditions. The accuracy of proved reserves estimates depends on a number of factors, assumptions and variables, some of which are beyond
our control. Factors susceptible to our control include drilling, testing and production after the date the estimates are made, which may result in substantial revisions to reserves estimates; the quality of available geological, technical and
economic data used by us and our interpretation thereof; the production performance of our reservoirs and our recovery rates, both of which depend in significant part on available technologies as well as our ability to implement such technologies
and the relevant know-how; the selection of third parties with which we enter into business; and the accuracy of our estimates of initial hydrocarbons in place, which may prove to be incorrect or require substantial revisions. Factors mainly beyond
our control include changes in prevailing oil and natural gas prices, which could have an effect on the quantities of our proved reserves (since the estimates of reserves are calculated under economic conditions existing when such estimates are
made); changes in the prevailing tax rules, other government regulations and contractual conditions after the date estimates are made (which could make reserves no longer economically viable to exploit); and certain actions of third parties,
including the operators of fields in which we have an interest. See Item 4. Information on the CompanyOil and Gas Exploration and ProductionReserves.

As a result of the foregoing, reserves estimates are subject to revision. Any downward revision in our estimated quantities of proved reserves
could adversely impact our financial results by leading to increased depreciation, depletion and amortization or impairment charges, which would reduce earnings and shareholders equity.

Oil and gas activities are subject to significant economic, environmental and operational risks.

Oil and gas exploration and production activities are subject to particular economic and industry-specific operational risks, some of which
are beyond our control, such as production, equipment and transportation risks, as well as natural hazards and other uncertainties, including those relating to the physical characteristics of onshore and offshore oil or natural gas fields. Our
operations may be curtailed, delayed or cancelled due to bad weather conditions, mechanical difficulties, shortages or delays in the delivery of equipment, compliance with governmental requirements, fire, explosions, blow-outs, pipe failure,
abnormally pressured formations, and environmental hazards, such as oil spills, gas leaks, ruptures or discharges of toxic gases. If these risks materialize, we may suffer substantial operational losses or disruptions in our operations. Drilling may
be unprofitable, not only with respect to dry wells, but also with respect to wells that are productive but do not produce sufficient net revenues to return a profit after drilling, operating and other costs are taken into account.

We may not be able to replace our oil and gas reserves and this may have an adverse impact on our future results of operations and financial condition.

In recent years, we have experienced a decline in reserves and production (see Item 4. Information on the
CompanyBusiness OverviewReservesInternal Control over Proved Reserves). The possibility of replacing our crude oil and gas reserves in the future is dependent on our ability to access new reserves, both through successful
exploration and reserve acquisitions. We consider exploration, which carries inherent risks and uncertainties, to be our main vehicle for future growth and reserves replacement.

Without successful exploration activities or reserves acquisitions, our proved reserves would decline as our oil and gas production would be
forced to rely on our current portfolio of assets.

We cannot guarantee that our exploration, development and acquisition activities will
allow us to offset the decline of our reserves. If we are not able to successfully find, develop or acquire sufficient additional reserves, our reserves and therefore our production may continue to decline and, consequently, this may adversely
affect our future results of operations and financial condition.



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The Argentine government and provincial governments have intervened in the oil and gas industry in the
past, and are likely to continue to intervene.

The Argentine government has historically exercised significant influence over the
economy, including the energy sector, and companies such as us which operate in that sector have done so in a heavily regulated environment, aimed primarily at ensuring the satisfaction of domestic demand.

To address the Argentine crisis of 2001 and 2002, the Argentine Congress enacted the Public Emergency Law and other emergency regulations,
some of which remain in effect to date. Some of these regulations introduced a number of material changes to the regulatory framework applicable to the oil and gas industry in Argentina.

As of the date of this Annual Report, the Public Emergency Law is still in effect. In addition, the Argentine government continues to
introduce material changes to the regulatory regime applicable to the oil and gas industry, such as the suspension of the Petróleo Plus (Oil Plus) and Refinación Plus (Refining Plus) programs, and
the obligation to repatriate and sell in the local market 100% of the foreign currency revenues obtained from oil and gas exports.

On
April 17, 2012, the Argentine government submitted a bill to the Argentine Congress calling for the expropriation of 51% of the shares of YPF owned by Repsol YPF S.A. (Spain). Effective May 7, 2012, the Argentine Congress enacted Law
No. 26,741, sanctioning the expropriation of 51% of YPFs Class D shares, out of the shares then held by Repsol YPF S.A. (Spain), and 51% of Repsol YPF GAS S.A., represented by 60% of its Class A shares then held by Repsol Butano S.A.
(Spain).

Law No. 26,741 also defines the hydrocarbon activities (including the exploitation, industrialization, transportation and
commercialization thereof) in the territory of Argentina as of national public interest. On July 27, 2012, Decree No. 1,277/12 regulated various aspects of Law No. 26,741, specifically it (a) abrogated the sections of
Decree Nos. 1,055/89, 1,212/89 and 1,589/89 (the Deregulation Decrees) that established the right to freely market hydrocarbon products in the domestic and external markets, and the exemption from export withholdings;
(b) created the Comisión de Planificación y Coordinación Estratégica del Plan Nacional de Inversiones Hidrocarburíferas(Commission of Planning and Strategic Coordination of the National Hydrocarbon
Investments Plan, or the Commission), in charge of executing a National Hydrocarbon Investments Plan; (c) established the obligation for hydrocarbon companies to submit their technical, production and economic data to
the Commission, as well as their investment plans; and (d) granted broad powers to the Commission with the aim of monitoring the investment plans and ensuring reasonable commercial prices in the domestic market. See Item 4. Information on
the CompanyRegulation of Our Business. Similarly, in 2012, the governors of ten hydrocarbon-producing Argentine provinces signed the Acuerdo Federal de Hidrocarburos (Federal Hydrocarbons Accord), including among its principal
objectives to establish self-sufficiency in oil and gas supplies as a national policy.

In December 2015, the new administration, pursuant
to Decree No. 272/2015, which amended Decree No. 1,277/12, dissolved the Commission and transferred certain of the Commissions functions and duties to the Ministry of Energy and Mining. Through Decree No. 272/2015, the Ministry
of Energy and Mining is in charge of completing a comprehensive review of the rules relating to the registration and disclosure requirements applicable to companies operating in the oil and gas sector. However, until any changes in laws or
regulations are enacted, we are uncertain as to how any such changes may affect our business and results of operations. Changes made in connection with the Ministry of Energy and Minings review, or any further changes in the regulatory
framework, may have an adverse effect on the business, revenues and operations of companies operating in the Argentine oil and gas sector, including us.

We cannot assure that these or other measures that may be adopted by the Argentine government or provincial governments with respect to the
oil and gas industry will not have a material adverse effect on our business, financial condition or results of operations.

Limits on exports of
hydrocarbons and related oil products have affected and may continue to affect our results of operations.

In recent periods, the
Argentine government has introduced a series of measures limiting exports of hydrocarbons and related oil products, which have prevented us from profiting from higher prices on these commodities in the international markets, and materially affected
our competitiveness and results of operations.

In April 2004, to facilitate the recovery of natural gas prices, the Secretariat of Energy
(SE) entered into an agreement with natural gas producers, requiring them to sell a specified amount of gas in the local regulated market. During 2006, the SE required producers to redirect gas earmarked for export to supply local
thermal power plants and gas distribution companies. In January 2007, the SE confirmed that the ability to export hydrocarbons would be subject to the satisfaction of domestic demand and that exports would have to be authorized on a case-by-case
basis by the SE. These measures prevented us from benefiting from higher margins in the international markets. In 2007, upon the expiration of the aforementioned agreement, the Argentine government and producers signed a new agreement effective
until 2011 aimed at securing the domestic supply of gas. On January 5, 2012, the SE decided to extend the temporary allocation rules and other criteria established by Resolution No. 599/2007 to set obligations for the timely supply of
natural gas, as established under the agreement with natural gas producers in effect from 2007 through 2011 until new legislation is passed.



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Under these agreements, temporary limits on certain natural gas exports have been imposed to
avoid a crisis in the local supply of natural gas, depriving us of higher prices in the international markets.

Pursuant to SE Resolution
No. 1,679/04, since December 2004, producers must obtain the approval of the Argentine government prior to exporting crude oil or diesel. To obtain such approval, exporters must demonstrate that they have either satisfied local demand
requirements or have granted the domestic market the opportunity to acquire oil or diesel under terms similar to current domestic market prices and, in the case of diesel, they must also demonstrate, if applicable, that commercial terms offered to
the domestic market are at least equal to those offered to their own gas station network. Furthermore, in December 2006, through Resolution No. 1,338/06, the SE extended these regulations to the export of gasoline, fuel oil and fuel oil
mixtures, aero kerosene, jet fuel, lubricants, asphalts, coke and by-products for use in the petrochemical industry. In January 2008, the Argentine government temporarily prohibited exports of gasoline and diesel until the domestic market was fully
supplied at the prices in force on October 31, 2007.

These restrictions may significantly and adversely affect the profitability of
our operations, preventing us from capturing the upside of export prices, and negatively impacting the total volume of refined products sold in the domestic market, due to our need to manage crude oil volumes processed in accordance with our storage
capacity.

Notwithstanding the measures recently adopted by the new administration, we cannot assure that the Argentine government will
not increase export restrictions on hydrocarbons and related oil products, adversely affecting our financial condition and results of operations.

Export taxes and import regulations on our products have negatively affected, and may continue to negatively affect, the profitability of our
operations.

On March 1, 2002, the Argentine government imposed a withholding tax on exports of hydrocarbons, initially
lasting five years. The export tax was extended in 2006 by Law No. 26,217 and in 2011 by Law No. 26,732 and is in effect through 2015. This tax framework has prevented us from benefiting from significant increases in international prices
for oil, oil related products and natural gas, hindered us from offsetting sustained increases in costs related to the energy industry, and materially affected our competitiveness and results of operations. Effective November 2007, the Ministry of
Economy adopted a more onerous method for calculating withholding taxes on exports of crude oil and certain oil by-products. On January 3, 2013, withholding taxes on exports of crude oil were reduced, enabling a reduction of the gap between
local and export net prices. In October 2014, the withholding tax on hydrocarbon exports was modified, linking the rate (ranging from 10% to 13%) to a specific price schedule. Additionally, Resolution No. 1077/14 of the Ministry of Economy and
Public Finance became effective on January 1, 2015 providing that for so long as the international price of crude oil is less than U.S.$71 per barrel, the applicable withholding tax rate will be 1% and incremental tax rates will apply for so
long as the international price of crude oil is equal to or higher than U.S.$71 per barrel. See Item 5. Operating and Financial Review and ProspectsFactors Affecting Our Consolidated Results of OperationsRegulations of the Energy
Industry in ArgentinaWithholding Taxes on Exports.

In addition, in 2012, the Argentine government adopted an import procedure
pursuant to which local authorities must pre-approve any import of products and services to Argentina as a precondition to allow importers access to the foreign exchange market for the payment of such imported products and services. During 2012, the
European Union, the United States of America and Japan filed claims with the World Trade Organization (WTO) against certain import-related requirements maintained by Argentina. The WTO has found that those measures were not consistent with
Argentinas obligations under the WTO and requested their removal. On December 22, 2015, through Resolution No. 3,823, the Federal Public Revenue Agency (Agencia Federal de Ingresos Públicos, or AFIP) removed
the import license procedure in place since 2012, namely the Advance Import Affidavit (DJAI) system, and replaced it with the new Comprehensive Import Monitoring System (SIMI) intended to ease imports. Among other changes,
local authorities must now reply to any request for approval within ten days from the date on which the request is filed.

We cannot
assure that the Argentine government will not modify or maintain current export tax rates and import regulations. We cannot predict the impact that any changes may have on our results of operations and financial condition.

Limitations on local pricing in Argentina may adversely affect our results of operations.

In recent years, due to regulatory, economic and government policy factors, our domestic crude oil, gasoline, diesel and other fuel prices
have differed substantially from the prices for such products prevailing on the international and regional markets, and our ability to increase or maintain prices to adjust to international price or domestic cost variations has been limited.
International crude oil and related oil product prices have declined significantly since the second half of 2014. On December 31, 2015, the BRENT crude oil price fell below U.S.$38 per barrel, representing approximately a 28% decrease compared
to the 2015 average price of U.S.$ 52.30 per barrel.



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Domestic crude oil prices decreased by U.S.$7 per barrel in the first quarter of 2015 compared to
the price in effect as of December 31, 2014, and by an additional 10% in 2016, compared to the price in effect as of December 31, 2015, resulting in a price of U.S.$67.50 and U.S.$54.90 per barrel for Medanito and Escalante crude oil,
respectively. However, as of the date of this Annual Report, prices for domestic crude oil and refined products generally exceed the international prices for such products.

In addition, prices at which we sell natural gas in Argentina are subject to government regulations, including compensation schemes resulting
in increases in the revenues of companies such as us admitted to natural gas injection stimulus programs such as the Gas Program II (as defined below). See Item 4Information on the CompanyRegulation of Our BusinessArgentine
Regulatory FrameworkAdjustment of Natural Gas Price at Wellhead.

Furthermore, the Argentine government sets the tariffs for
compensation of generation companies (affecting the Genelba Combined Cycle and Pichi Picún Leufú Hidroelectric Complex operations) in the spot market in Argentine pesos See Item 4Information on the CompanyRegulation
of Our BusinessArgentine Regulatory FrameworkElectricity.

For additional information on domestic pricing for our
products, see Item 5. Operating and Financial Review and ProspectsFactors Affecting our Consolidated Results of OperationsRegulation of the Energy Industry in Argentina and Item 4. Information on the
CompanyRegulation of Our BusinessArgentine Regulatory Framework.

We cannot assure that we will be able to maintain or
increase the domestic prices of our products, and limitations on our ability to do so would adversely affect our financial condition and results of operations. Similarly, we cannot assure that hydrocarbon prices in Argentina will track increases or
decreases in hydrocarbon prices in the international or regional markets. Discrepancies between domestic and international prices may adversely affect our financial condition and results of operations.

Oil and gas prices could affect our level of capital expenditures.

The prices that we are able to obtain for our hydrocarbon products affect the viability of investments in new exploration, development and
refining activities, and as a result, the timing and amount of our projected capital expenditures for such purposes. We budget capital expenditures by taking into account, among other things, market prices for our hydrocarbon products. In the event
that current domestic prices decrease, our ability to improve our hydrocarbon recovery rates, identify new reserves and carry out certain of our other capital expenditure plans is likely to be affected, which, in turn, could have an adverse effect
on our results of operations.

The Argentine government and our associated utility company are in the process of renegotiating utility contracts,
and the recoverability of our investments in such associate depends on the successful completion of these negotiations.

The
macroeconomic situation of the country after the enactment of the Public Emergency Law in 2002 impacted the economic and financial condition of utility companies in Argentina. The combined effect of (i) the devaluation of the peso in 2002,
(ii) the government decision to freeze rates in pesos without reflecting the impact of the devaluation, and (iii) financial debts primarily denominated in foreign currency, adversely affected the utility companies financial
condition, results of operations and their ability to satisfy financial obligations and pay dividends. Although some of these utility companies have been successful in restructuring their indebtedness, their return to financial stability and
profitability on a long-term basis depends on a successful negotiation of tariff increases with the Argentine government. Transportadora de Gas del Sur S.A. (TGS) has engaged in negotiations with the Utilities Contract Renegotiation and
Analysis Committee (Unidad de Renegociación y Análisis de Contratos de Servicios Públicos, or the UNIREN) and obtained transitional adjustments of prices and tariffs that were necessary to ensure the
continuity of the normal provision of its services. On February 16, 2016, the new administration, through Decree No. 367/16, dissolved the UNIREN and transferred the responsibility of renegotiating public service agreements to the
ministries with jurisdiction over the relevant activity (in the case of TGS, the Ministry of Energy and Mining) acting jointly with the Ministry of Economy and Public Finance. Pursuant to Resolution No. 31/16 of the Ministry of Energy and
Mining, TGS and the ENARGAS are expected to conclude the renegotiation process within twelve months following the issuance of Resolution No. 3,724/16, on March 31, 2016. As of the date of this Annual Report, these discussions have not
resulted in tariff increases sufficient for our associated utility companys regulated segment to return to financial stability and profitability. See Item 4. Information on the CompanyGas and EnergyGas
TransportationTGSTariff Renegotiation Process, and Item 4Regulation of Our BusinessArgentine Regulatory FrameworkNatural Gas and Electricity.

Developments affecting our controlling shareholder may have an adverse effect on our operations.

Beginning in 2014, and over the course of 2015, the Brazilian Federal Prosecutors Office investigated irregularities involving Petrobras
contractors and suppliers and uncovered a broad payment scheme that involved a wide range of participants, including former Petrobras personnel. Based on the information available to Petrobras, the payment scheme involved a group of companies that,
between 2004 and April 2012, colluded to obtain contracts with Petrobras, overcharging Petrobras under those contracts and using the overpayment received under the contracts to fund improper payments to political parties, elected officials or other
public officials, individual contractor personnel, former Petrobras personnel and other individuals involved in the payment scheme. In addition to the payment scheme, the investigations identified several specific instances of other contractors and
suppliers that allegedly overcharged Petrobras and used the overpayment received from their contracts with Petrobras to fund improper payments, unrelated to the payment scheme, to certain former Petrobras personnel.



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Although Brazilian authorities have publicly described Petrobras as a victim of the alleged
illegal conduct identified during the above-mentioned investigations, we cannot predict the overall effects of the ongoing investigation, which could have an adverse effect on our business, financial condition or results of operations.

Ongoing internal investigation could affect our business and/or our results of operations.

In response to certain testimony from a former senior Petrobras officer in connection with Brazilian criminal investigations, our board of
directors (the Board of Directors) has initiated an independent internal investigation process through external specialized law firms. Additionally, a Monitoring Committee was created to oversee the investigation.

As of the date of this Annual Report, the investigation is ongoing but it has not revealed any findings that would result in adjustments
and/or additional disclosures to our Audited Consolidated Financial Statements. However, we cannot predict the effects of the ongoing investigation, which could affect our business and/or our results of operations.

Our activities may be adversely affected by events in other countries in which we do business, particularly in Venezuela.

Our operations are concentrated in Latin America, a region that has experienced significant economic, social, political and regulatory
volatility. In recent periods, many governments in Latin America have taken steps to assert greater control or increase their share of revenues from the energy sector, spurred by soaring oil and gas prices and nationalist policies. See Item 4.
Information on the CompanyRegulation of Our BusinessesVenezuelan Regulatory Framework and Bolivian Regulatory Framework.

These risks are evidenced by changes in business conditions that we have experienced in Venezuela, Bolivia and Ecuador. See Item 5.
Operating and Financial Review and ProspectsFactors Affecting our Consolidated Results of Operations and Item 4. Information on the CompanyOil and Gas Exploration and ProductionProductionProduction Outside
Argentina.

Regarding our investments in mixed companies in Venezuela, the monetary and fiscal policies implemented by the
Venezuelan government together with the significant drop in international oil prices since 2014 have eroded the ability of the mixed companies to efficiently operate the producing fields, creating greater uncertainty as to the risks of our
investments in Venezuela.

The level of government intervention in the economy of Latin American countries has adversely affected our
business and results of operations, including, by changing the terms and conditions of operating service agreements in Venezuela and by increasing tax rates. We cannot assure that such intervention will not continue or increase, further adversely
affecting our business, results of operations and financial condition.

We could be subject to organized labor action.

Many of our operations are highly labor-intensive and require a significant number of workers. The sectors in which we operate are largely
unionized. We have experienced organized work disruptions and stoppages in the past, frequently due to strikes by employees of contractors we employ. We cannot assure that we will not experience such disruptions or work stoppages in the future, and
any such action could adversely affect our business and revenues.

During 2010, to a lesser extent, 2011 and 2012, gas production in the
Austral Basin was affected by labor strikes. Between March and June 2013, we experienced trade union conflicts at the Zárate Plant. During 2014 and 2015, trade union conflicts did not significantly affect our operations and were mostly
related to industry-wide actions.

We do not maintain insurance coverage for business interruptions, including business interruptions
caused by labor actions. Strikes or other types of conflict with the unionized personnel may adversely affect our results of operations and financial condition.

Our operations could cause environmental damage, and any changes in environmental laws or regulations may increase our operational costs.

Some of our operations are exposed to environmental risks that may arise unexpectedly and result in material adverse effects on our results of
operations and financial condition. In addition, the occurrence of any of these risks could result in personal injuries, loss of life, environmental damage, clean-up and repair expenses, equipment damage and liability in civil and administrative
proceedings. We cannot assure that we will not incur additional costs related to the environment in the future, which could negatively impact our results of operations and financial condition. In addition, we cannot assure that the insurance
coverage that we maintain is adequate to cover the losses that may potentially arise from these environmental risks.



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Furthermore, we are subject to extensive environmental laws and regulations both in Argentina and
in the other countries in which we operate. Local, provincial and national authorities in Argentina and other countries where we operate may implement new environmental laws and regulations, and are moving towards more stringent enforcement of
existing environmental laws and regulations, both of which may require us to incur higher compliance costs. For example, various initiatives in regions outside of Argentina have been made or proposed to regulate hydraulic fracturing processes (which
involve injecting water, sand and small volumes of chemicals into a wellbore to fracture hydrocarbon-bearing rock thousands of feet below the surface to facilitate higher flow of hydrocarbons into the wellbore), and drilling activities for
non-conventional oil and gas reserves. The imposition of stringent regulatory and permitting requirements related to these practices in Argentina could significantly increase our cost of doing business.

We cannot predict the overall effects of the implementation of new environmental laws and regulations and/or the more stringent enforcement of
existing environmental laws and regulations on our financial condition and results of operations.

Oil and gas activity has become increasingly
dependent on digital technologies to conduct operations, including certain exploration, development and production activities.

Our technologies, systems, networks, and those of our business partners may become the target of cyber-attacks or information security
breaches that could result in the unauthorized release, misuse or loss of confidential information, or other disruption of our business operations. In addition, certain cyber incidents, such as surveillance, may remain undetected for an extended
period. We depend on digital technology, including information systems to process financial and operating data, analyze seismic and drilling information and oil and gas reserves estimates. Although we have not experienced any material loss related
to cyberattacks, there can be no assurance that we will not be the target of cyberattacks in the future that could adversely affect our operations or financial condition. As cyber threats continue to evolve, we may be required to incur additional
expenses to enhance our protective measures or to remediate any information security vulnerability.

If a change of control occurs, we may not have
the ability to raise the funds necessary to finance the offer to repurchase as required by our Series S Notes or to replace or collateralize guarantees.

As of the date of this Annual Report, approximately U.S.$300 million of our financial debt is represented by our Series S Notes. Under the
supplemental indenture for the Series S Notes, if a change of control occurs, we must offer to repurchase any and all such notes that are outstanding at a purchase price equal to 101% of the aggregate principal amount of such notes, plus any accrued
and unpaid interest thereon and additional amounts, if any, through the purchase date. We may not have sufficient funds available to make the required repurchases of the Series S Notes upon a change of control.

If we fail to repurchase (or cause to repurchase) our Series S Notes in circumstances that may constitute an event of default under the
supplemental indenture, which may in turn trigger cross-default provisions in other of our debt instruments then outstanding, our results of operations could be adversely affected and the market value of our shares and ADSs could decline.

In connection with other instruments to which we are a party, certain banking institutions have issued guarantees at our request in favor of
third parties and we could be required to replace or to collateralize them with a cash deposit in case of a change of control, which could adversely affect our business. Additionally, if we fail to replace or collateralize such guarantees, which may
in turn trigger cross-default provisions in other of our debt instruments then outstanding, certain amounts may become immediately due and our business could be adversely affected. See Item 4. Information on the CompanyHistory and
DevelopmentNegotiations for the disposition of controlling interest by our controlling shareholder.

Risks Relating to Our Shares, ADSs and
Series S Notes

Our principal shareholders can exercise control over the Company.

As of the date of this Annual Report, Petrobras holds 67.2% of our capital stock and voting rights and the ANSES holds approximately 11.8% of
our shares and voting rights. Petrobras is able to determine or exercise significant influence on substantially all matters requiring approval by a majority of our shareholders, including the election of a majority of our directors. Petrobras also
directs our operations and may be able to cause or prevent a change in our control. See Item 4. Information on the CompanyHistory and DevelopmentNegotiations for the disposition of controlling interest by our controlling
shareholder.

We cannot assure that the interests of our principal shareholders will not diverge from interests of our other
investors. See Item 7. Major Shareholders and Related Party Transactions



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Restrictions on capital outflows imposed by Argentina may impair your ability to receive dividends and
distributions on, and the proceeds of any sale of, the shares underlying the ADSs.

In the past, and as recently as 2015, the
Argentine government imposed restrictions on capital movements in circumstances where a serious imbalance develops in Argentinas balance of payments or where there are reasons to foresee such an imbalance. We cannot assure that the Argentine
government will not impose restrictions on capital outflows and/or foreign exchange which could impair or prevent the conversion of dividends, distributions, or the proceeds from any sale of shares, as the case may be, from pesos into U.S. dollars
and the remittance of the U.S. dollars abroad.

Under the terms of our Deposit Agreement with the depositary for the ADSs, the depositary
will convert any cash dividend or other cash distribution we pay on the shares underlying the ADSs into U.S. dollars if, in the judgment of the depositary, that conversion can be made on a practicable basis, and shall distribute such U.S. dollars in
accordance with the Deposit Agreement, subject, in each case, to any restrictions under Argentine laws or regulations or applicable permits issued by an Argentine governmental body. If the exchange rate fluctuates significantly during a time when
the depositary cannot convert the foreign currency, you may lose some or all of the value of the dividend distribution.

Under Argentine law,
shareholder rights may be different from those in other jurisdictions.

Our corporate affairs are governed by our bylaws and Law
No. 19,550 (the Argentine Companies Law), which differ from the legal principles that would apply if we were incorporated in a jurisdiction in the United States or in other jurisdictions outside Argentina. In addition, rules
governing the Argentine securities markets are different and may be subject to different enforcement in Argentina than in other jurisdictions.

Sales of a substantial number of shares could decrease the market prices of our shares and the ADSs.

Petrobras owns shares representing a significant majority of our capital stock. Sales of a substantial number of shares or ADSs by Petrobras,
the ANSES, or any other future significant shareholder, or the anticipation of such sales, could decrease the trading price of our shares and ADSs.

You may be unable to exercise preemptive, accretion or other rights with respect to the shares underlying your ADSs.

You may not be able to exercise the preemptive or accretion rights relating to the shares underlying your ADSs (see Item 10. Additional
InformationPreemptive Rights) unless a registration statement under the U.S. Securities Act of 1933 (the Securities Act) is made effective with respect to those rights or an exemption from the registration requirements of the
Securities Act is available. We are not obligated to file a registration statement with respect to the shares relating to these preemptive rights, and we cannot assure that we will file any such registration statement. Unless we file a registration
statement or an exemption from registration is available, you may receive only the net proceeds from the sale of your preemptive rights by the depositary or, if the preemptive rights cannot be sold, they will be allowed to lapse. As a result, U.S.
holders of our shares or ADSs may suffer dilution of their interest in the Company upon future capital increases.

In addition, under the
Argentine Companies Law, foreign companies that own shares in an Argentine corporation are required to register with the Inspección General de Justicia (Superintendency of Legal Entities, or the IGJ) in order to exercise
certain shareholder rights, including voting rights. If you own our shares directly (rather than in the form of ADSs), are a non-Argentine company and fail to register with the IGJ, your ability to exercise your rights as a holder of our shares may
be limited.

You may be unable to exercise voting rights with respect to the shares underlying your ADSs at our shareholders meetings.

The depositary will be treated by us for all purposes as the shareholder with respect to the shares underlying your ADSs. As a
holder of American Depositary Receipts (ADRs) representing the ADSs being held by the depositary in your name, you will not have direct shareholder rights and may exercise voting rights with respect to the shares represented by the ADSs
only in accordance with the Deposit Agreement relating to the ADSs. There are no provisions under Argentine law or under our bylaws that limit the exercise by ADS holders of their voting rights through the depositary with respect to the underlying
shares. However, there are practical limitations on the ability of ADS holders to exercise their voting rights due to the additional procedural steps involved in communicating with these holders. ADS holders may be unable to exercise voting rights
with respect to the shares underlying the ADSs as a result of these practical limitations.

Shareholders outside Argentina may face additional
investment risk from currency exchange rate fluctuations in connection with their holding of our shares or ADSs.

We are an
Argentine company and any future payments of dividends on our shares will be denominated in pesos. The peso has historically fluctuated significantly against many major world currencies, including the U.S. dollar. A depreciation of the peso would
likely adversely affect the U.S. dollar or other currency equivalent of any dividends paid on our shares and could result in a decline in the value of our shares and ADSs as measured in U.S. dollars.



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Developments related to our controlling shareholder may have an effect on the rating of our Series S Notes.

Our Series S Notes are subject to a standby purchase agreement with our controlling shareholder, Petrobras, whereby Petrobras
would be obligated to purchase noteholders rights to receive payments if we were to default on the payment of any amounts owed under those Notes. Moodys Investors Service downgraded Petrobrass global foreign currency debt
rating and, consequently, Moodys Latin America Agente de Calificación de Riesgo (Moodys Agent for Risk Ratings in Latin America) downgraded the global scale rating on our Series S Notes from Ba2 to Baa3. The ratings
for Petrobrass global debt, and our Series S Notes have been further downgraded. Standard & Poors downgraded Petrobrass global foreign currency debt rating and, consequently, downgraded the global scale rating on our
Series S Notes from BB to B+.

A decrease in access to financing sources or access to the capital markets may have an adverse impact on
our financial condition. There can be no assurance that Petrobrass or our ratings will not be downgraded any further. Future downgrades or changes in outlook could adversely affect Petrobrass and our shares value. See
Developments affecting our controlling shareholder may have an adverse effect on our operations.



|Item 4. | INFORMATION ON THE COMPANY
|------- | --------------------------

HISTORY AND DEVELOPMENT

History

Petrobras Argentina S.A.

PESA is a corporation (sociedad anónima) organized and existing under the laws of Argentina and registered on November 17,
1947 with the Public Registry of Commerce, under No. 759, page 569, Book 47, Volume A, with a term of duration expiring June 18, 2046. Our principal place of business is located at Maipú 1, (C1084ABA), Buenos Aires, Argentina.
Telephone: 54-11-4344-6000, fax 54-11-4344-6315 and our web site is www.petrobras.com.ar. Our process agent in the United States for certain contracts is CT Corporation System, located at 111 Eighth Avenue, New York, New York 10011. Our
authorized representative in the United States for our registration statement with the SEC is Puglisi Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711.

We are an integrated energy company,engaged in oil and gas exploration and production, refining, petrochemicals, electricity
generation and transmission, and hydrocarbon marketing and transportation. As of December 31, 2015, we maintained operations primarily in Argentina, and to a lesser extent in Bolivia, Ecuador and Venezuela. Our operations are currently divided
into four business segments that are in turn supported by corporate functions. The four business segments are: (1) Oil and Gas Exploration and Production, (2) Gas and Energy, (3) Refining and Distribution, and (4) Petrochemicals.

PESA was founded in 1946 by the Pérez Companc family as a shipping company under the name Compañía Naviera
Pérez Companc. In the mid-1950s, the Company began its forestry operations when it acquired an important forestry area in northeastern Argentina. In the 1960s, it began servicing oil wells and, over time, its maritime operations were
gradually discontinued and replaced by oil-related activities.

The development of our oil and gas business is marked by two significant
events. The first occurred in 1991 when we were awarded concessions to operate Puesto Hernández, one of the most important oil fields in Argentina in terms of reserves and production, located in the provinces of Neuquén and Mendoza,
and the Faro Vírgenes and Santa Cruz areas in the Austral Basin, located in the Province of Santa Cruz. As a result of these concessions, we have become one of the largest oil and gas producers in Argentina.

The second event that was a key factor in our oil and gas operations growth occurred in March 1994, when PESA was awarded the Oritupano-Leona
area in Venezuela. This was the first step towards a significant regional expansion of our businesses.

Between 1990 and 1994, many
state-owned enterprises were privatized in Argentina. As a result, PESA acquired interests in companies operating in the natural gas transportation and distribution, electricity generation, transmission and distribution, oil transportation, storage
and shipment and refining sectors. These activities have formed our core business since that time.

PESA has in the past conducted
operations in other industries, including construction, real estate, telecommunications, mining and agriculture. Beginning in 1997, and through successive divestments, PESA restructured its business strategy with a focus on the energy sector in
Argentina. As a result of these divestitures and the development of our energy businesses, PESA has become a vertically-integrated energy company whose operations are mainly located in Argentina.



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Corporate reorganization of PESA and PEPSA

On September 2, 2008, the respective boards of directors of PESA and PEPSA each approved a preliminary agreement for the merger of the
companies through the absorption of PEPSA by PESA. The effective merger date was set as January 1, 2009. As of that date, all assets, liabilities, rights and obligations of the absorbed company were incorporated into PESA. Immediately following
the merger, Petrobras continued holding 67.2% of the outstanding shares of PESA.

On January 30, 2009, the respective special
shareholders meetings of PESA and PEPSA approved the merger of the companies, pursuant to which PEPSA was merged and absorbed into PESA, as surviving company. The respective boards of directors of PESA and PEPSA each approved the merger
agreement between the two companies on April 14, 2009. This reorganization was authorized by Resolution No. 16,131 and subsequently registered with the IGJ.

As a result of such corporate reorganization, shareholders of PEPSA received shares of PESA (in the United States, in the form of ADSs), and
the ADSs of PEPSA were removed from listing on the NYSE and from registration with the SEC. Immediately subsequent to this exchange of shares, our ADSs, each representing 10 Class B shares of PESA, were listed and began trading on the NYSE.

Change of corporate name

On March 27, 2009, the general regular and special shareholders meeting of PESA approved the change of the Companys corporate
name to Petrobras Argentina S.A., which became effective on July 19, 2010, at which time the CNV notified PESA of the registration of the change of its corporate name with the IGJ.

Negotiations for the disposition of controlling interest by our controlling shareholder

On January 20, 2016, Petrobras announced that it had initiated negotiations for the sale of its controlling stake in the Company. On
March 2, 2016, Petrobras made public that its executive board had approved to conduct exclusive negotiations with Pampa Energía S.A. (an integrated electricity company in Argentina) for 30 days, which could be extended for another 30
days. On April 8, 2016, Petrobras informed that negotiations with Pampa Energía S.A. for the sale of its controlling stake in the Company were to continue for 30 days.

In each of its press releases related to the potential sale of its controlling interest, Petrobras has stated that the terms and conditions of
any sale of its controlling interest in the Company would be subject to approval by its executive board and its board of directors, as well as by the relevant regulatory entities.

Capital Expenditures and Divestitures

For a description of our capital expenditures see Item 5. Operating and Financial Review and ProspectsLiquidity and Capital
Resources.

For a description of our most significant recent divestitures, see Item 4. Information on the CompanyOil and
Gas Exploration and ProductionProductionProduction Outside ArgentinaEcuador, Item 5. Operating and Financial Review and ProspectsFactors Affecting Our Consolidated Results of OperationsDivestment of
Distrilec.

BUSINESS OVERVIEW

Our Strategy

We are a leading energy
company in Argentina focused on maintaining profitability and meeting our social and environmental responsibility goals.

In furtherance
of these objectives, we:



| |  |  | Set our focus on our Argentine operations.
| | - |  | ------------------------------------------



| |  |  | Seek to develop proven oil and gas reserves.
| | - |  | --------------------------------------------



| |  |  | Seek profitability in the downstream business in Argentina, through a balanced crude oil refining, logistics and commercial chain.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increase profitability in the Gas and Energy segment.
| | - |  | -----------------------------------------------------



| |  |  | Maintain our position in styrenics markets.
| | - |  | -------------------------------------------



| |  |  | Maintain financial solvency, while pursuing operating and management efficiency and the development of human resources.
| | - |  | -----------------------------------------------------------------------------------------------------------------------



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In order to fulfill this strategy, we consider the following to be essential:



| |  |  | A commitment to protecting the quality of our goods and services, the environment and the health and safety of our employees, contractors and neighboring communities.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The adoption of, and compliance with, corporate governance practices consistent with recognized best practices.
| | - |  | ---------------------------------------------------------------------------------------------------------------



| |  |  | The maintenance of a management style that favors communication and teamwork, fostered by the value of the people that work in our organization.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The development of new business opportunities in order to maximize potential synergies and capitalize on complementary business opportunities with Petrobras.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

We currently manage our activities, with the support of a corporate center, in four business segments: (1) Oil and Gas Exploration and
Production, (2) Gas and Energy, (3) Refining and Distribution, and (4) Petrochemicals.

Our Principal Market

PESA is an Argentine sociedad anónima. As of December 31, 2015, approximately 81% of our total assets, 99% of our sales, 92%
of our combined crude oil and gas production and 90% of our proved oil and gas reserves were located in Argentina. Fluctuations in the Argentine economy and actions adopted by the Argentine government have had and may continue to have a significant
effect on Argentine private sector entities, including us. Specifically, we have been affected and may in the future be affected by inflation, interest rates, fluctuations in the value of the peso against foreign currencies, price and export
controls on crude oil and related products, business regulations, changes in tax regulations and in general by the political, social and economic environment affecting Argentina and other countries. See Item 3. Key InformationRisk
FactorsFactors Relating to Argentina.

The Argentine economy has experienced significant volatility in recent decades,
characterized by periods of low or negative growth, high and variable levels of inflation and currency devaluation. See Item 3. Key InformationRisk FactorsRisks Relating to ArgentinaEconomic and political instability in
Argentina has affected and may continue to affect our financial condition and results of operations. To address such pressures, the Argentine government has implemented from time to time various plans and introduced a number of exchange rate
systems and controls. See Item 3. Key InformationRisk FactorsRisks Relating to ArgentinaGovernment intervention in the Argentine economy could adversely affect our results of operations or financial condition.

According to the Ministry of Economy, the primary surplus was 0.2% in 2011, and primary budget deficits of 0.2%, 0.7%, 0.9% and approximately
2.0% of GDP were recorded in 2012, 2013, 2014 and 2015, respectively.

Argentina has suffered inflationary pressures since 2007, evidenced
by continued increases in fuel, energy and food prices, among other indicators. According to inflation data published by the INDEC, from 2011 to 2014, the Argentine CPI increased 9.5%, 10.8%, 10.9% and 24.0% in each of those years, respectively, and
11.9% in the ten-month period ended October 31, 2015. The WPI increased 12.7%, 13.1%, 14.8% and 28.3% in each of those years, respectively, and 10.6% in the ten-month period ended October 31, 2015. In November 2015, the INDEC suspended the
publication of the CPI and the WPI. From 2007 through 2015, the INDEC experienced a process of institutional and methodological reforms that gave rise to controversy with respect to the reliability of the information that it produces, including
inflation, GDP and unemployment data. Reports published by the IMF stated that their staff used alternative measures of inflation for macroeconomic surveillance, including data produced by private sources, which have shown inflation rates
considerably higher than those published by the INDEC since 2007. The IMF also censured Argentina in 2013 for failing to make sufficient progress in adopting remedial measures to address the quality of official data, including inflation and GDP
data. On February 13, 2014, the INDEC released the IPCNu which measures prices on goods across the country and replaced the previous index that only measured inflation in the urban sprawl of the City of Buenos Aires. Even though the IPCNu
brought inflation statistics closer to those estimated by private sources, differences between official inflation data and private estimates remained at the end of 2015. Since the first weeks after assuming office on December 10, 2015, the new
administration has introduced economic and policy reforms. See Item 3. Key InformationRisk FactorsFactors Relating to ArgentinaThe impact of the recent congressional and presidential elections on the future economic and
political environment of Argentina is uncertain. In addition, the Argentine government has restarted negotiations with holdout creditors from the last Argentine debt restructuring. See Item 3. Key InformationRisk
FactorsFactors Relating to ArgentinaA lack of financing for Argentine companies, whether due to market forces, government regulation or the unresolved litigation with holdout bondholders, may negatively impact our financial condition or
cash flows.

In January 2016, the new administration, through Decree No. 55/2016, declared a state of administrative emergency
in the national statistics system, and the new INDEC authorities announced the discontinuation of the methodology previously used to measure inflation and suspended the publication of all indices until the INDEC is in a position to calculate such
indices based on adequate and reliable official data. The INDEC has suggested using CPI figures published by the Province of San Luis and the City of Buenos Aires for reference in the meantime. According to the Province of San Luis reports,
the inflation rate was 2.9%, 6.5%, 4.2%, 2.7% and 3.0%, in November 2015, December 2015, January 2016, February 2016 and March 2016, respectively. According to the City of Buenos Aires reports, the inflation rate was 2.0%, 3.9%,
4.1%, 4.0% and 3.3%, in November 2015, December 2015, January 2016, February 2016 and March 2016, respectively.



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In 2011, the Argentine economy grew with respect to 2010, with a further increase in real GDP of
8.4%. A large increase in public expenditures and extension of credit facilities, as well as a good harvest and high international prices, positively impacted internal demand. Financial intermediation, trade and investment in construction were some
of the most dynamic sectors. This increase in activity levels resulted in another large increase in imports (approximately 30%), which was partially offset by a 25% increase in exports; thus, the trade balance recorded a U.S.$9 billion surplus for
the year. Energy imports grew substantially during 2011, resulting in a negative energy trade balance of U.S.$2.8 billion. Despite the trade surplus, the foreign exchange supply was reduced due to lower inflow of funds from loans and direct foreign
investment and, primarily, increasing capital outflows as a consequence of portfolio dollarization. The Argentine government continued using free available reserves to pay for its foreign debt maturities and the Central Banks reserves dropped
by U.S.$5.8 billion, to approximately U.S.$46.3 billion. The exchange rate averaged Ps.4.13 per U.S.$1.00 in 2011, and closed the year at Ps.4.30 per U.S.$1.00, 8% higher compared to the previous year-end. Interest rates showed a significant
increase, especially during the last quarter. Finally, Argentine country risk reached an annual average of 676 basis points, growing substantially from August 2011 onward, reaching 927 basis points as of December 31, 2011.

In 2012, growth in the Argentine economy diminished as compared to 2011, registering a GDP increase of 0.8% according to the INDEC, as a
result of domestic and global factors including the European debt crisis, the slowdown of emerging economies, and the effects of a short drought period and a subsequent flood period. Domestic demand was the main factor contributing to the positive
variation in GDP. Exports fell 3% compared to the previous year, mainly due to the above-mentioned global factors, while imports declined 7%, resulting in a trade surplus of over U.S.$12 billion. Despite such trade surplus, the Central Banks
reserves closed the year at U.S.$43.1 billion, a decrease of approximately U.S.$3 million compared to 2011, as a consequence of the use by the Argentine government of the Central Banks reserves to honor sovereign foreign debt commitments.

During 2012, the Central Bank continued implementing an expansive monetary policy while tightening exchange controls. The exchange rate
closed at Ps.4.91 per U.S.$1.00 by the end of the year, representing a 14% year-on-year depreciation of the peso.

The Argentine
country risk premium located slightly below 1,000 basis points as of the end of the year. On March 22, 2012, the Argentine Congress enacted Law No. 26,739, which amended the charter of the Central Bank and the Convertibility Law. This new
law amended the objectives of the Central Bank (established in its charter) and removed certain provisions previously in force. Pursuant to the terms of the new law, the Central Bank focuses on promoting monetary and financial stability as well as
development with social equity. In addition, the concept of freely available reserves was eliminated, granting the Argentine government access to additional reserves to pay debt. In addition, since late 2011, the Argentine government has
also adopted numerous measures to control directly or indirectly foreign trade and foreign exchange markets.

In 2013, real GDP registered
an increase of 2.9% according to the INDEC, mainly as a result of the favorable performance of the agricultural sector. Industrial activity, on the other hand, slightly decreased compared to 2012, with the automotive industry being one of few
sectors with positive variations. The trade balance resulted in a surplus of U.S.$1.5 billion, a decrease of approximately U.S.$10 billion compared to 2012. The Central Banks reserves closed 2013 at U.S.$30.6 billion, accounting for a
cumulative decline of U.S.$12.5 billion from December 31, 2012. The Peso/U.S. dollar exchange rate closed at Ps.6.49 per U.S.$1.00.

In 2014, the Argentine economy recorded a substantial slowdown, reporting a 0.5% growth in real GDP according to the INDEC. Industrial
activity decreased by 2.5% compared to 2013. The trade balance resulted in a surplus of U.S.$3 billion, representing a 104% increase compared to 2013, with decreasing imports and exports and a negative energy trade balance of U.S.$6.5 billion. The
Central Banks reserves increased by approximately U.S.$1 billion, reversing a three-year decline trend. Despite efforts of the Central Bank, interest rates that had increased in the early months of 2014, stood at approximately 20% at the end
of the year. The Peso/U.S. dollar exchange rate rose 31% in 2014 compared to 2013, including a depreciation of approximately 24% in January 2014, closing at Ps. 8.55 per U.S.$1.00 at December 31, 2014. Argentine country risk reached an
annual average of 780 basis points.

In 2015, the Argentine economy recorded a 2.1% growth in real GDP (based on preliminary GDP data
published by the INDEC), mainly as a result of a 6.4% growth in the agricultural segment and a 5.0% growth in the construction segment. The trade balance resulted in a deficit of U.S.$3 billion, after fifteen consecutive years of positive trade
balance. The Central Banks reserves decreased by approximately U.S.$5.9 billion, from U.S.$31.4 billion at December 31, 2014 to U.S.$25.6 billion at December 31, 2015. In 2015, the peso lost approximately 52% of its value against the
U.S. dollar, including a depreciation of approximately 35% mainly experienced after December 17, 2015 following the announcement of the lifting of a most foreign exchange controls. See Item 3. Key InformationRisk
FactorsFactors Relating to ArgentinaThe impact of the recent congressional and presidential elections on the future economic and political environment of Argentina is uncertain, and Item 3. Key InformationExchange
Controls, and Item 3. Key InformationRisk FactorsFactors Relating to ArgentinaEconomic and political instability in Argentina has affected and may continue to adversely affect our financial condition and results of
operations.



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##### Table of Contents

OIL AND GAS EXPLORATION AND PRODUCTION

Overview

The core of our operations is
the Oil and Gas Exploration and Production business segment, as this is a key link in our business chain. This business segments strategy is to develop profitable oil and gas reserves with a commitment to social and environmental
responsibility. This strategy is focused on three main initiatives:



| |  |  | Exploration for reserve replacement;
| | - |  | ------------------------------------



| |  |  | Optimization of operations and existing infrastructure as leverage for new projects; and
| | - |  | ----------------------------------------------------------------------------------------



| |  |  | Development and monetization of non-conventional gas reserves.
| | - |  | --------------------------------------------------------------

The integration of our Oil and
Gas Exploration and Production business segment with our Refining and Distribution business segment enables us to process a large part of our crude oil production in Argentina. In addition, in Argentina our Oil and Gas Exploration and Production
business segment supplies gas to our Petrochemical, Refining and Energy operations.

As of December 31, 2015, we participated in oil
and gas exploration and production activities in Argentina and in other Latin American countries, including Venezuela (through our equity interest in mixed companies (empresas mixtas)) and Bolivia.

As of December 31, 2015, our combined crude oil and natural gas proved reserves, including our share of the reserves of our
unconsolidated investees, were estimated at 183.1 million barrels of oil equivalent (MMboe) (compared to 210.6 MMboe as of December 31, 2014), approximately 59% of which were proved developed reserves and approximately 41% of
which were proved undeveloped reserves. Crude oil accounted for approximately 37% of our combined proved reserves, while natural gas accounted for approximately 63%. As of December 31, 2015, 90% of our total combined proved reserves were
located in Argentina and 10% were located abroad.

During 2015, our combined oil and gas production in Argentina averaged 68,200 barrels
of oil equivalent per day, including unconsolidated investees. Our total oil and gas production for this period, including our share in the production of unconsolidated investees, averaged 74,300 barrels of oil equivalent per day (compared to 87,200
barrels of oil equivalent per day in 2014). Crude oil accounted for approximately 35,942 barrels per day, while natural gas accounted for approximately 230.2 million cubic feet per day (MMcf/d), or 38,361 barrels of oil equivalent
per day based on a measure of conversion of 6,000 cubic feet of gas per barrel of oil equivalent. Approximately 89% of our oil production and 94% of our gas production during 2015 were derived from our operations in Argentina.

On May 31, 2012, we agreed to acquire an additional 39.671% equity interest in Petrolera Entre Lomas S.A. (PELSA) from our
controlling company Petrobras Participaciones S.L. (PPSL) for U.S.$249.4 million, increasing our share in PELSA to 58.881%. See Item 7. Major Shareholders and Related Party TransactionsRelated Party
TransactionsAcquisition of Companies. PELSA performs oil and gas exploration and production activities in Argentina, and the remaining shares of PELSA are owned by APCO Oil and Gas International Inc. Sucursal Argentina
(APCO). As of December 31, 2015, PELSA owned four concessions in oil and gas production areas in Argentina, of which the Entre Lomas field (in the Provinces of Neuquén and Río Negro) was the most important. On
August 6, 2015, the Province of Río Negro granted PELSA a production concession over the Jarilla Quemada area. PELSA holds a 73.15% interest in the Entre Lomas field, in which APCO holds 23% and we hold a 3.85% stake.

On January 31, 2014, our Board of Directors approved the sale to YPF of our entire interest in the Puesto Hernández joint
operation (UTE) agreement, for a total price of U.S.$40.7 million. This transaction represented for us an early termination of the agreement entered into with YPF in 1991 to operate Puesto Hernández, which is an area covering 147 km2, located in the Provinces of Neuquén and Mendoza. Prior to transferring our interest in the joint operation (UTE) agreement to YPF, our share of Puesto Hernandezs daily production was
approximately 4,000 barrels of oil per day.

On December 30, 2014, the legislature of the Province of Rio Negro ratified the
agreement entered into with the government of the Province of Rio Negro to extend for an additional 10-year term our concessions in the 25 de Mayo-Medanito S.E., Jagüel de los Machos and Río Neuquén fields. We operate those three
areas and hold a 100% stake in the 25 de Mayo-Medanito S.E. and Jagüel de los Machos production fields in the Province of Rio Negro. Additionally, as part of our agreement to extend our concessions, we agreed to transfer 5% of the rights and
obligations arising from our concession in the Río Neuquén field to Empresa de Desarrollo Hidrocarburífero Provincial S.A. (EDHIPSA), as a result of which, our stake in this area will be 95% after effecting the transfer. As of
the date of this Annual Report, the transfer is pending.

On December 30, 2014, the legislature of the Province of Rio Negro also
ratified its agreement with PELSA (as operator of the relevant area), to extend our concession in the Entre Lomas field for an additional 10 years.



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Recent Divestitures

On March 4, 2015, the Secretary of Energy of the Province of Salta granted us an extension of the second exploration period in the Chirete
concession area for a period of two years. On March 19, 2015, our Board of Directors approved the transfer of a 50% stake in the Chirete area to the High Luck Group which was approved by the authorities of the Province of Salta on
September 10, 2015. On November 19, 2015, the Secretary of Energy of the Province of Salta granted us an additional one-year extension of the second exploration period, which expires in November 2016.

On March 30, 2015, our Board of Directors approved the sale to Compañía General de Combustibles S.A. (CGC) of
our entire interest in the Austral Basin in Argentina, which includes our interest in the Santa Cruz I, Santa Cruz I Oeste, Glencross and Estancia Chiripá joint operation (UTE) agreements, our assets associated with Santa Cruz II, Punta
Loyola Pier and oil and gas pipelines operated in the Austral basin, for a total price of U.S.$101 million, and recognized income before tax of Ps. 675 million. The relevant concessions cover an area of 11,500 km2 and are located in the Province of Santa Cruz. Prior to transferring our interest in the concessions, our share of the Austral Basins daily combined oil and gas production was approximately
15,000 barrels of oil equivalent per day.

On July 24, 2015, the Province of Neuquén approved the sale of 50% of our share in
Parva Negra Este to ExxonMobil Exploration Argentina S.R.L.

On September 7, 2015, the Province of La Pampa took possession of the
portion of the Jagüel de los Machos area located within the territory of La Pampa following the expiration of our concession over the area. See Oil and Gas Exploration and Production Interests.

In October and November 2015, in accordance with Section 5.2 of the association agreements relating to the Enarsa 1 and Enarsa 3
exploration areas in effect since April 2006 and November 2006, respectively, we informed our partners in those areas of our decision not to participate in the conversion of such agreements into exploration permits. In November 2015 and March 2016
we also informed such decision to the SE and the Ministry of Energy and Mining, respectively.

Our Oil and Gas Exploration and Production Interests

As is usual in the Oil and Gas Exploration and Production business, we generally participate in exploration and production
activities in conjunction with joint operation partners. Contractual arrangements among participants in a joint operation are usually governed by an operating agreement, which provides that costs, entitlements to production and liabilities are to be
shared according to each partys percentage interest in the joint operations. One party of the joint operation is usually appointed as operator and is responsible for conducting the operations under the overall supervision and control of an
operating committee that consists of representatives of each party to the joint operations. While operating agreements generally provide for liabilities to be borne by the participants according to their respective percentage interest, licenses
issued by the relevant governmental authority generally provide that participants in joint operations are jointly and severally liable for their obligations to that governmental authority pursuant to the applicable license. In addition to their
interest in field production, contractual operators are generally paid their indirect administrative expenses on a monthly basis by their partners in proportion to their participation in the relevant field.

As of December 31, 2015, we had interests in 29 blocks: 20 oil and gas production blocks (15 in Argentina and 5 outside Argentina) and 9
exploration blocks located within exploration areas or pending authorization for production (all of them located in Argentina). As of December 31, 2015, we were directly or indirectly the contractual operator of 12 of the 29 blocks in which we
had an interest.

As of December 31, 2015, our total gross and net productive wells, by geographic area were as follows:



|          |  |          |       |  |        |  |       |          |  |  |        |  |  |          |     |  |        |  |       |  |  |  |       | 
|--------- |  | -------- | ----- |  | ------ |  | ----- | -------- |  |  | ------ |  |  | -------- | --- |  | ------ |  | ----- |  |  |  | ----- | 
|          |  | Oil      |       |  | Gas    |  |       | Total(3) | 
|          |  | Gross(1) |       |  | Net(2) |  |       | Gross(1) |  |  | Net(2) |  |  | Gross(1) |     |  | Net(2) | 
|Argentina |  |          | 2,130 |  |        |  | 1,579 |          |  |  | 251    |  |  |          | 180 |  |        |  | 2,381 |  |  |  | 1,759 | 
|Venezuela |  |          | 83    |  |        |  | 23    |          |  |  | 8      |  |  |          | 3   |  |        |  | 91    |  |  |  | 26    | 
|Bolivia   |  |          | 15    |  |        |  | 15    |          |  |  | 47     |  |  |          | 47  |  |        |  | 62    |  |  |  | 62    | 
|          |  |          |       |  |        |  |       |          |  |  |        |  |  |          |     |  |        |  |       |  |  |  |       | 
|Total     |  |          | 2,228 |  |        |  | 1,617 |          |  |  | 306    |  |  |          | 230 |  |        |  | 2,534 |  |  |  | 1,847 | 
|          |  |          |       |  |        |  |       |          |  |  |        |  |  |          |     |  |        |  |       |  |  |  |       | 



|(1) | Refers to number of wells completed.
|--- | ------------------------------------

|(2) | Refers to fractional ownership working interest in gross productive wells.
|--- | --------------------------------------------------------------------------

|(3) | Includes Oil and Gas productive wells.
|--- | --------------------------------------



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##### Table of Contents

As of December 31, 2015, our total production and exploration acreage, both gross and net,
was as follows:



|          |  |                         |       |  |                 |  |     |       |  |  |         |     |  |  |       |    
|--------- |  | ----------------------- | ----- |  | --------------- |  | --- | ----- |  |  | ------- | --- |  |  | ----- | ---
|          |  | Acreage(*)              |      
|          |  | Production (1)          |       |  | Exploration (2) | 
|          |  | Gross                   |       |  | Net (3)         |  |     | Gross |  |  | Net (3) |    
|          |  | (in thousands of acres) |      
|Argentina |  |                         | 1,613 |  |                 |  | 728 |       |  |  | 15,517  | (4) |  |  | 4,701 | (5)
|Venezuela |  |                         | 485   |  |                 |  | 126 |       |  |  |        |     |  |  |      |    
|Bolivia   |  |                         | 56    |  |                 |  | 56  |       |  |  |        |     |  |  |      |    
|          |  |                         |       |  |                 |  |     |       |  |  |         |     |  |  |       |    
|Total     |  |                         | 2,154 |  |                 |  | 910 |       |  |  | 15,517  |     |  |  | 4,701 |    
|          |  |                         |       |  |                 |  |     |       |  |  |         |     |  |  |       |    



|(1) | Includes all areas in which we produce commercial quantities of oil and gas or areas in the development stage.
|--- | --------------------------------------------------------------------------------------------------------------

|(2) | Includes all areas in which we are allowed to perform exploration activities but where commercial quantities of oil and gas are not produced, plus areas that are not in the development stage.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Represents our fractional ownership working interest in the gross acreage.
|--- | --------------------------------------------------------------------------

|(4) | Includes 14,300 thousand exploration acres in offshore areas.
|--- | -------------------------------------------------------------

|(5) | Includes 4,139 thousand exploration acres in offshore areas.
|--- | ------------------------------------------------------------

|(*) | See OverviewRecent Divestures.
|--- | ----------------------------------



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The following table sets forth the number of total wells we drilled in Argentina and outside
Argentina and the results for the relevant periods. A development well, for purposes of the following table, is one that justifies the installation of permanent equipment for the production of oil or gas. A well is deemed to be a dry well if it is
determined to be incapable of commercial production. Gross wells drilled in the table below refers to the number of wells completed during each fiscal year, regardless of the spud date, and net wells drilled relates to our
fractional ownership working interest in wells drilled. This table includes wells drilled by our subsidiaries, joint operations and associates.



|                     |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|-------------------- |  | ----------------------- | --- |  | --------- |  | - | ------------------- |  |  | --------- |  |  | --------- | -- |  | -------------------- |  | - | --------- |  |  | --------- |  |  | ------------------- | -- |  |  |  | - |  |  |  | - | 
|                     |  | Year ended December 31, |    
|                     |  | 2015                    |     |  | 2014      |  |   | 2013                | 
|                     |  | Argentina               |     |  | Venezuela |  |   | Rest ofLatinAmerica |  |  | Argentina |  |  | Venezuela |    |  | Rest of LatinAmerica |  |   | Argentina |  |  | Venezuela |  |  | Rest ofLatinAmerica |   
|Gross wells drilled: |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Production:          |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Development wells:   |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Oil                  |  |                         | 84  |  |           |  | 2 |                     |  |  |          |  |  |           | 79 |  |                      |  | 2 |           |  |  |          |  |  |                     | 81 |  |  |  | 6 |  |  |  |  | 
|Gas                  |  |                         | 21  |  |           |  |  |                     |  |  |          |  |  |           | 12 |  |                      |  |  |           |  |  |          |  |  |                     | 10 |  |  |  |  |  |  |  |  | 
|Dry wells            |  |                         | 1   |  |           |  |  |                     |  |  |          |  |  |           |   |  |                      |  |  |           |  |  |          |  |  |                     | 1  |  |  |  |  |  |  |  |  | 
|                     |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Total                |  |                         | 106 |  |           |  | 2 |                     |  |  |          |  |  |           | 91 |  |                      |  | 2 |           |  |  |          |  |  |                     | 92 |  |  |  | 6 |  |  |  |  | 
|                     |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Exploration:         |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Exploratory wells:   |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Oil                  |  |                         | 4   |  |           |  |  |                     |  |  |          |  |  |           | 2  |  |                      |  |  |           |  |  |          |  |  |                     | 3  |  |  |  |  |  |  |  |  | 
|Gas                  |  |                         | 1   |  |           |  |  |                     |  |  |          |  |  |           | 4  |  |                      |  |  |           |  |  |          |  |  |                     | 2  |  |  |  |  |  |  |  |  | 
|Dry wells            |  |                         |    |  |           |  |  |                     |  |  |          |  |  |           | 2  |  |                      |  |  |           |  |  |          |  |  |                     |   |  |  |  |  |  |  |  |  | 
|                     |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Total                |  |                         | 5   |  |           |  |  |                     |  |  |          |  |  |           | 8  |  |                      |  |  |           |  |  |          |  |  |                     | 5  |  |  |  |  |  |  |  |  | 
|                     |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Net wells drilled:   |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Production:          |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Productive wells:    |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Oil                  |  |                         | 55  |  |           |  | 1 |                     |  |  |          |  |  |           | 53 |  |                      |  |  |           |  |  |          |  |  |                     | 60 |  |  |  | 1 |  |  |  |  | 
|Gas                  |  |                         | 16  |  |           |  |  |                     |  |  |          |  |  |           | 9  |  |                      |  |  |           |  |  |          |  |  |                     | 6  |  |  |  |  |  |  |  |  | 
|Dry wells            |  |                         |    |  |           |  |  |                     |  |  |          |  |  |           |   |  |                      |  |  |           |  |  |          |  |  |                     |   |  |  |  |  |  |  |  |  | 
|                     |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Total                |  |                         | 71  |  |           |  | 1 |                     |  |  |          |  |  |           | 62 |  |                      |  |  |           |  |  |          |  |  |                     | 66 |  |  |  | 1 |  |  |  |  | 
|                     |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Exploration:         |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Discovery wells:     |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Oil                  |  |                         | 2   |  |           |  |  |                     |  |  |          |  |  |           | 1  |  |                      |  |  |           |  |  |          |  |  |                     | 2  |  |  |  |  |  |  |  |  | 
|Gas                  |  |                         | 1   |  |           |  |  |                     |  |  |          |  |  |           | 4  |  |                      |  |  |           |  |  |          |  |  |                     | 1  |  |  |  |  |  |  |  |  | 
|Dry wells            |  |                         |    |  |           |  |  |                     |  |  |          |  |  |           | 1  |  |                      |  |  |           |  |  |          |  |  |                     |   |  |  |  |  |  |  |  |  | 
|                     |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 
|Total                |  |                         | 3   |  |           |  |  |                     |  |  |          |  |  |           | 6  |  |                      |  |  |           |  |  |          |  |  |                     | 3  |  |  |  |  |  |  |  |  | 
|                     |  |                         |     |  |           |  |   |                     |  |  |           |  |  |           |    |  |                      |  |   |           |  |  |           |  |  |                     |    |  |  |  |   |  |  |  |   | 

Veta Escondida Exploitation Concession

On April 4, 2012, we were notified of a decision of the government of the Province of Neuquén to terminate our production
concession in the Veta Escondida area. We sought judicial relief, arguing that we have complied with all requirements under the concession and that we did not commit any breach which would support the decision adopted by the government of
Neuquén. On June 28, 2012, the Argentine Supreme Court upheld the injunctive relief we obtained from the lower courts and ordered the Province of Neuquén to refrain from enforcing the termination of the concession until a final
ruling on the merits of the case is rendered. As of the date of this Annual Report, a final decision on the merits is pending.

On
December 19, 2013, we (as operators) and Total Austral, having an interest of 55% and 45% in the Veta Escondida exploitation concession, respectively, reached an out-of-court agreement (the Settlement Agreement) with the Province of
Neuquén and Gas y Petróleo del Neuquén (GyP), to settle a dispute arising from the enactment of provincial Decree No. 563/12, which declared the expiration of the concessionaires rights under the
production concession and led us to bring a complaint against the Province of Neuquén. In 2014, the period set forth in the Settlement Agreement for obtaining the required approval of the terms of the Settlement Agreement by the provincial
government expired.

On March 17, 2015, provincial Decree No. 565/15 approved a model agreement which included similar terms and
conditions to those reached in the Settlement Agreement. As of the date of this Annual Report, the Province of Neuquén, Total Austral and we, were still negotiating a final settlement agreement based on the model agreement considering the
current industry and market conditions.



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Jagüel de los Machos Concession in the Province of La Pampa

On September 7, 2015, the Province of La Pampa took possession of the portion of the Jagüel de los Machos area located within the
territory of La Pampa following the expiration of our concession over the area. Although an agreement had been reached with government of the Province of La Pampa prior to the expiration of such concession, the approval of the provincial legislature
required for such agreement to be binding was not obtained. As a result, we filed administrative claims to protect our extension rights under the provisions of Law No. 17,319 as amended by Law No. 27,007 and provincial Decree
No. 18/2015. However, we have ceased our activities in the area from the date on which the Province of La Pampa took possession of it.

25 de Mayo-Medanito S.E. Concession in the Province of La Pampa

On March 30, 2016, the legislature of the Province of La Pampa approved a bill declaring the strategic importance of the portion of the 25
de Mayo-Medanito S.E. area located within such province, and transferring its possession to the Province upon expiration of our original concession period of 25 years in November 2016, although we are entitled to request a ten-year extension of our
concession under applicable law.

Production

Argentine Oil and Gas Production

Rights to develop oil and gas fields in Argentina are currently awarded by the provincial governments through concessions and exploration
permits. Under the amended Hydrocarbons Law, conventional (oil and gas) concessions will remain in effect for 25 years, non-conventional concessions for 35 years and offshore concessions for 30 years, and are typically renewable for a maximum term
of ten years, and permits are generally granted for initial periods of four years. Concessionaires in Argentina are entitled to gross proceeds from production sales. All permanent fixtures, materials and equipment are under the control of the
concessionaire, although they revert to the Argentine government at the end of the concession. Royalties based on production are paid to the respective Argentine provinces. Pursuant to the amended Hydrocarbons Law, concessionaires must pay royalties
equivalent to 12% of the wellhead price of crude oil and natural gas, and are required to make additional royalty payments ranging from 3% up to a maximum of 18% when applying for extensions. The wellhead price is calculated by deducting freight and
other sales related expenses from the sale prices obtained from transactions with third parties.

We transport our oil and gas production
in several ways depending on the infrastructure available and the cost efficiency of the transportation system in a given location. We use the oil pipeline system and oil tankers to transport oil to our customers. Oil is customarily sold through
contracts whereby producers are responsible for transporting produced oil from the field to a port for shipping, with all costs and risks associated with transportation borne by the producer. Gas, however, is sold at the delivery point of the gas
pipeline system near the field and, therefore, the customer bears all transportation costs and risks associated therewith. Oil and gas transportation in Argentina operates in an open access non-discriminatory environment under which
producers have equal and open access to the transportation infrastructure. We maintain limited storage capacity at each oil site and at the terminals from which oil is shipped. In the past, such capacity has been sufficient to store oil without
reducing production during temporary unavailability of the pipeline systems, due, for example, to maintenance requirements or temporary emergencies.

As of December 31, 2015, we owned 15 concessions in oil and gas production areas in Argentina. Our production is concentrated in three
basins: the Neuquén, San Jorge and Noroeste Basins. In the Neuquén basinthe most important basin in Argentina in terms of oil and gas productionwe own approximately 626,000 net acres. Our most important fields in the
Neuquén basin are 25 de Mayo-Medanito S.E., El Mangrullo and Río Neuquén. As of December 31, 2015, we had 2,381 productive wells in Argentina.

For the year 2015, our average daily production was 31,977 barrels of crude oil and 217.1 million cubic feet of natural gas, representing
a decrease of 16.4% in our production of oil (mainly as a result of the sale of the Austral Basin blocks) and of 11.8% in our production of gas, compared to 2014.

During 2015, according to the SE, oil production in Argentina averaged 532,116 barrels per day, remaining stable compared to 2014. Gas
production increased by 4% and stood at 4.2 billion cubic feet per day. In 2015, our oil production and our gas production accounted for approximately 3% and 6% of total oil production and gas production in Argentina, respectively, and positioned us
as the fourth producer of oil and gas in the country.

In 2015, we carried out investment plans aligned with our reserves replacement and
production goals, as a means to achieve sustainable growth. Our capital expenditures included the drilling of 42 producing wells, repairing 23 producing wells, mainly in the Neuquén basin, and expanding secondary recovery projects and surface
facilities in several areas in which we operate.

Production Outside Argentina

As of December 31, 2015, 10% of our combined proved reserves were located outside Argentina. In addition, as of December 31, 2015,
approximately 11% of our oil production and 6% of our gas production came from outside Argentina. As of that date, we had working interests in five oil and gas production blocks outside Argentina: Oritupano Leona, La Concepción, Acema and
Mata in Venezuela (through direct and indirect equity interests in mixed companies, including Petroritupano S.A., Petroven-Bras S.A., Petrowayú S.A. and Petrokariña S.A.), and Colpa Caranda in Bolivia.



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Venezuela

During 2015, oil and gas production attributable to our operations in Venezuela averaged 3,502 barrels of oil equivalent per day, representing
4.7% of our daily production and a decrease of 28.6% compared to 2014. Our four areas in Venezuela, operated by mixed companies, had an aggregate of 91 productive wells.

Mixed companies are required to sell all liquid hydrocarbons and the associated natural gas they produce to Petróleos de Venezuela S.A.
(PDVSA) by reference to a price formula that uses international benchmarks such as the price of WTI crude.

As of
December 31, 2015, mixed companies must pay the following special taxes: (i) a 3.33% additional royalty on the volume of hydrocarbons extracted under the concession and delivered to PDVSA during the calendar year, and (ii) an amount
equivalent to the difference, if any, between (a) 50% of the value of the hydrocarbons extracted under the concession and delivered to PDVSA each calendar year, and (b) the aggregate payments made by the mixed company to Venezuela in
connection with activities conducted by the mixed company during such calendar year, such as royalties paid on extracted hydrocarbons (including the additional royalty indicated in the preceding item (i), income tax and any other tax or
contribution calculated on the basis of income (either gross or net), and investments in domestic development projects amounting to one percent (1%) of profit before taxes).

In 2011, the Venezuelan government amended the 2008 Law of Special Contribution to Extraordinary Prices in the International
Hydrocarbons Market, which had introduced a special tax payable by companies exporting or transporting liquid hydrocarbons and oil by-products outside Venezuela, to be applied when the average price of the basket of Venezuelan liquid
hydrocarbons exceeded a stated price. The 2011 rules modified the special tax by creating two special contributions, one for extraordinary prices and another for exorbitant prices, to be applied to the difference between the
price set forth by the Venezuelan national budget and the monthly average of international prices of the basket of Venezuelan liquid hydrocarbons. In 2013, the Venezuelan government introduced further modifications and updated the rates of these
specials contributions. As modified, when the monthly average of international prices of the basket of Venezuelan liquid hydrocarbons exceeds U.S.$80 per barrel, these are considered exorbitant prices. These special contributions are
recorded by mixed companies as selling expenses in their financial statements and negatively impact the mixed companies.

Bolivia

In 2015, our net daily production in Bolivia calculated using the economic interest method was 2,637 barrels of oil equivalent, or
3.5% of our total production. Of this amount, 12.2 MMcf/d corresponded to gas production and 606 barrels of oil per day corresponded to liquid hydrocarbons, including liquified petroleum gas (LPG).

As of December 31, 2015, we held a 100% interest in the Colpa Caranda Block in Bolivia. The Colpa Caranda Block covers approximately
56,000 net acres located in the Sub Andina Central Basin and has 62 producing wells. These fields, which originally exported gas to Argentina, currently deliver gas primarily to the Santa Cruz-São Paulo pipeline that transports gas to Brazil.

As of December 31, 2008, estimated proved oil and gas reserves attributable to our operations in Bolivia amounted to 23 MMboe.
However, on January 25, 2009, Bolivia adopted a new constitution that prohibits private ownership of the countrys oil and gas resources. In light of the new constitution, we were required to write off all of our proved reserves in Bolivia
at the end of 2009.

We have operated the Colpa Caranda Block in Bolivia since 1989. Under a contract signed in October 2006 with the
Bolivian national oil company, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), we currently perform exploration and production activities at our own risk and for our own account in the Colpa Caranda Block, but on behalf and in the
name of YPFB. The agreement was approved on April 23, 2007 and became effective on May 2, 2007. Under this agreement, YPFB owns the hydrocarbons and pays royalties, direct interest and direct tax on hydrocarbons, which in the aggregate
amount to 50% of the production valued on the basis of sales prices net of transport costs charged for use of pipelines from the Colpa fields to Brazil. Of the remaining amounts, 80% is used to pay for operating services provided by us, including
depreciation. The balance is shared between YPFB and us on the basis of an index calculated based on production volumes, depreciation rates, prices and taxes paid, among other items.

Ecuador

On
October 31, 2008, EcuadorTLC S.A. (our subsidiary), Teikoku Oil Ecuador and Petroecuador, among others, executed a series of amendatory agreements regulating the operation of Block 18 and Palo Azul Unified Field (the Amendatory
Agreements), while the parties negotiated the migration to a new contract modality.

On July 26, 2010, the Hydrocarbon Law in
force in Ecuador was amended to provide for, among other things, the obligation to migrate to a new contract modality before November 24, 2010.

We decided not to accept the final proposal received from the Ecuadorian government to migrate from the original arrangements to service
agreements in Block 18 and the Palo Azul Unified Field. Consequently, through a Resolution dated November 25, 2010, the Hydrocarbon Secretary notified EcuadorTLC S.A. of the termination of the participation agreements and instructed
Petroamazonas EP to undertake the operational transition process. Until November 25, 2010, our oil production in Ecuador averaged 2,300 barrels per day, accounting for 2.3% of our total average daily production in barrels of oil equivalent.



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Section 9 of the Amendatory Agreements provides that the Ecuadorian government must
compensate the terminated parties in an amount equivalent to unamortized investments adjusted by reference to a variable rate, and provides for a period of time for the Ecuadorian government and the terminated parties to work out the details of the
termination payment.

On March 18, 2011, the Hydrocarbon Secretary issued Official Notice No. 626 to inform us that it was
analyzing and structuring a new regulatory framework to determine a settlement price for the termination, to be applied instead of the provisions of the Amendatory Agreements. On April 11, 2011, we filed an answer to Official Notice
No. 626 rejecting the terms thereof and claiming that the same did not comply with the conditions set forth in the Amendatory Agreements. In this respect, we informed the Hydrocarbon Secretary that it would continue to seek compliance with the
terms of the Amendatory Agreements.

In the absence of further action by the Ecuadorian government, on December 8, 2011, we served a
notice on the Ecuadorian government informing it of the existence of a dispute under the terms of the Treaty for the Promotion and Reciprocal Protection of Investments previously entered into between Argentina and Ecuador. Under the treaty, this
implies the opening of a negotiation period prior to possible arbitration to seek enforcement of the provisions of the Amendatory Agreements.

On June 21, 2013, not having reached an agreement with the Ecuadorian government, EcuadorTLC SA, Cayman International Exploration Company
and Teikoku Oil Ecuador, members of the Consortium, submitted a letter of notification of a dispute under the terms of the Amendatory Agreements to the Ecuadorian State, stating their decision to submit the dispute to international arbitration under
the arbitration Rules of the UNCITRAL, which arbitration commenced on February 26, 2014. The defendant submitted its answer to the complaint and its objections to the jurisdiction of the arbitral tribunal on March 21, 2016. The members of
the Consortium will submit their answer to the defendants arguments on or prior to May 12, 2016.

As of the date of this Annual
Report, we have taken all the necessary procedural steps to preserve our rights to receive the compensation provided for in the Amendatory Agreements from the Ecuadorian government.

At December 31, 2015, we recorded Ps.698 million to be recovered from the Ecuadorian State under the provisions of the Amendatory
Agreements, excluding any interest accrued, as we believe that it is not possible to determine with certainty the interest rate to be applied.

Crude Oil Transportation Agreement with OCP

Starting November 10, 2003, EcuadorTLC S.A., entered into a Ship or Pay agreement with Oleoducto de Crudos Pesados S.A.
(OCP), whereby it secured an oil transportation capacity of 80,000 barrels per day for a 15-year term.

Under this agreement,
EcuadorTLC S.A. must comply with its contractual obligations for the aggregate committed capacity, regardless of the amount of crude oil actually transported, and pay a rate that covers OCPs operating costs and financial services, among other
items.

While the Amendatory Agreements remained in force, transportation capacity costs invoiced by OCP were charged on a monthly basis.
Costs related to the crude oil volume actually transported were charged to Administrative and selling expenses, while the portion of costs related to the unused committed transportation capacity was shown under Other operating
expenses.

We are entitled to sell transportation capacity through OCPs pipeline to mitigate the negative effect of excess
contracted capacity. In this respect, we periodically negotiate the sale of committed transportation capacity. On December 31, 2008, EcuadorTLC S.A. and Petroecuador entered into an agreement under which, as from January 1, 2009,
transportation of crude oil through OCPs pipeline is charged by Petroecuador to the transportation capacity committed to under the agreement entered into between EcuadorTLC S.A. and OCP, up to a maximum of 70,000 barrels per day. In addition,
EcuadorTLC sold transportation capacity for approximately 8,000 oil barrels per day to third parties for the July 2004-January 2012 period. In October 2008, 40% of the net contractual commitment was assumed by Teikoku Oil Ecuador, as consideration
for the assignment to this Company of a 40% interest in Block 18 and Palo Azul.

In the third quarter of 2015, we reassumed the
obligations previously assigned to Teikoku Oil Ecuador through Petrobras Bolivia Internacional S.A. in exchange for a U.S.$95 million payment. As a result of this transaction, we have the necessary funds to continue with negotiations in Ecuador.
Estimated obligations of Ps.626 million attributable to contract renegotiations in Ecuador were recognized in current provisions in our Audited Consolidated Financial Statements. As of December 31, 2015, current and non-current liabilities for
the net transport capacity hired from OCP amounted to Ps.299 million and Ps.88 million, respectively. Assumptions used for provisions calculation mainly include the estimate of the applicable rate and the transport capacity used by third
parties. The discount rates used in the measurement consider the type of liability, the business segment and the country where transactions are conducted. In estimating liabilities as of December 31, 2015, as a result of assumptions revision,
we recorded a gain of Ps.507 million. We must maintain letters of credit to ensure compliance with financial commitments under the Ship or Pay agreement with OCP and commitments related to OCP trade payables. The letters of credit, which will
finally expire in December 2018, will be gradually released as commitments extinguish. As of December 31, 2015, we hold letters of credit for approximately U.S.$64.2 million. We are required to renew or replace the letters of credit as they
expire, otherwise, we would have to deposit cash in amounts equal to our guarantee obligations. See Item 7. Major Shareholders and Related Party TransactionsRelated Party TransactionsCommercial Operations.



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Statistical Information Relating to Oil and Gas Production

The following table sets forth our oil and gas production during 2015. Production figures represent our working interest in production (and are
therefore net to us). In addition, the table includes our working interest in each field, the number of producing wells and the expiration date of the concessions, in each case as of December 31, 2015. Although some of these concessions may be
extended at their expiration, the expiration dates set forth below do not include any extensions.



|                           |  |                        |  |                |  |                 |        |  |                 |  |        |                    |  |  |        |          |  |  |            |  |  |  |        |      |  |  |           | 
|-------------------------- |  | ---------------------- |  | -------------- |  | --------------- | ------ |  | --------------- |  | ------ | ------------------ |  |  | ------ | -------- |  |  | ---------- |  |  |  | ------ | ---- |  |  | --------- | 
|                           |  |                        |  |                |  | 2015 Production |        |  | Oil andGasWells |  |        |                    | 
|Production Areas           |  | Location               |  | Basin          |  | Oil (1)         |        |  | Gas (2)         |  |        | Oil Equivalent (3) |  |  |        | Interest |  |  | Expiration | 
|Argentina:                 |  |                        |  |                |  |                 |        |  |                 |  |        |                    |  |  |        |          |  |  |            |  |  |  |        |      |  |  |           | 
|25 de Mayo  Medanito S.E. |  | La Pampa and Río Negro |  | Neuquén        |  |                 | 3,048  |  |                 |  | 2,713  |                    |  |  | 3,500  |          |  |  | 662        |  |  |  | 100.00 | %    |  |  | 2016/2026 | 
|El Mangrullo               |  | Neuquén                |  | Neuquén        |  |                 | 44     |  |                 |  | 21,930 |                    |  |  | 3,699  |          |  |  | 29         |  |  |  | 100.00 | %    |  |  | 2025      | 
|Jagüel de los Machos       |  | Río Negro              |  | Neuquén        |  |                 | 1,726  |  |                 |  | 2,996  |                    |  |  | 2,225  |          |  |  | 170        |  |  |  | 100.00 | %    |  |  | 2025      | 
|Bajada del Palo            |  | Neuquén                |  | Neuquén        |  |                 | 1,326  |  |                 |  | 4,016  |                    |  |  | 1,995  |          |  |  | 128        |  |  |  | 46.92  | %(4) |  |  | 2025      | 
|Santa Cruz II(8)           |  | Santa Cruz             |  | Austral        |  |                 | 78     |  |                 |  | 354    |                    |  |  | 137    |          |  |  |           |  |  |  | 100.00 | %    |  |  | 2017/2028 | 
|Río Neuquén                |  | Río Negro and Neuquén  |  | Neuquén        |  |                 | 383    |  |                 |  | 19,654 |                    |  |  | 3,659  |          |  |  | 137        |  |  |  | 100.00 | %    |  |  | 2027      | 
|Entre Lomas                |  | Río Negro and Neuquén  |  | Neuquén        |  |                 | 2,091  |  |                 |  | 3,769  |                    |  |  | 2,719  |          |  |  | 487        |  |  |  | 46.92  | %(4) |  |  | 2026      | 
|Aguada de la Arena         |  | Neuquén                |  | Neuquén        |  |                 | 50     |  |                 |  | 5,396  |                    |  |  | 949    |          |  |  | 14         |  |  |  | 80.00  | %    |  |  | 2036      | 
|Santa Cruz I(8)            |  | Santa Cruz             |  | Austral        |  |                 | 207    |  |                 |  | 4,457  |                    |  |  | 950    |          |  |  |           |  |  |  | 71.00  | %    |  |  | 2017/2035 | 
|Sierra Chata               |  | Neuquén                |  | Neuquén        |  |                 | 42     |  |                 |  | 7,708  |                    |  |  | 1,327  |          |  |  | 59         |  |  |  | 45.56  | %    |  |  | 2023      | 
|Atuel Norte                |  | Mendoza                |  | Neuquén        |  |                 | 2      |  |                 |  |       |                    |  |  | 2      |          |  |  | 5          |  |  |  | 33.33  | %(7) |  |  | 2016      | 
|La Tapera  Puesto Quiroga |  | Chubut                 |  | San Jorge      |  |                 | 43     |  |                 |  |       |                    |  |  | 43     |          |  |  | 6          |  |  |  | 35.67  | %(7) |  |  | 2027      | 
|El Tordillo                |  | Chubut                 |  | San Jorge      |  |                 | 1,875  |  |                 |  |       |                    |  |  | 1,875  |          |  |  | 567        |  |  |  | 35.67  | %(7) |  |  | 2027      | 
|Aguaragüe                  |  | Salta                  |  | Noroeste       |  |                 | 102    |  |                 |  | 3,450  |                    |  |  | 677    |          |  |  | 34         |  |  |  | 15.00  | %(7) |  |  | 2023/2027 | 
|Estancia Agua Fresca(8)    |  | Santa Cruz             |  | Austral        |  |                 | 162    |  |                 |  | 530    |                    |  |  | 250    |          |  |  |           |  |  |  | 50.00  | %    |  |  | 2034      | 
|Puesto Oliverio(8)         |  | Santa Cruz             |  | Austral        |  |                 |       |  |                 |  |       |                    |  |  |       |          |  |  |           |  |  |  | 50.00  | %    |  |  | 2037      | 
|Gobernador Ayala           |  | Mendoza                |  | Neuquén        |  |                 | 198    |  |                 |  |       |                    |  |  | 198    |          |  |  | 47         |  |  |  | 22.51  | %(7) |  |  | 2036      | 
|Charco del Palenque        |  | Río Negro              |  | Neuquén        |  |                 | 287    |  |                 |  | 826    |                    |  |  | 425    |          |  |  | 32         |  |  |  | 46.92  | %(4) |  |  | 2034      | 
|Jarilla Quemada            |  | Río Negro              |  | Neuquén        |  |                 | 7      |  |                 |  | 1,449  |                    |  |  | 249    |          |  |  | 4          |  |  |  | 46.92  | %(4) |  |  | 2040      | 
|                           |  |                        |  |                |  |                 |        |  |                 |  |        |                    |  |  |        |          |  |  |            |  |  |  |        |      |  |  |           | 
|Total Argentina            |  |                        |  |                |  |                 | 11,671 |  |                 |  | 79,248 |                    |  |  | 24,879 |          |  |  | 2,381      |  |  |  |        |      |  |  |           | 
|                           |  |                        |  |                |  |                 |        |  |                 |  |        |                    |  |  |        |          |  |  |            |  |  |  |        |      |  |  |           | 
|Outside Argentina:         |  |                        |  |                |  |                 |        |  |                 |  |        |                    |  |  |        |          |  |  |            |  |  |  |        |      |  |  |           | 
|Colpa Caranda (5)          |  | Bolivia                |  | Sub Andina     |  |                 | 221    |  |                 |  | 4,448  |                    |  |  | 962    |          |  |  | 62         |  |  |  | 100.00 | %    |  |  | 2029      | 
|Oritupano Leona (6)        |  | Venezuela              |  | Oriental       |  |                 | 627    |  |                 |  |       |                    |  |  | 627    |          |  |  | 47         |  |  |  | 22.00  | %(7) |  |  | 2025      | 
|Acema (6)                  |  | Venezuela              |  | Oriental       |  |                 | 6      |  |                 |  |       |                    |  |  | 6      |          |  |  | 15         |  |  |  | 34.49  | %(7) |  |  | 2025      | 
|La Concepción (6)          |  | Venezuela              |  | Lago Maracaibo |  |                 | 504    |  |                 |  | 313    |                    |  |  | 556    |          |  |  | 29         |  |  |  | 36.00  | %(7) |  |  | 2025      | 
|Mata (6)                   |  | Venezuela              |  | Oriental       |  |                 | 90     |  |                 |  |       |                    |  |  | 90     |          |  |  |           |  |  |  | 34.49  | %(7) |  |  | 2025      | 
|                           |  |                        |  |                |  |                 |        |  |                 |  |        |                    |  |  |        |          |  |  |            |  |  |  |        |      |  |  |           | 
|Total Outside Argentina    |  |                        |  |                |  |                 | 1,448  |  |                 |  | 4,761  |                    |  |  | 2,241  |          |  |  | 153        |  |  |  |        |      |  |  |           | 
|                           |  |                        |  |                |  |                 |        |  |                 |  |        |                    |  |  |        |          |  |  |            |  |  |  |        |      |  |  |           | 
|Total                      |  |                        |  |                |  |                 | 13,119 |  |                 |  | 84,009 |                    |  |  | 27,120 |          |  |  | 2,534      |  |  |  |        |      |  |  |           | 
|                           |  |                        |  |                |  |                 |        |  |                 |  |        |                    |  |  |        |          |  |  |            |  |  |  |        |      |  |  |           | 



|(1) | In thousands of barrels.
|--- | ------------------------

|(2) | Gas production represents only marketable production of natural gas excluding flared gas, injected gas and gas consumend in operations. In millions of cubic feet.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | In thousands of barrels of oil equivalent. Gas is converted to oil equivalent using a factor of 6,000 cubic feet of gas per barrel of oil equivalent.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Production and wells were calculated on the basis of our 77% interest, which includes our 3.85% direct interest in this area and our 73.15% indirect interest through PELSA.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Production from Colpa Caranda block was calculated using the economic interest method.
|--- | --------------------------------------------------------------------------------------

|(6) | Indirect interests through mixed companies.
|--- | -------------------------------------------

|(7) | Areas operated by third parties.
|--- | --------------------------------

|(8) | Producing wells as of the date of sale of the interest in the Austral Basin, on March 30, 2015, amounted to 56, 104, 25 and 1 in Santa Cruz II, Santa Cruz I, Estancia Agua Fresca and Puesto Oliverio, respectively.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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The following table sets forth our oil and gas production on an as sold annual basis
by geographical area for the fiscal years ended December 31, 2015, 2014 and 2013. This table includes our net share of production of subsidiaries, joint operations and associates.



|                                 |  |                         |        |  |        |  |        |        |  |  |        |  |  |        |        |  |        |  |        |  |  |  |        | 
|-------------------------------- |  | ----------------------- | ------ |  | ------ |  | ------ | ------ |  |  | ------ |  |  | ------ | ------ |  | ------ |  | ------ |  |  |  | ------ | 
|                                 |  | Year ended December 31, |       
|                                 |  | 2015                    |        |  | 2014   |  |        | 2013   | 
|                                 |  | Oil(1)                  |        |  | Gas(2) |  |        | Oil(1) |  |  | Gas(2) |  |  | Oil(1) |        |  | Gas(2) | 
|Río Neuquén area in
Argentina(3) |  |                         | 383    |  |        |  | 19,654 |        |  |  | 323    |  |  |        | 11,527 |  |        |  | 343    |  |  |  | 11,499 | 
|Other areas in Argentina         |  |                         | 11,288 |  |        |  | 59,594 |        |  |  | 13,733 |  |  |        | 78,331 |  |        |  | 16,333 |  |  |  | 80,713 | 
|Venezuela(4)                     |  |                         | 1,227  |  |        |  | 313    |        |  |  | 1,691  |  |  |        | 591    |  |        |  | 2,014  |  |  |  | 619    | 
|Bolivia(5)                       |  |                         | 221    |  |        |  | 4,448  |        |  |  | 258    |  |  |        | 4,939  |  |        |  | 285    |  |  |  | 5,898  | 
|                                 |  |                         |        |  |        |  |        |        |  |  |        |  |  |        |        |  |        |  |        |  |  |  |        | 
|Total                            |  |                         | 13,119 |  |        |  | 84,009 |        |  |  | 16,005 |  |  |        | 95,388 |  |        |  | 18,975 |  |  |  | 98,729 | 
|                                 |  |                         |        |  |        |  |        |        |  |  |        |  |  |        |        |  |        |  |        |  |  |  |        | 



|(1) | Oil production includes other liquid hydrocarbons. Amounts in thousands of barrels.
|--- | -----------------------------------------------------------------------------------

|(2) | Gas production represents only marketable production of natural gas excluding flared gas, injected gas and gas consumed in operations. Amounts in millions of cubic feet.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Río Neuquén area is separately included as it contains more than 15% of our total proved reserves.
|--- | --------------------------------------------------------------------------------------------------

|(4) | Indirect interests through mixed-ownership companies.
|--- | -----------------------------------------------------

|(5) | Calculated using the economic interest method.
|--- | ----------------------------------------------

The following table sets forth the average
sales price per barrel of oil and per million cubic feet of gas for each geographic area for the fiscal years ended December 31, 2015, 2014 and 2013, of our subsidiaries, joint operations and associates.



|                                       |  |                         |       |  |      |  |       |      |  |  |       | 
|-------------------------------------- |  | ----------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                       |  | Year ended December 31, |      
|                                       |  | 2015                    |       |  | 2014 |  |       | 2013 | 
|Argentina:                             |  |                         |       |  |      |  |       |      |  |  |       | 
|Oil (in pesos per barrel of oil)       |  |                         | 646.8 |  |      |  | 615.7 |      |  |  | 399.0 | 
|Gas (in pesos per thousand cubic feet) |  |                         | 36.7  |  |      |  | 22.5  |      |  |  | 12.6  | 
|                                       |  |                         |      
|Venezuela(1):                          |  |                         |       |  |      |  |       |      |  |  |       | 
|Oil (in pesos per barrel of oil)       |  |                         | 651.3 |  |      |  | 589.4 |      |  |  | 610.3 | 
|                                       |  |                         |      
|Rest of Latin
America(2):              |  |                         |       |  |      |  |       |      |  |  |       | 
|Oil (in pesos per barrel of oil)       |  |                         | 330.6 |  |      |  | 400.2 |      |  |  | 157.2 | 
|Gas (in pesos per thousand cubic feet) |  |                         | 32.4  |  |      |  | 53.2  |      |  |  | 44.9  | 



|(1) | Amounts are translated into Argentine pesos at historic exchange rates, using an annual average exchange rate.
|--- | --------------------------------------------------------------------------------------------------------------

|(2) | Amounts are translated into Argentine pesos at historic exchange rates, using a monthly average exchange rate.
|--- | --------------------------------------------------------------------------------------------------------------

The following table sets forth our average production cost, royalties and depreciation cost of oil and gas fields in each geographic area for
the fiscal years ended December 31, 2015, 2014 and 2013. This table includes our net share of production of our subsidiaries, joint operations and associates.



|                |  |                                         |          |  |      |  |        |      |  |  |        | 
|--------------- |  | --------------------------------------- | -------- |  | ---- |  | ------ | ---- |  |  | ------ | 
|                |  | Year ended December 31,                 |         
|                |  | 2015                                    |          |  | 2014 |  |        | 2013 | 
|                |  | (in pesos per barrel of oil equivalent) |         
|Argentina:      |  |                                         |          |  |      |  |        |      |  |  |        | 
|Production cost |  |                                         | 121.73   |  |      |  | 109.23 |      |  |  | 80.82  | 
|Royalties       |  |                                         | 65.99    |  |      |  | 52.17  |      |  |  | 34.27  | 
|Depreciation    |  |                                         | 89.56    |  |      |  | 80.05  |      |  |  | 58.73  | 
|                |  |                                         |          |  |      |  |        |      |  |  |        | 
|Total           |  |                                         | 277.28   |  |      |  | 241.45 |      |  |  | 173.82 | 
|                |  |                                         |         
|Venezuela(1):   |  |                                         |          |  |      |  |        |      |  |  |        | 
|Production cost |  |                                         | 1,297.66 |  |      |  | 314.03 |      |  |  | 172.85 | 
|Royalties       |  |                                         | 202.46   |  |      |  | 228.26 |      |  |  | 127.61 | 
|Depreciation    |  |                                         | 149.87   |  |      |  | 126.46 |      |  |  | 64.49  | 
|                |  |                                         |          |  |      |  |        |      |  |  |        | 
|Total           |  |                                         | 1,649.99 |  |      |  | 668.75 |      |  |  | 364.95 | 



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|                          |  |                                         |        |  |      |  |        |      |  |  |       | 
|------------------------- |  | --------------------------------------- | ------ |  | ---- |  | ------ | ---- |  |  | ----- | 
|                          |  | Year ended December 31,                 |       
|                          |  | 2015                                    |        |  | 2014 |  |        | 2013 | 
|                          |  | (in pesos per barrel of oil equivalent) |       
|                          |  |                                         |       
|Rest of Latin America(2): |  |                                         |        |  |      |  |        |      |  |  |       | 
|Production cost           |  |                                         | 92.29  |  |      |  | 70.80  |      |  |  | 34.62 | 
|Royalties                 |  |                                         |       |  |      |  |       |      |  |  |      | 
|Depreciation              |  |                                         | 76.94  |  |      |  | 36.19  |      |  |  | 17.90 | 
|                          |  |                                         |        |  |      |  |        |      |  |  |       | 
|Total                     |  |                                         | 169.23 |  |      |  | 106.99 |      |  |  | 52.52 | 
|                          |  |                                         |        |  |      |  |        |      |  |  |       | 



|(1) | Amounts are translated into Argentine pesos at historic exchange rates, using an annual average exchange rate.
|--- | --------------------------------------------------------------------------------------------------------------

|(2) | Amounts are translated into Argentine pesos at historic exchange rates, using a monthly average exchange rate.
|--- | --------------------------------------------------------------------------------------------------------------

Exploration

Our strategy is focused on
constantly searching for new exploration opportunities aligned with our growth targets. In Argentina, we own substantial acreage containing undeveloped reservoirs of non-conventional energy sources, including both shale oil and shale gas in the
Neuquén basin. In the coming years, we expect to focus on these areas as well as conventional reservoirs that are located close to infrastructure.

The following table lists our exploration areas in Argentina as of December 31, 2015, the location and basin of each area, our net
working interest and the expiration date for the exploration authorization.



|                                    |  |                   |  |                    |  |          |       |      |            |  |      |  
|----------------------------------- |  | ----------------- |  | ------------------ |  | -------- | ----- | ---- | ---------- |  | ---- | -
|                                    |  | Location          |  | Basin              |  | Interest |       |      | Expiration | 
|Argentina:                          |  |                   |  |                    |  |          |       |      |            |  |      |  
|Parva Negra Este(1)                 |  | Neuquén           |  | Neuquén            |  |          | 42.50 | %    |            |  | 2018 |  
|Cerro Hamaca Norte                  |  | Mendoza           |  | Neuquén            |  |          | 39.64 | %(2) |            |  | (3   | )
|Chirete(*)                          |  | Salta             |  | Noroeste           |  |          | 50.00 | %    |            |  | 2016 |  
|Enarsa 1(4)                         |  | Continental Shelf |  | Offshore Argentina |  |          | 25.00 | %(2) |            |  | 2020 |  
|Enarsa 3(4)                         |  | Continental Shelf |  | Offshore Argentina |  |          | 35.00 | %    |            |  | 2020 |  
|Río Atuel                           |  | Mendoza           |  | Neuquén            |  |          | 33.33 | %(2) |            |  | 2016 |  
|Borde del Limay(5)                  |  | Neuquén           |  | Neuquén            |  |          | 85.00 | %    |            |  | 2015 |  
|Los Vértices(5)                     |  | Neuquén           |  | Neuquén            |  |          | 85.00 | %    |            |  | 2015 |  
|Veta Escondida and Rincón de Aranda |  | Neuquén           |  | Neuquén            |  |          | 55.00 | %    |            |  | 2027 |  



|(1) | On July 24, 2015, the Province of Neuquén approved the sale of 50% of our share in Parva Negra Este to ExxonMobil Exploration Argentina S.R.L.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Areas operated by third parties.
|--- | --------------------------------

|(3) | We have filed an application for a production concession with respect to this field, which is pending approval as of the date of this Annual Report.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | In accordance with Section 5.2 of the association agreements relating to the the Enarsa 1 and Enarsa 3 exploration areas in effect since April 2006 and November 2006, respectively, we informed our partners in those
areas of our decision not to participate in the conversion of such agreements into exploration permits.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | In process of being transferred to GyP (holder of the exploration permit).
|--- | --------------------------------------------------------------------------

|(*) | See Item 4. Information on the CompanyOil and Gas Exploration and Production OverviewRecent Divestures.
|--- | -----------------------------------------------------------------------------------------------------------

Exploration in Argentina

As of December 31, 2015, we held interests in approximately 15,517,000 gross exploration acres in Argentina and approximately 881,000
gross exploration and production acres were located in shale oil/shale gas areas.

During 2015, we drilled two onshore wells in the
Neuquén basin: (i) the Mangrullo a-1048 well in the El Mangrullo area and (ii) the TA a-1149d well in the Jagüel de los Machos area. We also began drilling the PNE x-1004 well in the Parva Negra Este area, but drilling
activities were temporarily suspended due to mechanical problems in the relevant rig. Completion of the drilling is scheduled for 2016. The drilling of the PNE x-1001 well in Parva Negra Este area was completed in February 2016.

The Parva Negra Este wells main objective is to evaluate the productivity of the Vaca Muerta formation at a depth of 2,300 meters. These
wells are a key component of the non-conventional resources exploration program started in 2013.



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The Mangrullo a-1048 well was drilled to delimit the discovery previously made in the Agrio
formation in 2013 as a result of the drilling of the Mangrullo x-1015 well. During 2015, completion activitites and subsequent testing were conducted in the two wells (drilled in 2015 and 2014, respectively).

The TA a-1149d well was drilled to delimit the southern portion of the Tapera Este field in the Jagüel de los Machos area, and is
currently productive.

In 2015, we drilled in the following non-operated areas in the Neuquén basin: AtO.x-1 in Río Atuel
area and JCPS.x-1001 in Gobernador Ayala area, both in the Province of Mendoza, and PB.xp-226 in Entre Lomas, in the Province of Río Negro. AtO.x-1 and JCPS.x-1001 were discovery wells and the PB.xp-226 well is being tested for gas
production, but there is no certainty of its productive potencial. In addition, in the Noroeste basin, drilling activities in the Los Blancos.x-1002 well in the Chirete area were completed early in January 2016. Further drilling activities will be
performed during 2016.

In 2014, we began early production of non-conventional oil in the Province of Neuquén by drilling the
Rincón de Aranda x-1 exploration well after the discovery made in Rincón de Aranda in 2013. Drilling activities continued in 2015. In addition, during 2015 extended test and production activities of the SCh.x-97 well, a
non-conventional gas discovery well in the Vaca Muerta formation drilled in 2013 and completed in 2014, continued.

Area for the
Exploration of Non-Conventionals Hydrocarbon Reserves

On December 6, 2013, we acquired an 85% participation in a joint
operation (UTE) agreement in association with GyP, who has the remaining 15%, for the exploration and potential exploitation of the area of Parva Negra Este, located in the Neuquén basin.

The exploration permit is valid for four years plus a one-year extension with the right to request the exploitation concession for 25 years,
which can also be extended for an additional 10 years. This agreement was approved by the government of the Province of Neuquén through Decree No. 575/14, published on April 4, 2014.

On July 24, 2015, the Province of Neuquén approved the sale of 50% of our share in Parva Negra Este to ExxonMobil Exploration
Argentina S.R.L.

We own concessions in the Neuquén basin with both shale oil and shale gas potential. The development of
non-conventional resources will demand major capital investments. See Item 5. Operating and Financial Review and ProspectsFuture Capital RequirementsOil and Gas exploration and Production.

Reserves

We believe our estimates of
remaining proved recoverable oil and gas reserve volumes to be reasonable. Pursuant to Rule 4-10 of Regulation S-X, promulgated by the SEC, proved oil and natural gas reserves are those estimated quantities of crude oil, natural gas and natural gas
liquids that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs, under existing economic and operating conditions, i.e., prices and cost at the date of estimation.
DeGolyer and MacNaughton performed an independent evaluation of approximately 81% of our estimated reserves as of December 31, 2015. The reserves not evaluated by DeGolyer and MacNaughton are in areas where we do not act as operator. The
evaluation covered 100% of the estimated reserves located in areas operated by us. DeGolyer and MacNaughton evaluated the proved oil and natural gas reserve estimates in accordance with Rule 4-10 of Regulation S-X and in accordance with the oil and
gas reserves disclosure provisions of ASC Topic 932. We provided all information required during the course of the evaluation process to DeGolyer and MacNaughtons satisfaction. See the reserves evaluation report by DeGolyer and MacNaughton,
dated January 14, 2016 included as Exhibit 5.1 to this Annual Report.

As of December 31, 2015, 2014 and 2013, 81%, 80% and 73%,
respectively, of our estimated reserves were evaluated by DeGolyer and MacNaughton.

Internal Control over Proved Reserves

The reserves estimation process begins with an initial evaluation of our assets by geophysicists, geologists and engineers. A
Reserves Coordinator (Coordinador de Reservas, or RC) safeguards the integrity and objectivity of our reserves estimates by supervising and providing technical support to technical teams who are responsible for preparing the
reserves estimates. Our technical teams have degrees in geophysics, geology, petroleum engineering and accounting, and are trained internally in reserves estimates seminars. The RC is responsible for consolidating and auditing the reserves
estimation process in compliance with the SEC reserves guidelines. The technical officer primarily responsible for overseeing the preparation of our reserves is a member of the Society of Petroleum Engineers (the SPE), with over 25 years
of experience in exploration and production activities, and has been with PESA for over 25 years. Our reserves estimates are approved by the Oil and Gas Exploration and Production Director and submitted to our Executive Committee.



35



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##### Table of Contents

Most of the reserves estimates related to areas in which we do not act as operator were prepared
by the operators and subsequently reviewed by our petroleum engineers before making the assessment of our proved reserves. The reported hydrocarbon reserves were estimated based on professional, geological and engineering judgment and on information
supplied by us prior to January 14, 2016. Thus they are subject to revisions, upward or downward, as a result of future operations or as additional information becomes available. The estimation of reserves is imprecise due to many unknown
geologic and reservoir factors that can only be estimated through sampling techniques. Since reserves are therefore only estimates, they cannot be appraised for the purpose of verifying exactness.

As of December 31, 2015, our liquid hydrocarbon and natural gas proved developed and undeveloped reserves totaled 183.1 MMboe (66.8 MMboe
of liquid hydrocarbons and 697.4 billion cubic feet, or 116.2 MMboe, of natural gas), representing a 13.1% decrease compared to proved reserves as of December 31, 2014 (a decrease of 21% and 7.8% for liquid hydrocarbons and natural gas,
respectively). During 2015, our fields located in Argentina accounted for revisions of previous estimates representing a decrease of 0.5 MMboe. In addition, a downward revision of 3.9 MMboe was attributable to a greater-than-expected decline in our
reserves held through mixed companies in Venezuela.

Liquid hydrocarbons and natural gas accounted for 37% and 63%, respectively, of our
total proved reserves as of December 31, 2015. Approximately 10% of our total proved reserves as of such date were located outside Argentina.

As of December 31, 2015, proved developed reserves of crude oil equivalent represented 59.4% of our total proved reserves of crude oil
equivalent.

As of December 31, 2015, we had proved reserves equal to seven years of production at 2015 volumes.

The following table sets forth our estimated net proved developed and undeveloped reserves of crude oil and natural gas by country as of
December 31, 2015, including our subsidiaries, joint operations and associates.



|                                                  |  |                                 |    |  |                               |  |     |                         |  |  |     | 
|------------------------------------------------- |  | ------------------------------- | -- |  | ----------------------------- |  | --- | ----------------------- |  |  | --- | 
|                                                  |  | Reserves as ofDecember 31, 2015 |   
|Reserves category                                 |  | Oil(millions ofbarrels)         |    |  | NaturalGas(billion cubicfeet) |  |     | OilEquivalent(MMboe)(1) | 
|PROVED                                            |  |                                 |    |  |                               |  |     |                         |  |  |     | 
|Developed                                         |  |                                 | 47 |  |                               |  | 374 |                         |  |  | 109 | 
|Argentina                                         |  |                                 | 40 |  |                               |  | 366 |                         |  |  | 101 | 
|Venezuela                                         |  |                                 | 7  |  |                               |  | 8   |                         |  |  | 8   | 
|                                                  |  |                                 |   
|PROVED                                            |  |                                 |    |  |                               |  |     |                         |  |  |     | 
|Undeveloped                                       |  |                                 | 21 |  |                               |  | 323 |                         |  |  | 74  | 
|Argentina                                         |  |                                 | 13 |  |                               |  | 314 |                         |  |  | 65  | 
|Venezuela                                         |  |                                 | 8  |  |                               |  | 9   |                         |  |  | 9   | 
|                                                  |  |                                 |    |  |                               |  |     |                         |  |  |     | 
|Total proved reserves (developed and undeveloped) |  |                                 | 68 |  |                               |  | 697 |                         |  |  | 183 | 
|                                                  |  |                                 |    |  |                               |  |     |                         |  |  |     | 



|(1) | Gas is converted to oil equivalent using a factor of 6,000 cubic feet of gas per barrel of oil equivalent.
|--- | ----------------------------------------------------------------------------------------------------------

Reserves calculations are based on forecasts of field production, which depend on a number of technical parameters, such as seismic
interpretation, geological maps, well tests, reservoir engineering studies and economic data. All reserves estimates involve some degree of uncertainty. The relative degree of uncertainty depends primarily on the amount of reliable geological and
engineering data available at the time of the estimate and the interpretation of those data. Our estimates are thus made using the most reliable data at the time of the estimate, in accordance with the best practices in the oil and gas industry.

The statements contained in this Item 4 regarding exploration and development projects and production estimates are forward-looking
and subject to significant risks and uncertainties. Although we believe that these expectations reflected in these forward-looking statements are reasonable, we cannot guarantee that our actual levels of activity, production or performance will meet
these expectations. See Item 3. Key InformationRisk Factors.

The table below sets forth, by geographic area, our total
proved reserves and proved developed reserves of crude oil, condensate and natural gas liquids, and reserves of natural gas, at the indicated dates. This table includes our net share of the proved reserves of our subsidiaries, joint operations and
associates. Our net share of the proved reserves of our unconsolidated investees represented 10% of our total proved reserves as of December 31, 2015.



36



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##### Table of Contents

|                                                                        |  |                                              |         |   |                             |  |        |                |  |  |           |   |  |           |         |   |       |  |         |          |  |  |         |   |  |  |       |  
|----------------------------------------------------------------------- |  | -------------------------------------------- | ------- | - | --------------------------- |  | ------ | -------------- |  |  | --------- | - |  | --------- | ------- | - | ----- |  | ------- | -------- |  |  | ------- | - |  |  | ----- | -
|                                                                        |  | Crude oil, condensate and natural gasliquids |         |   | Natural gas                 |  |        |                | 
|                                                                        |  | Argentina                                    |         |   | Venezuela                   |  |        | Total          |  |  | Argentina |   |  | Venezuela |         |   | Total |  |         | Combined | 
|                                                                        |  | (in thousands of barrels)                    |         |   | (in millions of cubic feet) |  |        | (in MMboe) (1) | 
|Total proved developed and undeveloped reserves as of December 31, 2013 |  |                                              | 60,841  |   |                             |  | 21,424 |                |  |  | 82,265    |   |  |           | 695,287 |   |       |  | 41,473  |          |  |  | 736,760 |   |  |  | 205.1 |  
|Proved developed reserves as of December 31, 2013                       |  |                                              | 43,802  |   |                             |  | 12,448 |                |  |  | 56,250    |   |  |           | 320,642 |   |       |  | 14,848  |          |  |  | 335,490 |   |  |  | 112.2 |  
|Increase (decrease) originated in:                                      |  |                                              |         |   |                             |  |        |                |  |  |           |   |  |           |         |   |       |  |         |          |  |  |         |   |  |  |       |  
|Revisions of previous estimates                                         |  |                                              | (3,053  | ) |                             |  | (1,766 | )              |  |  | (4,819    | ) |  |           | 23,424  |   |       |  | (13,277 | )        |  |  | 10,147  |   |  |  | (3.2  | )
|Improved recovery                                                       |  |                                              | 520     |   |                             |  |       |                |  |  | 520       |   |  |           | 10,817  |   |       |  |        |          |  |  | 10,817  |   |  |  | 2.3   |  
|Extensions and discoveries                                              |  |                                              | 2,955   |   |                             |  |       |                |  |  | 2,955     |   |  |           | 42,076  |   |       |  |        |          |  |  | 42,076  |   |  |  | 10.0  |  
|Purchase of proved reserves in place                                    |  |                                              | 22,713  |   |                             |  |       |                |  |  | 22,713    |   |  |           | 46,975  |   |       |  |        |          |  |  | 46,975  |   |  |  | 30.5  |  
|Sale of proved reserves in place                                        |  |                                              | (3,404  | ) |                             |  |       |                |  |  | (3,404    | ) |  |           |        |   |       |  |        |          |  |  |        |   |  |  | (3.4  | )
|Years production                                                       |  |                                              | (13,957 | ) |                             |  | (1,691 | )              |  |  | (15,648   | ) |  |           | (89,858 | ) |       |  | (591    | )        |  |  | (90,449 | ) |  |  | (30.7 | )
|Total proved developed and undeveloped reserves as of December 31, 2014 |  |                                              | 66,615  |   |                             |  | 17,967 |                |  |  | 84,582    |   |  |           | 728,721 |   |       |  | 27,605  |          |  |  | 756,326 |   |  |  | 210.6 |  
|Proved developed reserves as of December 31, 2014                       |  |                                              | 51,986  |   |                             |  | 9,407  |                |  |  | 61,393    |   |  |           | 356,228 |   |       |  | 15,738  |          |  |  | 371,966 |   |  |  | 123.4 |  
|Increase (decrease) originated in:                                      |  |                                              |         |   |                             |  |        |                |  |  |           |   |  |           |         |   |       |  |         |          |  |  |         |   |  |  |       |  
|Revisions of previous estimates                                         |  |                                              | (3,683  | ) |                             |  | (2,169 | )              |  |  | (5,852    | ) |  |           | 18,910  |   |       |  | (10,414 | )        |  |  | 8,496   |   |  |  | (4.4  | )
|Improved recovery                                                       |  |                                              | 710     |   |                             |  |       |                |  |  | 710       |   |  |           | 27,701  |   |       |  |        |          |  |  | 27,701  |   |  |  | 5.3   |  
|Extensions and discoveries                                              |  |                                              | 4,800   |   |                             |  |       |                |  |  | 4,800     |   |  |           | 74,620  |   |       |  |        |          |  |  | 74,620  |   |  |  | 17.3  |  
|Purchase of proved reserves in place                                    |  |                                              |        |   |                             |  |       |                |  |  |          |   |  |           |        |   |       |  |        |          |  |  |        |   |  |  |      |  
|Sale of proved reserves in place                                        |  |                                              | (4,498  | ) |                             |  |       |                |  |  | (4,498    | ) |  |           | (90,157 | ) |       |  |        |          |  |  | (90,157 | ) |  |  | (19.5 | )
|Years production                                                       |  |                                              | (11,671 | ) |                             |  | (1,226 | )              |  |  | (12,897   | ) |  |           | (79,249 | ) |       |  | (313    | )        |  |  | (79,562 | ) |  |  | (26.2 | )
|Total proved developed and undeveloped reserves as of December 31, 2015 |  |                                              | 52,273  |   |                             |  | 14,572 |                |  |  | 66,845    |   |  |           | 680,546 |   |       |  | 16,878  |          |  |  | 697,424 |   |  |  | 183.1 |  
|Proved developed reserves as of December 31, 2015                       |  |                                              | 39,748  |   |                             |  | 6,623  |                |  |  | 46,371    |   |  |           | 366,331 |   |       |  | 7,955   |          |  |  | 374,286 |   |  |  | 108,8 |  



|(1) | Gas is converted to oil equivalent using a factor of 6,000 cubic feet of gas per barrel of oil equivalent.
|--- | ----------------------------------------------------------------------------------------------------------

The following table sets forth the breakdown of our total proved reserves of liquid hydrocarbons and natural gas into proved developed and
proved undeveloped reserves as of December 31, 2015, 2014 and 2013.



|                            |  |                                     |       |  |                          |  |       |                                     |  |  |                          |  |  |                                     |       |   |                          |  |       |  |  |  |       |  
|--------------------------- |  | ----------------------------------- | ----- |  | ------------------------ |  | ----- | ----------------------------------- |  |  | ------------------------ |  |  | ----------------------------------- | ----- | - | ------------------------ |  | ----- |  |  |  | ----- | -
|                            |  | 2015                                |       |  | 2014                     |  |       | 2013                                | 
|                            |  | Millions ofbarrels of oilequivalent |       |  | % of totalprovedreserves |  |       | Millions ofbarrels of oilequivalent |  |  | % of totalprovedreserves |  |  | Millions ofbarrels of oilequivalent |       |   | % of totalprovedreserves | 
|Proved developed reserves   |  |                                     | 108.8 |  |                          |  | 59.40 | %                                   |  |  | 123.4                    |  |  |                                     | 58.58 | % |                          |  | 112.2 |  |  |  | 54.70 | %
|Proved undeveloped reserves |  |                                     | 74.3  |  |                          |  | 40.60 | %                                   |  |  | 87.2                     |  |  |                                     | 41.42 | % |                          |  | 92.9  |  |  |  | 45.30 | %
|                            |  |                                     |       |  |                          |  |       |                                     |  |  |                          |  |  |                                     |       |   |                          |  |       |  |  |  |       |  
|Total Proved Reserves       |  |                                     | 183.1 |  |                          |  | 100   | %                                   |  |  | 210.6                    |  |  |                                     | 100   | % |                          |  | 205.1 |  |  |  | 100   | %

Estimated reserves were subject to economic evaluation to determine their economic limits. Estimated reserves
in Argentina are stated before royalties since royalties have the same impact as taxes on production and are not paid in kind, and therefore are treated as operating costs. Estimated reserves in Venezuela are also stated before royalties and are
computed by multiplying our ownership in each mixed company by the proved reserves volumes of the relevant mixed company.



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As of December 31, 2015, 59% of our proved reserves were developed, while 41% were
undeveloped. Proved developed reserves were 108.8 million of barrels of oil equivalent. During 2015, we invested U.S.$224 million to convert approximately 19.0 million barrels of oil equivalent of proved undeveloped reserves to proved
developed reserves.

The 15% decrease in our proved undeveloped reserves in 2015 compared to 2014 is mainly attributable to:



| | (1) | the conversion of approximately 19.0 MMboe of proved undeveloped reserves to proved developed reserves, mainly through drilling activities in our production areas in the Neuquén basin;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | extensions and discoveries (mainly in connection with the El Mangrullo Agrio project in the Neuquén basin), which resulted in the addition of 11.0 MMboe of proved undeveloped reserves;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | the sale to CGC of our entire interest in the Austral basin, which resulted in decrease of 5.6 MMboe; and
| | --- | ---------------------------------------------------------------------------------------------------------



| | (4) | partially offset by an increase of 0.7 MMboe of proved undeveloped reserves, based on positive revisions to previous estimates of reserves.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------

The activities described in items (1), (2), (3) and (4) above resulted in a net decrease of 12.9 MMboe in our proved undeveloped
reserves in 2015 compared to 2014.

As of December 31, 2015, proved undeveloped reserves were 74.3 MMboe, all of which correspond to
wells located within one offset of proved developed reserves and gas fields where the activity has been scheduled to maintain production levels in accordance with contracts and installed facilities. The Company plans to put 92% of these proved
undeveloped reserves into production through activities to be implemented over the next five years. Of these reserves, 8% will be developed over periods exceeding five years and are mainly located in gas fields where the activity has been scheduled
to maintain production levels in accordance with contracts and installed facilities.

We have a total of 6.1 million barrels of oil
equivalent of proved undeveloped reserves, all located in Argentina, that have been booked for more than five years. This is because such reserves are mainly located in gas fields where the activity has been scheduled to maintain production levels
in accordance with contracts and installed facilities.

We prioritize the development of new business opportunities associated with
non-conventional gas reserves in Argentina. During 2015, we drilled ten wells in the Río Neuquén area, three wells in the El Mangrullo area and four wells in the Sierra Chata area aimed at developing non-conventional gas reserves in
the Punta Rosada and Mulichinco Reservoirs. We expect to sell the non-conventional gas produced in these areas under the Gas Plus program as approved by the SE.

There are many uncertainties in estimating quantities of proved reserves and in projecting future rates of production and the timing of
development expenditures, including certain factors that are beyond our control. The reserves data set forth in this Annual Report solely represents estimates of our proved oil and gas reserves. Reserves engineering is a subjective process of
estimating underground accumulations of crude oil and natural gas that cannot be precisely measured. The accuracy of a reserves estimate stems from available data, engineering and geological interpretation and judgment of reserves and reservoir
engineering. As a result, different engineers often obtain different estimates. In addition, results of drilling, testing and production subsequent to the date of an estimate may justify revision of such estimate, so the reserves estimates at a
specific time are often different from the quantities of oil and gas that are ultimately recovered. Furthermore, estimates of future net revenues from our proved reserves and the present value thereof are based upon assumptions about future
production levels, prices and costs that may prove to be incorrect over time. Estimates of future prices, costs and production volumes are subject to uncertainties and may prove to be incorrect over time. The meaningfulness of such estimates is
highly dependent upon the accuracy of the assumptions upon which they are based. Accordingly, we cannot provide assurances that any specified production levels will be reached or that any cash flow arising therefrom will be produced. The actual
quantity of our reserves and future net cash flows therefrom may be materially different from the estimates set forth in this Annual Report.

We replace our reserves through the acquisition of producing fields, exploration and by proving up reserves in existing fields.
Proving up is the process by which additional reserves classified as probable and possible reserves in a producing field are accessed and reclassified as proved reserves. We prove up reserves with reservoir
management techniques, such as waterflooding and enhanced oil recovery projects. The reservoir management techniques currently used are water injection and the drilling of horizontal producing and injection wells. Technologies such as 3D seismic
process, horizontal and step out wells, underbalance drilling and reservoir numerical stimulation are also used.



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Sales

The following table sets forth sales for the Oil and Gas Exploration and Production business segment, by geographical area for the fiscal years
ended December 31, 2015, 2014 and 2013:



|                  |  |                         |        |  |      |  |        |      |  |  |       | 
|----------------- |  | ----------------------- | ------ |  | ---- |  | ------ | ---- |  |  | ----- | 
|                  |  | Year ended December 31, |       
|                  |  | 2015                    |        |  | 2014 |  |        | 2013 | 
|                  |  | (in millions of pesos)  |       
|Argentina         |  |                         | 10,331 |  |      |  | 10,361 |      |  |  | 7,649 | 
|Outside Argentina |  |                         | 118    |  |      |  | 192    |      |  |  | 189   | 
|                  |  |                         |        |  |      |  |        |      |  |  |       | 
|Total             |  |                         | 10,449 |  |      |  | 10,553 |      |  |  | 7,838 | 
|                  |  |                         |        |  |      |  |        |      |  |  |       | 

The decrease in sales during 2015 was mainly due to a decline in oil and gas sales volumes, partially offset
by an increase in average gas sales prices. See Item 5. Operating and Financial Review and ProspectsDiscussion of ResultsYear ended December 31, 2015 compared to year ended December 31, 2014Analysis of Operating
Income by Business Segment.

Delivery commitments

We are committed to providing fixed and determinable quantities of crude oil and natural gas in the near future under a variety of contractual
arrangements.

With respect to crude oil, we sell substantially all of our Argentine production to our Refining and Distribution business
segment to satisfy our refining requirements. As of December 31, 2015, we were not contractually committed to deliver material quantities of crude oil to third parties in the future.

As of December 31, 2015, we were contractually committed to deliver 298 MMm3 of natural gas in 2016. According to our estimates as of
December 31, 2015, our contractual delivery commitments which do not extend beyond 2016, could be met with our own production and, if necessary, with purchases from third parties.

OCP

In 2001, the Ecuadorian government
awarded OCP the rights to construction and operation for a 20-year term of the 503 km-long pipeline that runs from the northeastern region of Ecuador to the Balao distribution terminal on the Pacific Ocean coast. As of December 31, 2015, we
held an 11.42% interest in OCP. OCPs other shareholders are Andes Petroleum, Ecuador Ltd., Perenco Ecuador Limited, Occidental del Ecuador Inc., Repsol Ecuador S.A. and AGIP Oleoducto de Crudos Pesados B.V.

The oil pipeline has a transportation capacity of approximately 450,000 barrels per day, of which at least 350,000 barrels per day are
committed under transportation agreements that include a Ship or Pay clause. Because the oil pipeline runs across ecologically sensitive areas, the pipeline was constructed following stringent environmental and technical standards. The construction
of the oil pipeline was completed and it began operations in 2003.

Our subsidiary, EcuadorTLC S.A., entered into a transportation
agreement with OCP that includes a Ship or Pay clause whereby OCP has committed to transport 80,000 barrels per day of our oil for a 15-year term, from November 2003. For a more detailed discussion see Oil and Gas Exploration and
ProductionProductionProduction Outside ArgentinaEcuador.

During 2013, several inconsistent court rulings were
issued in connection with certain interpretative divergences between OCP and the Ecuadorian tax authorities. In 2014, however, the Ecuadorian tax authorities position was confirmed by the Ecuadorian National Court of Justice. OCP filed certain
extraordinary protection petitions with the Ecuadorian Constitutional Court, which were dismissed at the end of 2014.

As of
December 31, 2015, OCP had negative shareholders equity. We have not committed to make capital contributions or provide financial assistance to OCP; therefore our equity interest in OCP was valued at zero in our financial statements as of
and for the year ended December 31, 2015.

Oleoductos del Valle S.A. (Oldelval)

As of December 31, 2015, we held a 23.1% interest in Oldelval, which is the concessionaire of the transportation of crude oil through a
888 km-long oil pipeline between the Neuquén basin and Puerto Rosales (located in the Province of Buenos Aires). Oldelval operates trunk oil pipelines, providing access to the Allen-Puerto Rosales pipeline, with 1,706 km of installed piping.
The concession has a 35-year term, which began in 1993, with an option to extend the term for ten additional years. Oldelvals other shareholders are YPF, Chevron Argentina S.R.L., Pluspetrol S.A., Pan American Energy Ibérica S.L. and
Tecpetrol S.A.

The Allen-Puerto Rosales pipeline has a transportation capacity of approximately 220,000 barrels per day, with one million
barrels of storage capacity.



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During 2015, oil volumes transported by Oldelval from Allen to Puerto Rosales totaled
51.6 million barrels, a 2.9% decrease compared to 2014, mainly due to a decrease in production in the Neuquén basin.

The
applicable laws governing the transportation of hydrocarbons through oil pipelines, which are based on the notion of free access, assign loading preference quotas to pipeline owners based on their shareholdings. Oil transportation rates are set by
the Ministry of Energy and Mining.

Competition

Our oil and gas related businesses are subject to oil price fluctuations determined by international market conditions and internal price
controls, export restrictions and other regulations. In our oil and gas operations in and outside of Argentina, we face competition from oil and gas producers active throughout the world.



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##### Table of Contents

REFINING AND DISTRIBUTION

Our presence in the Refining and Distribution business segment enables us to capitalize on our hydrocarbon reserves. Refining and distribution
operations are a necessary link in the business value chain, starting with crude oil and gas exploration and production and ending with customer service at the gas station network and the supply of petrochemical products.

As of December 31, 2015, our Refining and Distribution operations were based in Argentina, where we operated a refinery and a network of
265 gas stations. Our Ricardo Eliçabe refinery (the Refinery) is located in Bahía Blanca (Province of Buenos Aires). In addition, we have a 28.5% interest in Refinería del Norte S.A. (Refinor).

Our main strategy in the Refining and Distribution segment is to seek profitability through a balanced crude oil refining, logistics and
commercial chain.

Between August 20 and September 30, 2014, our Refinery successfully completed its scheduled plant shutdown
involving the Refinerys processing units, utilities and offsites, to perform general maintenance on the catalytic reformer, hydro-treatment unit, atmospheric distillation unit (topping) and vacuum distillation unit.

On May 2, 2011, we sold our San Lorenzo refinery, its loading and unloading facilities and the associated fuel sales network to Oil
Combustibles S.A. (Oil Combustibles), following an agreement for the sale of such assets approved by the Board of Directors on May 4, 2010. This transaction was consistent with our strategy of assessing our business and asset
portfolio structure on an ongoing basis with a view to identifying opportunities to maximize value for our shareholders. In November 2015, the sale of the San Lorenzo refinery, its loading and unloading facilities and certain associated fuel sales
network to Oil Combustibles was approved by the Comisión Nacional de Defensa de la Competencia(the Argentine Antitrust Commission or CNDC). As of the date of this Annual Report, the sale of the balance associated fuel
sales network, which was owned by our subsidiary, Eg3 Red S.A, remains subject to approval by the CNDC.

The Refining and Distribution Business in
Argentina

In 2015, gasoline and diesel sales volumes in the Argentine fuel market totaled 21.7 million cubic meters, a
3% increase compared to 2014. According to the SE, diesel sales volumes in the domestic market increased by 1.9% to 13.2 million cubic meters as a consequence of an increase in the automotive segment demand.

According to the SE, the gasoline market increased by 5.6% during 2015, with sales volumes totaling 8.5 million cubic meters, mainly
attributable to an increase in the automotive segment demand.

The compressed natural gas (CNG) market totaled
2.9 million cubic meters, a 4.6% increase compared to 2014.

Refining Division

Ricardo Eliçabe Refinery

As of December 31, 2015, our Refinery had a total refining capacity of 30,200 barrels of oil per day. The Refinery is located in the city
of Bahía Blanca, in the Province of Buenos Aires, a strategic location for the reception of crude oil coming through an oil pipeline from the Neuquén basin, for other Argentine crude oil coming by sea from the Golfo San Jorge or Santa
Cruz Sur Basins, and for imports from international markets. With a crude oil processing capacity of approximately 30,200 barrels per day, the Refinery produces a wide variety of products: regular gasoline, premium gasoline and ultra-high octane
gasoline (Podium), diesel, fuel oil, asphalts and liquefied gases (propane and butane).

The Refinery also produces intermediate fuel oil
(IFO) mixes used as fuel in vessels, raw materials for solvents and virgin naphtha for the petrochemical industry. The Refinery has a storage capacity of 480,000 barrels of heavy products and 690,000 barrels of light products.

During 2015, the Refinery processed an average of 28,704 barrels of oil per day, a 6% increase when compared to an average of 27,068 barrels
per day in 2014. During 2015, in addition to the domestic crude oils, our refinery processed successfully several imported crude oils of different qualities.

During 2015, investments in the Refinery were mainly directed to safety and environmental legal compliance and the optimization and revamping
of different refinery areas. These investments included the acquisition of a Vacuum Recovery Unit (VRU) as part of the revamping plan for the truck loading yard, the clean up of waste water treatment tanks, and scheduled shutdowns of processing
units and retrofitting works to loading areas at Puerto Galván. In addition, aerial tanks were repaired.



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Dock Sud Plant

The Dock Sud distribution plant, located in the province of Buenos Aires, close to the city of Buenos Aires, has a total storage capacity of
approximately 1,230,000 barrels of heavy and light products. This plant is connected to the Oiltanking Ebytem terminal in the city of Bahía Blanca through a pipeline.

During 2015, we began revamping the tank yard formerly used for the reception and dispatch of crude oil at Dock Sud terminal, to increase
storage capacity for light fuels.

Caleta Paula Plant

The Caleta Paula plant is our newest distribution plant. It is located in the Province of Santa Cruz, close to the city of Comodoro Rivadavia,
in southern Argentina. The strategic location of this plant significantly improves our logistical capacity in an area distant from refineries. In addition, it allows us to maintain significant stocks of products to satisfy demand in the southern
area of the country for gasoline, diesel and lubricants. The plant is located on the Atlantic coast, and is supplied by vessels and supplemented by truck loading facilities. It has a storage capacity of 82,000 barrels of light products.

In 2015, we continued with tank revamping works at the Dock Sud and Caleta Paula terminals to meet applicable safety and environmental
regulations.

Refining Investment Plans

In 2016, we expect to continue making necessary investments to comply with legal standards applicable to the maintenance of our equipment, and
to improve the reliability of operations, including revamping the tank yard to meet applicable regulations, maintaining reliability and optimizing unit operations by performing facility maintenance works, continuously retrofitting loading points at
Puerto Galván, and scheduled shutdowns of the visbreaking and hydroprocessing units.

In Dock Sud, we expect to make investments to
retrofit the pump room, reservoir and fire system ducts, and to continue tank revamping works to meet applicable regulations and to increase storage capacity for light fuels.

In Caleta Paula, we expect investments to focus on upgrading operations for maintenance and legal compliance, including revamping tanks,
piping and the reverse osmosis plant.

Distribution Division

As of December 31, 2015, our commercial network of gas stations and wholesale customers allowed us to deliver products and services to a
number of regions in Argentina. In recent years, our strategy has been to optimize our customer portfolio, adapt its size to our production capacity, and streamline distribution processes.

As of December 31, 2015, we had a network of 265 gas stations located throughout Argentina, bearing the Petrobras brand name
of which 36 had Spacio 1-branded stores.

During 2015, we continued with our gas pump replacement and CNG compressors upgrade
programs in our gas station network.

In addition, in 2015 we launched the EcoPlus program to renovate our gas station network
and implemented the new EcoPlus facade in several of them. The EcoPlus program meets state-of-the-art standards in energy efficiency and environmental care.

In 2016, we expect to continue with EcoPlus program investments and the replacement of tanks in gas stations throughout Argentina,
the installation of CNG compressor equipment and the refurbishment of stores.

Our points of sale (gas stations) in Argentina as of
December 31, 2015 were as follows:



|               |  |                        |     | 
|-------------- |  | ---------------------- | --- | 
|               |  | As of December 31,2015 |    
|Owned (1)      |  |                        | 79  | 
|Franchised (2) |  |                        | 186 | 
|               |  |                        |     | 
|Total          |  |                        | 265 | 
|               |  |                        |     | 



|(1) | Owned or controlled by PESA under long-term commercial contracts or other types of contractual relationships that secure long-term direct influence over such points of sale.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The term franchised is used to refer to gas stations owned by third parties with whom PESA has signed a franchise agreement that provides PESA with the right (i) to become the gas stations
exclusive supplier and (ii) to brand the gas station with its corporate image. Current laws establish that the term of such contracts should be five years for existing stations and eight years for newly constructed stations.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Our liquid fuels domestic sales totaled 1.29 million cubic meters during 2015. As a result,
our market share in 2015 stood at 5.9%, ranking us fourth in the Argentine market.

Out of 1.29 million cubic meters of total liquid
fuels sold in 2015, 0.84 million cubic meters were diesel, a 7.7% increase compared to 2014, and gasoline sales, in turn, totaled 0.45 million cubic meters, an 8.2% decrease compared to 2014. Our sales of diesel and gasoline represented
6.4% and 5.2%, respectively, of all sales of these products in the Argentine market in 2015. In addition, annual sales of premium gasoline totaled 92.1 thousand cubic meters, which resulted in a 3.9% market share.

Our distribution business also focuses on lubricants. We aim at promoting the Lubrax brand in Argentina through the development of exclusive
lubricant customers, the leveraging of combined sales with liquid fuels and promotions at retail outlets.

In 2015, Lubrax sales in the
Argentine market totaled 16,900 cubic meters, a 5% increase compared to 2014. Our share in the lubricants market in 2015 was 5.5% compared to 5.4% in 2014, with the total market increasing by 1.6% in 2015.

We also sell oil products to the industrial, construction and marine markets. Products sold in these markets include marine fuels and
lubricants, asphalts and other products. Sales volumes in the bunker IFO market declined by 51.8% to 0.5 million cubic meters in 2015. We sold approximately 81,700 cubic meters of IFO Bunker and 13,200 cubic meters of Gas Oil Bunker,
representing a 9.7% and 9.4% market share, respectively. The domestic market for both products contracted by 47.1% compared to 2014, mainly due to domestic refining activities being mostly applied to the production of fuel oil for power plants and
asphalt rather than to the production of IFO Bunker and Gas Oil bunker.

In 2015, we sold 70,000 tons of asphalt, representing a 17.3%
market share. The higher-quality asphalt product, developed since 2011, represented 67% of the supply of asphalt from our Refinery.

The
following table shows production and sales for our consolidated Refining and Distribution segment for the fiscal years ended December 31, 2015, 2014 and 2013:



|                                              |  |                         |        |  |      |  |        |      |  |  |        | 
|--------------------------------------------- |  | ----------------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                              |  | Year Ended December 31, |       
|                                              |  | 2015                    |        |  | 2014 |  |        | 2013 | 
|Average crude oil processed per day (barrels) |  |                         | 28,704 |  |      |  | 27,068 |      |  |  | 28,730 | 
|                                              |  |                         |       
|Production (thousands of tons):               |  |                         |        |  |      |  |        |      |  |  |        | 
|Virgin naphtha                                |  |                         | 10     |  |      |  | 37     |      |  |  | 34     | 
|Diesel                                        |  |                         | 495    |  |      |  | 456    |      |  |  | 485    | 
|Other products                                |  |                         | 867    |  |      |  | 807    |      |  |  | 863    | 
|                                              |  |                         |       
|Sales (in thousands of m3):                   |  |                         |        |  |      |  |        |      |  |  |        | 
|Crude oil                                     |  |                         | 124    |  |      |  | 220    |      |  |  | 284    | 
|Gasoline                                      |  |                         | 564    |  |      |  | 491    |      |  |  | 554    | 
|Diesel                                        |  |                         | 865    |  |      |  | 784    |      |  |  | 782    | 
|Fuel oil/IFO                                  |  |                         | 330    |  |      |  | 315    |      |  |  | 395    | 
|Paraffins                                     |  |                         | 15     |  |      |  | 27     |      |  |  | 20     | 
|Others                                        |  |                         | 237    |  |      |  | 240    |      |  |  | 211    | 
|                                              |  |                         |       
|Sales (in millions of pesos):                 |  |                         |        |  |      |  |        |      |  |  |        | 
|Argentina                                     |  |                         | 11,561 |  |      |  | 10,294 |      |  |  | 7,174  | 
|Outside Argentina                             |  |                         | 532    |  |      |  | 1,182  |      |  |  | 972    | 
|                                              |  |                         |        |  |      |  |        |      |  |  |        | 
|Total sales (in millions of pesos)            |  |                         | 12,093 |  |      |  | 11,476 |      |  |  | 8,146  | 
|                                              |  |                         |        |  |      |  |        |      |  |  |        | 



Refinor

We have a 28.5% interest
in Refinor, whose other shareholders are YPF (50%) and Pluspetrol S.A. (21.5%). Refinor is engaged in crude oil refining, natural gas processing, product transportation, marketing and sales.

Refinor owns the only refinery in the northern region of Argentina, which is located in Campo Durán, in the Province of Salta.
Refinors refining capacity is approximately 26,400 barrels of oil per day and its natural gas processing capacity is 20.4 million cubic meters of gas per day (MMm3/d).



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Refinor owns and operates the following processing plants: an atmospheric distillation unit
(topping), a vacuum distillation unit, a gasoline hydro-treatment unit, a catalytic reformer plant, an isopentane plant using fractional distillation of gasoline turbex (operating since April 2013), two turboexpander and fractioning plants for LPG
production, as well as a plant for the production of auxiliary services (industrial water, steam, electricity, compressed air) used in the different processing plants.

The Campo Durán refinery receives crude oil/condensate and natural gas from the Northwestern Basin and from Bolivia. These operations
are conducted through two oil pipelines and three gas pipelines.

In addition, Refinor operates a 1,109 km-long pipeline running from
Campo Durán (in the Province of Salta) to Montecristo (in the Province of Córdoba) for the distribution of its products. Along the pipeline, the Banda Río Salí (in the Province of Tucumán), Güemes (in the
Province of Salta) and Leales (in the Province of Tucumán) dispatch plants are supplied. This pipeline is the most important distribution channel for liquids generated in the Northwestern Basin in Argentina and transports diesel, virgin
naphtha, motor gasoline, butane and propane.

As of December 31, 2015, Refinor had a commercial network of 65 gas stations located in
the Provinces of Salta, Tucumán, Jujuy, Santiago del Estero, La Rioja, Catamarca and Chaco. Through these gas stations, Refinor sells a high performance fuel line: Refinor 97 (97 octanes), High grade (95 octanes) and Eco Diesel.

In 2015, daily average volumes of crude oil processed totaled 9,075 barrels per day, a 38.4% decrease compared to 2014. During 2015,
443 thousand oil barrels were imported from Bolivia, representing 18% of the volume received in 2014, and the balance was domestic supply.

Sales volumes totaled 637,000 cubic meters per year, a 32% decrease compared to 2014, 518,000 cubic meters of which were directed to the
domestic market and 119,000 cubic meters of which were directed to export markets. During 2015, Refinor had a market share of approximately 26.5% and 17.5% in the motor gasoline and diesel markets, respectively, in the Northwestern region of
Argentina. Refinor remains the company with the second highest number of retail outlets and sales volumes in the Northwestern region of Argentina.

In 2015, Refinor processed an average of 14.7 MMm3/d of gas, a 4% increase compared
to 2014 and produced 298,000 tons of LPG, 6.3% lower than LPG production in 2014.

Sales of LPG totaled approximately 275,000 tons during
the year, a 9% decrease compared to 2014.

The following table sets forth Refinors production and sales for the fiscal years ended
December 31, 2015, 2014 and 2013:



|                                        |  |                         |       |  |      |  |       |      |  |  |       | 
|--------------------------------------- |  | ----------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                        |  | Year ended December 31, |      
|                                        |  | 2015                    |       |  | 2014 |  |       | 2013 | 
|Production (in thousands of
m3):        |  |                         |       |  |      |  |       |      |  |  |       | 
|Gasoline                                |  |                         | 181   |  |      |  | 160   |      |  |  | 173   | 
|Virgin naphtha                          |  |                         | 56    |  |      |  | 285   |      |  |  | 290   | 
|Diesel                                  |  |                         | 185   |  |      |  | 319   |      |  |  | 330   | 
|Natural gasoline                        |  |                         | 87    |  |      |  | 89    |      |  |  | 89    | 
|Propane / butane (in thousands of tons) |  |                         | 298   |  |      |  | 318   |      |  |  | 320   | 
|Other products                          |  |                         | 85    |  |      |  | 78    |      |  |  | 81    | 
|                                        |  |                         |      
|Sales (in thousands of m3):             |  |                         |       |  |      |  |       |      |  |  |       | 
|Gasoline                                |  |                         | 182   |  |      |  | 161   |      |  |  | 172   | 
|Virgin naphtha                          |  |                         | 168   |  |      |  | 380   |      |  |  | 385   | 
|Diesel                                  |  |                         | 197   |  |      |  | 320   |      |  |  | 338   | 
|Propane/butane (in thousands of tons)   |  |                         | 275   |  |      |  | 303   |      |  |  | 298   | 
|Other products                          |  |                         | 90    |  |      |  | 76    |      |  |  | 102   | 
|                                        |  |                         |      
|Sales (in millions of pesos):           |  |                         |       |  |      |  |       |      |  |  |       | 
|Argentina                               |  |                         | 3,564 |  |      |  | 3,207 |      |  |  | 2,212 | 
|Outside Argentina                       |  |                         | 385   |  |      |  | 2,582 |      |  |  | 1,856 | 
|                                        |  |                         |       |  |      |  |       |      |  |  |       | 
|Total sales (in millions of pesos)      |  |                         | 3,949 |  |      |  | 5,789 |      |  |  | 4,068 | 
|                                        |  |                         |       |  |      |  |       |      |  |  |       | 

Competition

Our principal competitors in the Argentine gasoline and diesel markets are YPF, Shell C.A.P.S.A, Axion Energy Argentina S.A. and Oil
Combustibles, which in 2015 had market shares of approximately 58.1%, 15.2%, 14.4%, and 4.4% respectively, according to the SE.



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##### Table of Contents

PETROCHEMICALS

The Petrochemicals business segment is an important component of our business strategy. Our goal in the Petrochemicals business segment is to
maintain our position in the styrenics market by capitalizing on current conditions and maximizing the use of our own petrochemicals raw materials.

As of December 31, 2015, our Petrochemical operations were entirely based in Argentina. We produce a wide array of products, such as
intermediate gasoline, aromatic solvents, hexane and other hydrogenated paraffinic solvents, propellants for the cosmetic industry, monomer styrene, as well as rubber and polymers for the domestic and foreign markets from natural gas, virgin
naphtha, propane and other supplies.

Argentine Operations

In Argentina, we are the only producer of styrene, polystyrene and elastomers, and the only integrated producer of plastics derived from oil
production. As part of our efforts to integrate our operations, we use a substantial amount of styrene for the production of polystyrene and synthetic rubber.

The petrochemicals division has the following plants:



| |  |  | An integrated petrochemicals complex at Puerto General San Martín, in the Province of Santa Fé, with an annual production capacity of 50,000 tons of gases (LPG and propellants), 155,000 tons of aromatics,
290,000 tons of gasoline and raffinate, 160,000 tons of styrene, 58,500 tons of synthetic rubber, 180,000 tons of ethylbenzene and 31,000 tons of ethylene.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A polystyrene plant located in the city of Zárate, in the Province of Buenos Aires, with a production capacity of 65,000 tons of polystyrene and 14,000 tons of bioriented polystyrene (BOPS) per year.
This state-of-the-art BOPS plant is the only one of its type in South America.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | An ethylene plant located in San Lorenzo, Province of Santa Fé, with a production capacity of 19,000 tons per year. It is located along the Paraná river coast, near the Puerto General San Martín
petrochemicals complex, which uses ethylene as raw material for the production of ethylbenzene and styrene.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Styrenics Division

During 2015, we made investments of Ps.127 million, mainly in works related to the scheduled general shutdown, including, among
others. catalyst and furnace tube replacement and compressor manteinance, performed at the Puerto General San Martín complex involving the styrene, ethylbenzene, ethylene plants, and San Lorenzo ethylene plant, the Power Plant and the waste
water treatment plant.

In addition, we made investments in the synthetic rubber unit, investments required for the gasoline reforming
unit shutdown to be performed in 2016, and investments related to HES, maintenance and operational reliability at the styrene, polystyrene and synthetic rubber plants. Investments during 2015 included the assembly of the rubber reverse osmosis
plant, the passing of intelligent tools through ducts, environmental remediation works and energy recovery projects in styrene furnaces.

Monomer styrene sales volumes during 2015 totaled 55.7 thousand tons, remaining stable compared to 2014. A decline in exports to Chile
and Brazil was offset by an increase in domestic market sales of 10% compared to 2014.

In 2015, polystyrene sales volumes totaled
58.8 thousand tons, representing a 19% increase compared to 2014, mainly due to increased domestic sales.

In 2015, sales volumes of
BOPS totaled 7.7 thousand tons, a 15% decrease compared to 2014, driven by a 30% decline in exports partially offset by a 33% increase in domestic sales.

In 2015, sales of synthetic rubber totaled 34.7 thousand tons, of which 22.8 thousand tons were sold in the domestic market and
11.9 thousand tons were sold as exports. Sales volumes in 2015 of synthetic rubber were 13% lower compared to 2014, mainly due to a 32% decline in exports, which was attributable to lower demand in the Brazilian market.

Also in 2015, we continued producing polymers with low aromatic content meeting European regulation standards, in response to our
clients demands.

Reforming Gasoline Division

In 2015, improvements were made to optimize energy consumption and light gas recovery and we invested in maintenance, reliability and legal
compliance works, such as the development of a furnace safety system and aerial tanks were repaired. In 2016, we expect to perform a scheduled plant shutdown of the Gasoline Reforming unit at Puerto General San Martin for maintenance purposes.



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##### Table of Contents

Sales of intermediate gasoline and naptha during 2015 totaled 277 thousand tons, of which
73 thousand tons were directed to the export market. Sales of aromatics and other products during 2015 totaled 64 thousand tons, 69% of which were directed to the domestic market, a percentage similar to that recorded for 2014.

Propellant gas sales totaled 12.2 thousand tons in 2015, accounting for a 21% decrease compared to 2014, attributable to a decline in
sales to the domestic market.

As of December 31, 2015, our estimated market shares of the following products in Argentina were:



| |  |  | Styrene  100%;
| | - |  | ---------------



| |  |  | Polystyrene  80%; and
| | - |  | ----------------------



| |  |  | Styrene butadiene rubber (SBR)  85%.
| | - |  | ---------------------------------------

The following table sets forth
production and sales by major product for the Petrochemicals division in Argentina for the fiscal years ended December 31, 2015, 2014 and 2013:



|                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|---------------------------------- |  | ----------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                   |  | Year ended December 31, |      
|                                   |  | 2015                    |       |  | 2014 |  |       | 2013 | 
|Production (thousands of tons):    |  |                         |       |  |      |  |       |      |  |  |       | 
|Styrene (1)                        |  |                         | 116   |  |      |  | 121   |      |  |  | 122   | 
|Synthetic rubber (2)               |  |                         | 26    |  |      |  | 40    |      |  |  | 49    | 
|Polystyrene                        |  |                         | 59    |  |      |  | 57    |      |  |  | 44    | 
|BOPS                               |  |                         | 8     |  |      |  | 10    |      |  |  | 9     | 
|Naphtha                            |  |                         | 282   |  |      |  | 256   |      |  |  | 281   | 
|Aromatics and other products       |  |                         | 282   |  |      |  | 217   |      |  |  | 183   | 
|                                   |  |                         |      
|Sales (thousands of tons):         |  |                         |       |  |      |  |       |      |  |  |       | 
|Styrene (1)                        |  |                         | 56    |  |      |  | 56    |      |  |  | 68    | 
|Synthetic rubber (2)               |  |                         | 35    |  |      |  | 40    |      |  |  | 50    | 
|Polystyrene and BOPS               |  |                         | 67    |  |      |  | 58    |      |  |  | 59    | 
|Propylene (3)                      |  |                         | 13    |  |      |  | 15    |      |  |  | 19    | 
|Naphtha                            |  |                         | 277   |  |      |  | 255   |      |  |  | 289   | 
|Aromatics and other products       |  |                         | 76    |  |      |  | 76    |      |  |  | 55    | 
|                                   |  |                         |      
|Sales (in millions of pesos):      |  |                         |       |  |      |  |       |      |  |  |       | 
|Argentina                          |  |                         | 3,749 |  |      |  | 3,587 |      |  |  | 2,599 | 
|Outside Argentina                  |  |                         | 760   |  |      |  | 849   |      |  |  | 749   | 
|                                   |  |                         |       |  |      |  |       |      |  |  |       | 
|Total sales (in millions of pesos) |  |                         | 4,509 |  |      |  | 4,436 |      |  |  | 3,348 | 
|                                   |  |                         |       |  |      |  |       |      |  |  |       | 



|(1) | Including ethylbenzene.
|--- | -----------------------

|(2) | Including SBR, NBR and butadiene.
|--- | ---------------------------------

|(3) | Including ethylene.
|--- | -------------------

In 2014, sales for this business segment increased by
Ps.1,088 million, or 32.5%, to Ps.4,436 million from Ps.3,348 million in 2013, primarily as a consequence of a 45% rise in average sales prices, which more than offset an 8.7% decline in volumes sold.

In 2015, sales for this business segment increased by Ps.73 million, or 1.6%, to Ps.4,509 million from Ps.4,436 million in
2014, mainly due to increases in catalytic reformer plant products sales of 17%, primarily naphtha and aromatics, partially offset by a decline in sales of styrenic products of 16% .

Competition

The petrochemicals market in
which we compete is highly cyclical, and world market conditions have a strong impact on our results of operations. We are the only producer of styrene, polystyrene and elastomers in Argentina, but compete with other foreign producers, especially
those located in Brazil.



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GAS AND ENERGY

The Gas and Energy business segment sells gas produced by our Oil and Gas Exploration and Production business segment. We also provide gas and
LPG brokerage and trading services. In addition, through our stake in TGS, we are engaged in the transportation of gas in southern Argentina and in the processing and marketing of NGL. We are a major player in the Argentine electricity market, where
we operate in the generation segment.

In the Gas and Energy segment, our main business objective is to increase profitability in each of
our gas marketing and transportation business, our LPG business and our electricity generation operations.

Gas Marketing and Transportation

We sell gas produced by our Oil and Gas Exploration and Production segment, and purchase gas to supply internal consumption needs. In addition,
we provide gas and LPG brokerage and trading services. We also assist clients in sales, logistics, foreign trade and marketing of gas and LPG.

In 2015, domestic sales of gas produced by us totaled 6.0 MMm3/d. We sold 1.6 MMm3/d under the brokerage modality and purchased 1.1 MMm3/d from third parties to cover our commitments to supply internal consumption. Distribution
was implemented through our own and third parties transport fleets in order to supply clients and secure compliance with undertaken commitments. Our total sales of LPG were 85,600 tons.

We entered into agreements with the Compañía Administradora del Mercado Mayorista Eléctrico S.A.(the wholesale
electric market administration company, or CAMMESA) for the sale of non-conventional gas from the El Mangrullo area in 2011 and the Río Neuquén area in 2012 under the Gas Plus modality. We renewed each of these agreements
in July 2015. See Regulation of Our BusinessArgentine Regulatory FrameworkAdjustment of Natural Gas Price at Wellhead.

In 2015, we continued to sell butane in trucks to the domestic market. In 2015, we sold approximately 42,600 tons. As in 2014, in 2015, we
complied with the requirements imposed by the SE as to butane supply to the domestic market from the Refinery. Changes in the domestic price policy for both committed and free availability volumes in April 2015 resulted in an improvement in butane
sales margins thereafter.

In February 2013, the Commission issued Resolution No. 1/2013 establishing the Stimulus Program for
Surplus Injection of Natural Gas (Gas Program I). Under such program, producers were required to submit projects to increase natural gas injection for a maximum period of five years, with a view to increasing production and achieving
higher activity and employment levels in the sector. A price of U.S.$7.50/MMBTU was established for natural gas excess injection, with penalties involving LNG imports in the case of non-compliance with committed volumes.

In turn, in November 2013, through Resolution No. 60/2013 (modified in March 2014 by Resolution No. 22/2014), the Commission created
the Stimulus Program for Surplus Injection of Natural Gas for Companies with Reduced Injection (Gas Program II). Producers were required to submit projects to increase natural gas production levels on or prior to April 30, 2014.
Such program was directed to companies without previous production or with a maximum production of 4 MMm3/d, with price incentives in the case of production increases and penalties involving LNG
imports in the case of non-compliance with committed volumes. Moreover, companies eligible for the Gas Program I and meeting the relevant requirements were entitled to request withdrawal from Gas Program I and admission to Gas Program II.

In August 2014, the Ministry of Economy and Public Finance, through Resolution No. 139/2014, introduced additional changes to Resolution
No. 60/2013, including, among others, the elimination of the previous injection limit and the introduction of two annual registration periods. We requested to participate in this program and were registered through Resolution No. 13/2015
issued by the Secretary of Economic Policy and Development Planning of the Ministry of Economy and Public Finance. See Regulation of Our BusinessArgentine Regulatory FrameworkAdjustment of Natural Gas Price at Wellhead.

In 2015, we benefitted from higher natural gas revenues through the compensation scheme established by the Gas Program II. Price
incentives contemplated in that program were made applicable retroactively as from July 2014.



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Gas Transportation  TGS

Our Interest in TGS and Corporate Developments

We indirectly hold a 25.5% interest in TGS. TGSs controlling shareholder is Compañía de Inversiones de Energía
S.A.(CIESA), which as of the date of this Annual Report holds 51% of TGSs capital stock. The ANSES holds 23.11% and the remaining 25.89% of TGSs capital stock is publicly held. TGSs shares are listed on the Buenos
Aires Stock Exchange and on the NYSE, in the form of ADSs. PESA has an interest of 50% in CIESA (directly and indirectly through our subsidiary Petrobras Hispano Argentina S.A. (Petrobras Hispano)), 40% is held by a trust whose trustee
is The Royal Bank of Scotland N.V. Sucursal Argentina (the Trust) and the remaining 10% is held by PEPCA S.A. (formerly, Enron Pipeline Company Argentina S.A., or EPCA), which was acquired by Pampa Inversiones S.A. (together
with Pampa Energía S.A., the Pampa Group) on April 8, 2011.

CIESAs and TGSs current equity ownership
reflects the implementation of the first stage of the master settlement agreement and the mutual release agreement, signed by PESA and certain subsidiaries of Enron Creditors Recovery Corp. (Enron, formerly Enron Corp.) on April 16,
2004 (the Master Settlement Agreement), in connection with the restructuring of CIESAs indebtedness. CIESAs board of directors includes three members nominated by us, two by the Trust and one by PEPCA. TGSs board of
directors is composed of nine members, six nominated by CIESA and three independent members. Pursuant to a shareholders agreement entered into on August 29, 2005 (the Shareholders Agreement) among PEPCA, the Trust and
us, we have the right to appoint the chairmen of the boards of directors of both TGS and CIESA and the chief executive officer of TGS.

Following the enactment of the Public Emergency Law in Argentina, CIESA and TGS both defaulted on their debt during 2002. In 2004,
CIESAs shareholders entered into an agreement that, among other things, provided for certain stock transfers in order to create the necessary flexibility to restructure CIESAs financial debt and TGS successfully restructured
substantially all of its debt. Subsequently, on September 1, 2005 CIESAs shareholders and financial creditors entered into the CIESA Restructuring Agreement. Since January 2009, while approval of the CIESA Restructuring
Agreement by the authorities has been pending, several legal claims involving Ashmore Energy International Limited (AEI), CIESA and others were filed before the courts of the State of New York in the United States of America.

On May 10, 2011, CIESA entered into a Memorandum of Understanding with the Pampa Group, the holder of the 1997 CIESA Notes as successor
to AEI and on May 18, 2011, CIESA, Pampa Group and PESA excecuted a fourth amendment to the CIESA Restructuring Agreement providing for the replacement of AEI with the Pampa Group as a party to the agreement. On October 5, 2011, by note
No. 11,362, the Ente Nacional Regulador del Gas (Argentine Gas Regulatory Agency, or ENARGAS) expressed no regulatory objections to the CIESA Restructuring Agreement, which would become effective after obtaining approval from
the CNDC. As of the date of issuance of this Annual Report, the CIESA Restructuring Agreement remains subject to approval by the CNDC.

On
July 13, 2012, CIESA, Pampa Group and PESA entered into a settlement agreement whereby all parties involved waived all claims, title and interest in the lawsuit before the New York State Courts and terminated the same. As a result of the
agreement, CIESA paid off all of its financial debt by means of (i) the transfer to Pampa Group of 4.3% of TGSs shares; (ii) a cash payment of approximately U.S.$130 million; (iii) the release of the remaining financial debt;
and (iv) execution on July 13, 2012 of a fifth amendment to the CIESA Restructuring Agreement whereby, upon obtaining governmental approval, Pampa Group will receive additional shares representing 40% of CIESAs capital stock which
are currently held in trust by The Royal Bank of Scotland N.V. Sucursal, Argentina. As a result of the full settlement of CIESAs financial debt, in the third quarter of 2012, we recorded a gain of Ps.291 million attributable to our equity
interest in CIESA and in 2013 CIESA notified the CNV of the formal cancellation of the 1997 CIESA Notes. On May 30, 2013, the CNV approved CIESAs withdrawal from public offering and listing through Resolution No. 17,904.

In order to improve the maturity profile of TGSs financial debt, in January 2014, TGS launched an offer for a voluntary exchange of the
2007 Notes (maturing between 2014 and 2017). To this end, on January 3, 2014, the CNV issued Resolution No. 17,262. TGSs offer was taken up by holders of approximately 67% of the 2007 Notes, who received new TGS notes maturing
between 2014 and 2020.

On March 9, 2016, Pampa Energía S.A. announced that its board of directors approved to initiate
negotiations for the potential sale of its indirect interest in TGS. On April 22, 2016, Pampa Energía S.A. announced that it had agreed to conduct exclusive negotiations for 45 days with Harz Energy, a subsidiary of Neuss Group, for the
sale of the stake and rights that it holds, directly or indirectly, in TGS.



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TGS Business

TGS began operations in late 1992 as a part of the privatization of the Argentine energy sector. Currently, TGS is the leading gas
transportation company in Argentina, delivering about 73% of total gas transported in Argentina during 2015. TGS is also one of the leading NGL producers and traders, in both the domestic and international markets, and an important provider of
midstream services, including business structuring, turnkey construction and operation and maintenance of facilities used for gas storage, conditioning and transportation.

PESA provides services to TGS for the operation and maintenance of the gas transportation system and related facilities and equipment, to
ensure that the system performance is in conformity with international standards and in compliance with certain environmental standards.

The following chart shows statistical information relating to TGSs business segments for the fiscal years ended December 31, 2015,
2014 and 2013.



|                                    |  |      |       |   |      |  |       |      |  |  |       |  
|----------------------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                    |  | 2015 |       |   | 2014 |  |       | 2013 | 
|Regulated Segment:                  |  |      |       |   |      |  |       |      |  |  |       |  
|Average firm committed capacity (1) |  |      | 80.6  |   |      |  | 80.4  |      |  |  | 82.5  |  
|Average daily deliveries (1)        |  |      | 66.0  |   |      |  | 65.4  |      |  |  | 65.9  |  
|Annual load factor (2)              |  |      | 82    | % |      |  | 81    | %    |  |  | 80    | %
|Unregulated
Segment:                |  |      |       |   |      |  |       |      |  |  |       |  
|Liquids total production (3)        |  |      | 924.2 |   |      |  | 969.9 |      |  |  | 910.4 |  
|Processing capacity at year end (1) |  |      | 46.0  |   |      |  | 46.0  |      |  |  | 46.0  |  



|(1) | In MMm3/d.
|--- | ----------

|(2) | Corresponds to the quotient of the average daily deliveries and the average firm contracted capacity.
|--- | -----------------------------------------------------------------------------------------------------

|(3) | In thousands of tons.
|--- | ---------------------

Regulated Energy Segment of TGS

TGS has a gas transportation license in southern Argentina, and is the largest transporter of natural gas in Argentina and all of Latin
America. TGSs pipeline system connects Argentinas southern and western gas reserves with the main consumption centers in those regions, including greater Buenos Aires. TGS has an exclusive license for the use of the southern gas
transportation system, which expires in 2027, with an option to extend it for ten additional years if certain conditions are met.

TGS
transports gas through more than 9,184 km of pipelines, of which almost 7,637 km belong to TGS, with a firm contracted capacity as of December 31, 2015 of 80.6 MMm3/d. Pursuant to these
contracts, the capacity is reserved and paid for irrespective of the actual use by customers. Almost all capacity of the gas transportation pipelines in Argentina is currently apportioned among gas distribution companies, large industrial customers
and gas-fired power plants under firm long-term transportation contracts. The total average life of TGSs firm transportation contracts is approximately nine years. In addition, TGS provides interruptible transportation services under which gas
transportation is dependent on the availability of excess capacity.

Transportation services begin with the receipt of gas owned by a
shipper (e.g., distribution companies, producers, traders or large users) at one or more reception points. It is then transported and delivered to designated delivery points along the system. The total service area includes approximately
5.9 million end users, approximately 4.0 million of which are in greater Buenos Aires. Direct services to residential, commercial and industrial users, and electric power plants, are mainly provided by four gas distribution companies,
which are connected to the TGS gas pipeline system: Metrogas S.A., Gas Natural Ban S.A., Camuzzi Gas Pampeana S.A. and Camuzzi Gas del Sur S.A. Some important industries and electric power plants are also located within TGSs operational area
and are provided with direct gas transport services by TGS.

TGS has made significant investments in its business since the privatization.
As a result, compression power has been increased from 429,030 horsepower (HP) in 1992 to 766,110 HP in 2015, and contracted firm transportation capacity has been increased from 42.9
MMm3/d in 1992 to 80.6 MMm3/d by the end of 2015.

Tariff Renegotiation Process

As a consequence of the Public Emergency Law that pesified and prohibited the increase of tariffs, revenues from the regulated energy segment
declined considerably. The gas transportation segment represented 24%, 17% and 23% of the total revenues of TGS in 2015, 2014 and 2013, respectively, while from the time of TGSs privatization through 2001, revenues for this segment represented
approximately 80% of TGSs total annual revenues. TGS is still engaged in discussions with the Argentine government regarding the renegotiation of its tariffs. As a result, and despite contracted capacity increases and trasitional price
adjustments, the profitability of the regulated business has not yet been fully restored.

The Ministry of Economy created the UNIREN in
July 2003 for the purpose of assisting in the renegotiation process. On February 16, 2016, the new administration, through Decree No. 367/16, dissolved the UNIREN and transferred the responsibility of renegotiating public service
agreements to the ministries with jurisdiction over the relevant activity (in the case of TGS, the Ministry of Energy and Mining) acting jointly with the Ministry of Economy and Public Finance.



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Provisional agreement

After UNIREN had submitted to TGS two proposals for tariff adjustment during 2005, in October 2008 TGS entered into a provisional agreement
with UNIREN, which provided for a 20% tariff increase to be retroactively applied as from September 1, 2008. On December 3, 2009, the Argentine government issued Decree No. 1,918/09 ratifying the provisional agreement. As a result,
TGS was to invoice the tariff increase to its customers once ENARGAS had published the new tariff schedule and defined the billing method for the retroactive effect. In light of ENARGASs delay in completing this administrative step, in August
2010, TGS sent a letter to ENARGAS requesting authorization to publish the new tariff schedule including the 20% provisional tariff increase, the method for collection of the retroactive increase and the application of an interest rate in accordance
with the payment terms to be defined. ENARGAS replied to TGS that it had forwarded the background information and the tariff project to the Secretaría de Coordinación y Control de Gestión(the SCyCG), in
compliance with Resolution No. 2,000/05 issued by the Ministry of Federal Planning.

On September 30, 2010, TGS filed a summary
action for the protection of its constitutional rights (acción de amparo) against ENARGAS and the SCyCG seeking the implementation of the new tariff schedule. Pursuant to a favorable decision of November 5, 2010, affirmed by the
Court of Appeals on April 5, 2011 and by the Supreme Court on November 28, 2013, the 2008 provisional agreement was finally implemented in April 2014.

On April 7, 2014, the ENARGAS issued Resolution No. 2,852/14 defining the new tariff schedules that included an increase in the rate
applicable to natural gas transportation. The increase in the rate was set forth in three stages, as follows: 8% from April 1, 2014, 5.5% from June 1, 2014 and 5.3% from August 1, 2014, reaching a cumulative increase of 20%.

On September 19, 2014, TGS filed an appeal requesting ENARGAS to implement the retroactive increase provisions of the 2008 provisional
agreement, which was rejected on the ground that after the issuance of Resolution No. 2,852/14, ENARGAS had complied with its obligations under Decree No. 1,918/09. In April 2015, TGS appealed such rejection, which was confirmed on
November 18, 2015 by the Supreme Court.

On December 19, 2014, in light of the delay in the complete implementation of Decree
No. 1,918/09, TGS filed administrative claims for damages resulting from the ENARGAS failure to: (i) implement the retroactive increase provisions of the 2008 provisional agreement for the period between September 1, 2008 and
March 31, 2014 and (ii) adjust the charge for Access and Use (CAU).

On June 5, 2015, the ENARGAS issued
Resolution No. 3,347, complementary to Resolution No. 2,852/14, defining an increase in the tariff schedules applicable to natural gas transportation as from May 1, 2015, which represented a temporary increase of 44.3% in the price of
natural gas transportation and 73.2% in the CAU.

These transitional adjustments were made in advance of future increases pursuant to the
comprehensive renegotiation process. Pursuant to Resolution No. 31/16 of the Ministry of Energy and Mining, TGS and the ENARGAS are expected to conclude the renegotiation process within twelve months following the issuance of Resolution
No. 3,724/16.

On March 31, 2016, the ENARGAS issued Resolution No. 3,724, which approved the tariff schedule applicable as
from April 1, 2016, including the CAU for the Natural Gas Transportation business segment, which represented a 200.1% increase. This increase is associated with the implementation of a Mandatory Investment Plan to be fulfilled by TGS between
April 2016 and March 2017, involving future capital expenditures of Ps.794.3 million to be overseen by the ENARGAS. Futhermore, TGS shall submit evidence of compliance with such Mandatory Investment Plan to obtain ENARGASs prior authorization
to distribute dividends.

These increases represent a partial recognition of TGS prior administrative claims, and as such, TGS will
continue with all legal actions initiated until it obtains full enforcement of its rights, including those necessary to accomplish the execution of the Comprehensive Agreement.

Comprehensive agreement

In early October 2008, TGS received from UNIREN a proposal for a comprehensive agreement (which included an initial tariff increase of 20%),
which was not accepted by TGS. In October 2011, TGS received another proposal from UNIREN including similar terms and conditions to those included in the 2008 proposal for a comprehensive agreement. In August 2011, TGSs board of directors
approved the new proposal, allowing UNIREN to initiate the relevant administrative procedure to finalize the renegotiation agreement. On December 29, 2014 TGS filed an administrative appeal under the terms of section 30 of the National
Administrative Procedures Act seeking damages for the failure to implement the comprehensive agreement.



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In October 2015, TGS and UNIREN, signed a new version of the Comprehensive Agreement that
incorporated the terms of Resolution No. 3,347. The sustainable recovery of the natural gas transportation business, which is strategic for the development of the Argentine economy, will depend on the effective implementation of the
comprehensive renegotiation agreement.

On February 16, 2016, the new administration, through Decree No. 367/16, dissolved the
UNIREN and transferred the responsibility of renegotiating public service agreements to the ministries with jurisdiction over the relevant activity. It also empowered such ministries jointly with the Ministry of Economy and Public Finance to
conclude any partial renegotiation agreements and temporary price and tariff adjustments that may be necessary to ensure the continuity of the normal provision of the corresponding public services, until the completion of the comprehensive
renegotiation process, which shall be effected as an advance of future increases pursuant to the comprehensive tariff review. The Ministry of Energy and Mining, together with the Ministry of Economy and Public Finance, assumed UNIRENs
responsibilities with regard to TGSs renegotiation process.

Pursuant to Resolution No. 31/16 of the Ministry of Energy and
Mining, TGS and the ENARGAS are expected to conclude the renegotiation process within twelve months following the issuance of Resolution No. 3,724/16, on March 31, 2016.

TGS Non-Regulated Businesses

In addition to the regulated segment of natural gas transportation, TGS is one of the leading processors of natural gas and one of the largest
traders of NGL in Argentina. NGL production and distribution involves the extraction of ethane, propane, butane, and natural gasoline from the gas flow that arrives to the General Cerri complex, located near Bahía Blanca, in the Province of
Buenos Aires, which is connected to TGSs main pipelines. TGS has two gas processing plants at the General Cerri complex: (1) an ethane, propane, butane and natural gasoline turbo expander separating plant and (2) an absorption plant
which extracts propane, butane and gasoline from the gas transported through TGSs pipeline system, with a gas processing capacity of 46 MMm3/d and a storage capacity of 54,840 tons. After
extraction, TGS sells these products in the domestic and international markets. TGS also stores and ships the products at facilities located in Puerto Galván. These activities are not regulated by ENARGAS.

NGL production and distribution net revenues accounted for approximately 69%, 75% and 72% of TGSs net revenues in 2015, 2014 and 2013,
respectively. TGSs operations have benefited from rises in the international price of NGL and natural gasoline experienced during recent years, which permitted higher revenues principally from exports until the decline in international prices
since the second half of 2014. NGL production in 2015, 2014 and 2013 totaled 924,176 tons, 969,920 tons and 910,400 tons, respectively.

TGS sells its NGL to Geogas Trading under an export agreement entered into on October 27, 2015, following a private bidding process which
provided for a lower price per ton for products sold compared to the prior export agreement. The contract provides for monthly sales of approximately 25,353 short tons (a unit of weight equal to 2,000 pounds or 907.2 kilograms) of propane and 11,023
short tons of butane at the price quoted in Mont Belvieu, Texas, plus a fixed charge per ton. The contract expires on April 30, 2016. TGS will submit new bids to various customers for new agreements for the September 2016-April 2017 period to
replace the existing seasonal contract. For the period from March through September of each year, TGSs sales of NGL are mainly in the domestic market, due to restrictions on natural gas processing and to governmental requirements to supply the
domestic market.

Regarding natural gasoline exports, during 2015 TGSs main customers were Petrobras, Trafigura Pte Ltd. and Braskem
Netherlands BV. Prices in 2015 were lower than in previous years as a result of lower demand from emerging markets and higher supply surplus as a consequence of the increase in production levels following the development of shale gas fields in the
United States. In January 2016, TGS entered into a one year term supply agreement with Petrobras. This agreement contemplates the delivery of 110,230 short tons at international prices minus a discount per sold ton. Selling prices are calculated on
the basis of the NWE ARA price less a fixed discount per ton. This contract was entered into on market terms according to the analysis and conclusions of TGSs audit committee.

Ethane has been sold to PBB-Polisur S.A. (PBB), an Argentine polyethylene producer, under a ten-year agreement that expired on
December 31, 2015. The minimum volume of ethane that TGS had committed to sell to PBB was 370,373 short tons per year. During 2015 and 2014, PBB did not comply with the minimum purchase volume committed, and compensated TGS for the breach. The
price was initially fixed through December 31, 2007. Since then, at the beginning of each year the price was subject to an annual adjustment based on various factors, including the producer price index (which variation cannot be higher than
1% per year), the natural gas price, the quality of the ethane shipped by TGS and the transportation tariffs and charges. From 2008 to 2013, prices increased by 22.4%, 9.0%, 5.0%, 6.6%, 9.0% and 11.9% compared to the prior year, respectively.
In 2014, the price increased by 4.3% compared to 2013. Due to stable market conditions, the selling price for 2015 was similar to the 2014 selling price.

After expiration of the agreement on December 31, 2015, PBB and TGS agreed on two short-term extensions. The first one expired on
March 1, 2016, and the second one will expire on April 30, 2016. Under these extensions, TGS agreed to new prices and quantities of ethane to be supplied to PBB. The new prices may also be adjusted in case of market variations of natural
gas prices. The minimum volume of ethane commited under the extension is 25,363 short tons per month. TGS is currently negotiating a new agreement for future ethane sales to PBB.



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Competition

TGSs gas transportation business, which provides an essential service in Argentina, faces only limited direct competition. In view of the
characteristics of the market in which TGS operates, it would be very difficult for a new entrant in the transportation market to pose a significant competitive threat to TGS, at least in the short to medium term. In the longer term, the ability of
new entrants to successfully enter TGSs market would depend on a favorable regulatory environment, an increasing and unsatisfied demand for gas by end users, and sufficient investment in gas transportation to accommodate delivery capacity from
the transportation systems.

On a day-to-day basis, TGS competes, to a limited extent, with Transportadora de Gas del Norte S.A. for
interruptible transportation services and for new firm transportation services made available as a result of expansion projects from the Neuquén basin to the greater Buenos Aires area. Interruptible transportation services accounted for 10%
of TGSs regulated business net revenues for 2015. The relative volumes of such services will depend mainly upon the specific arrangements between buyers and sellers of gas in such areas, the perceived quality of services offered by the
competing companies, and the applicable rate for each company.

With respect to NGL processing activities, TGS competes with
Compañía MEGA S.A., which owns a gas processing plant in the Neuquén basin and has a processing capacity of approximately 36 MMm3/d. Our controlling shareholder, Petrobras,
has a 34% interest in Compañía MEGA S.A.

Electricity

In the electricity business, we are active in generation and, to a lesser extent, in transmission activities, and are positioned as a major
player in the Argentine electricity market.

We conduct electricity generation activities through the Genelba thermal power plant and the
open cycle gas-fired turbine (Genelba Plus) in the Province of Buenos Aires, the Pichi Picún Leufú Hydroelectric Complex (HPPL) in the Comahue region, on the Limay River, in the Province of Neuquén and
the Ecoenergía thermal power plant (Ecoenergía) located in Bahía Blanca in the Province of Buenos Aires. In addition, in the transmission business segment, we hold an equity interest in Enecor S.A.
(Enecor).

On January 30, 2013, we agreed to sell our direct and indirect interest in Distrilec to Hidroeléctrica
Piedra del Águila S.A. and La Plata Cogeneración S.A. for U.S.$35 million, thereby withdrawing from the electricity distribution business.

The Argentine Electricity Market

In the early 1990s, as part of a general state reform and privatization plan, the Argentine government carried out an overall restructuring of
the electricity sector and allowed for greater private sector participation. The Argentine electricity system had previously been characterized by the inability to meet short- and long-term demand and low service quality, with limited capacity on
the part of the state to make necessary investments.

The regulatory framework and business environment changed in 2002, shifting to a
greater role for the government in the economy, including the electricity market.

For the ten years prior to 2009, electricity demand in
Argentina increased at an average rate of 4.6% per annum, exceeding the growth in GDP for the same period. However, during 2009, demand decreased mainly as a consequence of the drop in industrial activity levels and moderate temperatures during
the year that resulted in reduced consumption by the residential sector. In 2009, demand decreased 1.3%, but recovered in 2010 growing 5.9%. During 2011, electricity demand increased at a rate of 5.2%. This positive variation was mainly driven by
industrial consumption throughout the year, accounting for 6.5% growth. Residential demand, in turn, also showed an increase of 5.2%. In 2012, demand continued to increase at a rate of 4.1%, thanks to the good performance shown by residential
demand. In 2013, demand grew 3.3%, reaching 125,166 gigawatt hours (GWh), as a result of 5.3% growth in residential consumption and 0.4% growth in the industrial sector. In 2014, electricity demand grew by 1.0% compared to 2013, mainly
as a result of an increase of approximately 2.0% in residential demand while industrial consumption remained stable. Demand for energy continued to grow throughout 2015, at a rate of 4% compared to 2014. This increase was mainly driven by
residential demand, which grew by 8% compared to 2014. The increase in demand from the industrial sector was 2% compared to 2014. In 2015, a new energy consumption record was reached. Supply to the system came from increased thermal generation
derived from the addition of new generation facilities, larger hydroelectric resources, higher nuclear generation and the consumption of the system reserves.

Total electricity generation in Argentina during 2015, including imports and exports, totaled 136,798 GWh, out of which 63% was attributable
to thermoelectric plants, 30% to hydroelectric plants, 5% to nuclear plants and 2% other sources.



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Electricity Generation: Genelba, HPPL and Ecoenergía

Genelba is a 674 MW combined cycle gas-fired generating unit located at the central node of the Argentine electricity network, in Marcos Paz,
about 50 km away from the City of Buenos Aires.

Genelba, which commenced commercial operations in February 1999, has two gas-fired
turbines that receive gas through an 8 km duct connected to the transportation system operated by TGS. The electricity produced at Genelba is distributed via the national grid through a connection to the Ezeiza transforming station located only 1 km
away from Genelba.

The allocation of electricity dispatched to the wholesale electricity market (the MEM), even though such
electricity is produced for the spot market, it is subject to market rules based on the lowest variable cost of electricity generation. See Regulation of Our BusinessArgentine Regulatory FrameworkElectricity. Since
Genelba uses combined cycle technology for a natural gas-fired power plant, our short-run variable cost is expected to be lower than the cost of most other thermoelectric power plants, granting significant competitive advantages to Genelba.
Therefore, CAMMESA is expected to dispatch Genelbas generating capacity before that of most other thermoelectric plants. Genelba stands out in the Argentine electricity market for its high reliability and efficiency. The plant is recognized as
one of the combined cycle electric power plants with the highest availability in Argentina.

During 2007, our Board of Directors approved
the construction of the new Genelba Plus open cycle gas-fired turbine. In 2009, we completed construction works in connection with the new plant, which added 165 MW to the system. This thermoelectric plant is close to the existing Genelba plant and
started its commercial operations in August 2009. We use this unit to meet increased demand for electricity from our clients under supply agreements for large users in the MEM under the Energy Plus (Energía Plus) program (SE Resolution
No. 1,281/06).

During 2011, we completed the construction of Ecoenergías 14MW power plant, located at TGSs
General Cerri complex and obtained authorization for commercial operations. Thereafter, in 2012, we obtained authorization to operate the plant under the Energy Plus program.

We were awarded a 30-year concession for hydroelectric power generation at HPPL beginning in August 1999. The complex has three electricity
generating units with an installed capacity of 285 MW. Pursuant to our concession contract and applicable laws, as from August 2002 we paid 1% in hydroelectric royalties, with scheduled annual increases of 1% per year until royalties reached a
cap of 12%, based upon the tariff rate applied to block sales of the electricity sold. As of December 31, 2015, we paid the maximum rate of hydroelectric royalties at a rate of 12%. In addition, we pay the Argentine government a monthly fee for
the use of the water source amounting to 0.5% of the same amount used for the calculation of hydroelectric royalties.

During 2015, the
Genelba thermoelectric plant generated 5,133 GWh of electricity, of which 4,723 GWh were generated in combined cycle and 410 GWh were generated by the new Genelba Plus power plant. The combined generation by Genelba and Genelba Plus represented 4.4%
of total power generation and 7% of thermal generation in Argentina during 2015.

The Genelba combined cycle and Genelba Plus gas turbine
operated with a 92.7% and a 98.7% availability factor, respectively, during 2015. The reliability factor was 99.5% for the combined cycle and 100% for the new Genelba Plus gas turbine.

In addition, HPPL generated 965 GWh of electricity, with a 94.9% availability factor and a 100% reliability factor. HPPL generated
approximately 1% of total power generation in Argentina and 2% of total hydraulic generation in Argentina for 2015. The 965 GWh of electricity generated represented an increase of 16% in comparison to 2014 due to higher incoming water flow from the
Rio Limay and Collón Cura rivers.

During 2015, Genelba and HPPL together accounted for approximately 5% of the power generated in
Argentina. The operation of both generating units minimizes income volatility.

During 2015, Ecoenergía had its third full year of
operation under the Energy Plus regulatory framework. Ecoenergías annual generation was 100 GWh, its availability factor of 95.9% and reliability factor of 96.8%.

The following chart details energy generation and sales figures for Genelba, HPPL and Ecoenegía for the fiscal years ended
December 31, 2015, 2014 and 2013:



|                             |  |                         |       |  |      |  |       |      |  |  |       | 
|---------------------------- |  | ----------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                             |  | Year ended December 31, |      
|                             |  | 2015                    |       |  | 2014 |  |       | 2013 | 
|Power Generated (in GWh)     |  |                         | 6,198 |  |      |  | 5,776 |      |  |  | 6,414 | 
|                             |  |                         |      
|Power Sold (in GWh):         |  |                         |       |  |      |  |       |      |  |  |       | 
|Forward market               |  |                         | 853   |  |      |  | 1,054 |      |  |  | 2,023 | 
|Spot market                  |  |                         | 6,116 |  |      |  | 5,583 |      |  |  | 5,725 | 
|                             |  |                         |       |  |      |  |       |      |  |  |       | 
|Total sales                  |  |                         | 6,969 |  |      |  | 6,637 |      |  |  | 7,748 | 
|                             |  |                         |       |  |      |  |       |      |  |  |       | 
|Sales (in millions of pesos) |  |                         | 1,685 |  |      |  | 1,412 |      |  |  | 1,366 | 
|                             |  |                         |       |  |      |  |       |      |  |  |       | 



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Electricity Transmission: Enecor

Enecor is an independent electricity transmission company. We own 69.99% of Enecor, and Impregilo International Infrastructures N.V. owns the
remaining interest. Enecor has a 95-year concession, expiring in 2088, to construct, operate and maintain approximately 22 km of electricity lines and a 500 Kilovolt (Kv)/132 Kv transforming station in the Province of Corrientes. Under
the concession contract, 700,000 Class A shares of Enecor are pledged in favor of the Province of Corrientes.

Competition

We compete in both the spot and futures markets, with competitors such as Endesa Costanera, Central Puerto, AES and the Pampa Group, among
others. In addition, in the Gas Plus market, where most of our energy is sold under term contracts, we compete with the Pampa Group, Grupo Albanesi and AES, among others.

INSURANCE

Our insurance policy principally focuses on the concentration of risks and the importance and replacement value of assets. Under our risk
management policy, our principal assets, such as oil and gas facilities, refineries, petrochemical plants and power generation plants are insured for their replacement value.

We insure against material damages, control of wells (especially where we have gas production), and third-party liability, including marine
liabilities. Our reinsurers have ratings equal to or above A- from Standard & Poors, A3 from Moodys and/or B+ from A.M.Best. Insurance companies provide coverage in each and every country
where we have controlled interests, following terms and conditions given by our reinsurers. We maintain coverage for operational third-party liability with respect to our onshore and marine activities, including sudden environmental risks such as
oil spills (see Item 3. Key InformationRisk FactorsOur operations could cause environmental damage, and any changes in environmental laws may increase our operational costs). We carry third-party liability insurance coverage
of up to U.S.$125 million for each and every ocean marine and non-ocean marine incident of loss. We maintain control of wells coverage in many gas and oil fields located in Argentina and Bolivia. We also carry marine cargo inland transit insurance
and directors and officers insurance coverage, and environmental guarantee insurance policies in accordance with Law No. 25,675 (the General Environmental Policy Law) for the following assets: the Bahía Blanca refinery, the
Galván port storage plant, the Dock Sud distribution plant, the Avellaneda blending plant, the Genelba power generation plant, the Zárate-Puerto General San Martin and the Ethylene San Lorenzo petrochemicals plants and twenty gas
stations located in the City of Buenos Aires and the Province of Buenos Aires. All projects and installations under construction are required to be insured in compliance with the respective construction contract for any damage and liability risk. We
also carry insurance for workmens compensation and automobile liabilities.

Our main areas of coverage are subject to the following
deductibles:



| |  |  | U.S.$10,000,000 for each and every loss for property damage for all our businesses;
| | - |  | -----------------------------------------------------------------------------------



| |  |  | U.S.$5,000,000 for control of wells; and
| | - |  | ----------------------------------------



| |  |  | U.S.$5,000,000 in ocean and non-ocean marine third-party liability.
| | - |  | -------------------------------------------------------------------

Our insurance decisions
are based on our requirements and available commercial and market opportunities. Our facilities are regularly subject to risk surveys undertaken by international risk consultants.

PATENTS AND TRADEMARKS

Minor portions of our commercial activities are conducted under licenses granted by third parties. Royalties related to sales associated with
such commercial activities are paid under the relevant licenses. We use the name Petrobras with the permission of Petrobras.



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QUALITY, SAFETY, ENVIRONMENT AND HEALTH

PESA is a socially and environmentally responsible corporation that promotes continuous improvement of its health, safety and environmental
practices and policies. This commitment lies at the core of our corporate mission. We believe that caring for the environment in which we operate and for the safety and health of individuals is an essential condition for the activities we develop.

Our Quality, Safety, Environment and Health (QSEH) policies incorporate state-of-the-art concepts, including: eco-efficiency,
life cycle, continuous improvement and leadership. This is implemented through the use of 15 guidelines and international standards for practical and customary action, each aimed at responsible behavior-based development, in accordance with
management system requirements.

We have complied with international audits and certifications with respect to environmental management,
quality, safety and occupational health.

Excellence in Management

In 2012, we adopted the principles of our corporate management manual based on the Brazilian National Quality Award to provide a
framework for the development of best practices and business management measures and to identify strengths and opportunities for the implementation of improvement plans focusing on excellence. We improved our management procedures in 2015 by
implementing a systematic process to ensure compliance with corporate requirements and also with new reporting requirements such as with respect to the management of chemical precursors.

Since 2008, we have been implementing benchmark evaluations of management indicators to contribute to the creation of a culture of excellence
that integrates comparative information. In 2015, we ranked above the average of companies that participated in the evaluation within the large manufacturing company segment.

The management evaluation program for safety, environment and health, started in 2004, verifies site adherence to the safety, environmental
and occupational health policy (and its 15 corporate guidelines). This verification involves triennial evaluations conducted by specialized assistants from Petrobras system locations, selected by our head office.

We also promoted transparent and integrated management processes, while improving the efficiency of operations. PESA has implemented its
standardization process, based on the SINPEP (Petrobras Electronic Integrated Standardization System) application software developed by Petrobras for all of its units to facilitate the creation, implementation and improvement of
standards for organizational process management. With the purpose of improving teamwork activities that contribute to efficient operations and improved results, we continued with the Equipment Improvement initiative aimed at obtaining
efficient operations and improved results. In this respect, in 2015 we organized 9 new teams with participants from all of our business units to assess improvement initiatives considering efficiency, productivity, costs, quality, safety and the
environment. In 2015, three of our teams, participated in the 20th National Forum for Continuous Improvement organized by the Sociedad Argentina para Mejoramiento Continuo
(SAMECO), at which they shared their experiences and knowledge.

During 2015, we successfully completed the Certifications Program under
the ISO 9001, ISO 14001, OHSAS 18001 and ISO 50001 standards, and met the quality requirements established by the Institute of Internal Auditors, the Heart-safe Company and the Healthy Workplace requirements, thus showing our commitment to
customers, suppliers, shareholders, employees and the community. The Annual Certifications Program included internal and external audits on maintenance and re-certification of the management system as well as implementation of new certificates.
External audits were performed by recognized institutions such as TÜV Rheinland, the Institute of Internal Auditors of Argentina and Spain, Medical Tech and the Argentine Ministry of Health. Internal audits were efficiently carried out by our
qualified personnel. The program is a preventive activity that allows us to continue with management development to support the implementation of organizational strategies and the achievement of goals. In addition, we obtained two new
certifications: ISO 9001 in the Purchasing Management area, which focus on customer service and contribute to procurement quality management, and the ISO 50001 Certification (Energy Management) in our Lubricant Plant. In 2015, we began work for the
recertification of our activities under the new 2015 ISO 9001 and 14001 standards.

With respect to Corporate Safety and Security, we
implemented the Petrobras Corruption Prevention Program, designing a new system to prevent fraud, corruption and money laundering, consistent with our corporate policies.

HES Management

Our Health, Environmental
and Safety Risk Management (HES) Matrix was established to measure management quality in the implementation of health, environmental and safety processes in all of our facilities and plants with a focus on: permits and authorizations,
integrity, reliability, operational discipline, environmental liabilities, contingencies, and occupational health and industrial hygiene.



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During 2015, we completed 36 initiatives included in the HES Continuous Improvement
Program organized for the period between July 2015 and July 2016. Such program involved the implementation of systematic and continuous actions relating to safety, the environment, contingency and health, in connection with process safety,
accident reduction plan, zero spill, scope analysis, risk assessment recommendations and HES audits, among others. In addition, we continued to implement our projects portfolio aimed at minimizing HES-related risks at our facilities and worked on
evaluating HES-related requirements for new projects, such as the Exploration and Production (E&P) projects for conventional and non-conventional developments in both operated and non-operated areas.

During 2015, we conducted two external compliance assessments related to 15 HES Corporate Guidelines. Such assessments were carried out at our
Genelba plant and the Refinery, and results showed a great degree of compliance with our guidelines. In addition, we conducted self-assessment of compliance by our gas station network with such guidelines.

Within the framework of process safety, seven corporate indicators were implemented to assess management and enhance process safety in our
facilities.

Safety

As part of our
Operational Safety Improvement Plan, we developed 18 new initiatives in 2015 relating to the implementation and reinforcement of process safety actions.

An international consulting firm performed five process risk studies at our Puerto General San Martín plant and in the Medanito, Sierra
Chata, Río Neuquén and Aguada de La Arena areas, focused on process control.

In addition, three international reassurance
audits were carried out at the Refinery, Genelba and Zarate plants, resulting in a high performance rating.

We received the IAPG
2015 Annual Safety Award granted by the Argentine Oil and Gas Association (IAPG) among a group of companies in the Producers, category for safety management in exploration and production operations. This award considers the safety
performance achieved between the second semester of 2014 and the first semester of 2015.

Environment

Our operations are carried out prioritizing QSEH-related matters within a sustainable development context. We are committed to
minimizing our impact on the environment, and are developing a framework to assess and report on the eco-efficiency of all of our business units. Eco-efficiency is based on the concept of creating more goods and services while using fewer resources
and creating less waste and pollution.

We continue developing actions aimed at permanently reducing accidental spill risks, mainly under
programs for the integrity of aerial and underground pipelines and tanks. In addition, monitoring and environmental studies are performed in order to become acquainted with the different situations in target sectors. Thus, in 2015 we continued
implementing the Zero Spill (Vazamento Zero) program within the Petrobras System. This program is now part of the HES Continuous Improvement Program and focuses on three fundamental pillars: Management System, Facility
Integrity and Contingencies.

In 2015, we created a Pipeline and Tank Integrity Committee which comprises the technical heads from all of
our business units, to perform a critical analysis of the Facilities Integrity Management standards, define and monitor indicators that are common across PESA, coordinate and conduct pipeline (internal and cross) audits and share
experiences among units (best practices). Through a sub-committee formed in September 2015, the Committee asseses operational safety at terminals during loading and unloading operations in vessels with onboard product, revises and updates
PESAs existing standards, defines and monitors management indicators for terminals and conducts (internal and cross) audits on terminals. In addition to prevention, we also develop programs related to preparation for possible incidents.

On December 10, 2015, our Lubricant plant equipment was audited by TÜV Rheinland Argentina and obtained ISO 50001 (Energy
Management) certification for Lubricant Development, Production and Dispatch. During December 2015, the certifications for Responsible Environmental Care and the National Contingency Plan of the Puerto General San
Martín and San Lorenzo Ethylene plants were renewed. Within the framework of the Responsible Environmental Care Program (PCRMA), we had an IRAM audit from the Chemical and Petrochemical Industry Chamber in September
2015 and obtained an outstanding audit rating. The auditing firm certified that PESAs management system is compliant with PCRMA standards. As a result of the rating obtained, the certification was renewed for three years, a longer-than average
period.



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Emergency Response

We are engaged in preventing, preparing for, and responding to emergency situations, with an emphasis on minimizing damage and rapidly
restoring previous conditions in the event of an accident. To that end, we carry out a plan of standardization and revision of contingency processes in our units.

We conduct land and nautical drills to develop the skills and competency needed to carry out our emergency plans in different sectors
involving the coordination of the activities of various parties to be called in an emergency. More than 1,450 individuals from the emergency-response community, including civil defense forces and firemen, have been trained in techniques for reducing
leaks and firefighting related to land transportation.

Health

In 2015, we continued with our health promotion and protection programs with a focus on primary and secondary prevention and the generation of
a healthy workplace.

Within this context, we continued with our Health Promotion and Protection Program (PPS) aimed at generating healthy
life habits and behavior through healthy diets and food safety actions according to IRAM 14201, physical activity, preventive dental healthcare, smoking cessation and addiction prevention.

These actions are based on an annual health exam performed through medical tests to all employees, which contemplates occupational and
epidemiological risks, thus facilitating the implementation of a specific health program tailored to the needs of the risk groups surveyed.

Concerning prevention, in 2015, we continued providing Cardiopulmonary Resuscitation and First Aid training courses, the physical activities
plan and flu and tetanus vaccination campaigns.

During 2015, we maintained our Heart Safe program under the American Heart
Associations international standards and maintained our certification as a smoke-free company through the Argentine Ministry of Health. In addition, we were recognized by such Ministry as a Healthy Workplace and as a blood donation-friendly
company on account of the implementation campaigns for voluntary donation of blood in our different plants.

Within the framework of the
Occupational Hygiene Program, we completed the relevant work environment measurements and specific risk maps were completed, and deviations were followed up. We also continued performing ergonomic surveys of specific workplaces.



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REGULATION OF OUR BUSINESS

Argentine Regulatory Framework

Petroleum

Overview

The Argentine oil and gas industry is regulated by Law No. 17,319 (the Hydrocarbons Law), enacted in 1967, as amended by Law
No. 26,197 and Law No. 27,007, and natural gas is regulated by Law No. 24,076 (the Natural Gas Act), enacted in 1992. The Hydrocarbons Law, which sets forth the general legal framework for the exploration and production of
oil and gas, allows the Argentine government to establish a national policy for the development of Argentinas hydrocarbon reserves, with the principal purpose of satisfying domestic demand.

Originally, the Hydrocarbons Law provided that all oil and gas reserves located within the Argentine territory were owned by the Argentine
government, but in 1992 a new regulatory framework was implemented in response to several changes in the Argentine oil and gas industry after the privatization of Yacimientos Petrolíferos Fiscales Sociedad del Estado (now YPF) and Gas del
Estado (GdE). In order to respond to these changes, Law No. 24,145 (the Privatization Law) was enacted. Pursuant to the Privatization Law, the Argentine government transferred ownership of oil and gas reserves to the
governments of the provinces where those reserves were located, upon satisfaction of certain conditions. Furthermore, pursuant to section 124 of the Argentine Constitution, as amended in 1994, provinces were also granted primary control over natural
resources existing in their respective territories. In 2007, Law No. 26,197 (the Federalization Law) amended the Hydrocarbons Law to also provide that oil and gas areas belong either to (and should be administrated by) the Argentine
government or the provinces, depending on the territory where the relevant areas are located.

Fields located in the area lying between 12
nautical miles from the coastline and the outer boundary of the continental shelf belong to the Argentine government. All the fields lying within the various provinces or in offshore areas within 12 nautical miles of the coastline belong to the
provinces or the City of Buenos Aires, as applicable. The Federalization Law also divides authority over hydrocarbon transportation concessions between the Argentine government and the provinces, as discussed in detail below under
Federalization Law.

As a result of the Federalization Law, all oil and gas exploration permits and production
concessions, as well as other types of exploration and/or production contracts with respect to the fields located in provincial territories, where originally granted by the Argentine government, were transferred to the relevant provinces by
operation of law without affecting the rights or obligations of permit or concession holders. Transportation concessions within provincial territories were also transferred to the relevant provinces.

The Hydrocarbons Law allows the Argentine government to establish national policies for the development of Argentine reserves and to set out
the federal energy policy. Provinces have the right to (i) control and conduct surveillance of permits, concessions and exploration and production agreements; (ii) enforce compliance with the terms and conditions of permits, concessions
and exploration and production agreements; (iii) approve the extension of the terms of permits, concessions and exploration and production agreements; and (iv) impose fees.

Following the enactment of the Federalization Law, several provinces (i.e., Chubut, Río Negro, La Pampa and Mendoza) conducted
public bidding processes for the granting of new exploration permits and, eventually, production concessions.

While privatized, the oil
and gas industry still remains heavily regulated, particularly with respect to: the granting of exploration and production rights, strict control on exports, taxes and fees on gross production; specific investment obligations relating to drilling
activities, and other environmental controls and works.

On April 16, 2012, the Argentine government, through Decree No. 530/12,
removed YPFs senior officers and empowered a government intervenor to take a position with YPF for a period of 30 days with immediate effect. On May 3, 2012 the Argentine Congress enacted Law No. 26,741 for the expropriation of 51%
of YPFs Class D shares, out of the shares then held by Repsol YPF S.A. (Spain), and 51% of Repsol YPF GAS S.A., represented by 60% of its Class A shares then held by Repsol Butano S.A. (Spain). Additionally, Law No. 26,741 declares
the self-sufficiency, exploration, production, industrialization, transportation and marketing of hydrocarbons to be activities of public interest and primary goals of Argentina, empowering the Argentine government to take the measures necessary to
achieve such goals.

On July 27, 2012, Decree No. 1,277/12 repealed certain Sections of Decree Nos. 1,055/89, 1,212/89 and
1,589/89, as well as any other regulation that had previously provided for free disposal of hydrocarbons.

Decree No. 1,277/12
also created the Commission under the supervision of the Secretaría de Política Económica y Planificación del Desarrollo del Ministerio de Economía y Finanzas Públicas, as well as the Registro
Nacional de Inversiones Hidrocarburíferas (the Registry).



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Decree No. 1,277/12 set forth an obligation by the companies in the Argentine oil and gas
industry to submit to the Commission an annual plan on exploration and production investments. The Commission is in turn mandated to design a National Hydrocarbon Investment Plan each year.

On October 31, 2014, Law No. 27,007 amended the Hydrocarbons Law by, among other changes, distinguishing between concessions granted
for exploration of conventional resources, as compared to non-conventional resources, and concessions granted for offshore exploration and production, modifying the fee and royalty payment schedule, and modifying certain regulations with the goal of
promoting investment and the efficient use of resources.

In February 2015 the Commission, through Resolution No. 14/2015, created
the Crude Oil Production Stimulus Program (Programa de Estimulo a la Producción de Petróleo Crudo), which was effective from January 1, 2015 through December 31, 2015, providing for export and/or production stimulus
payments for registered companies subject to certain requirements. Furthermore, through Resolution No. 33/2015, the Commission approved the general regulation of such program.

Subsequently, through Resolution No. 123/2015, the Commission regulated acquisitions, sales and transfers of areas, rights and
participation under Gas Program I and Gas Program II. See Gas and EnergyGas Marketing and Transportation

In
December 2015, the new administration dissolved the Commission. Certain of the Commissions functions and duties were transferred to the Ministry of Energy and Mining. Through Decree No. 272/2015, the Ministry of Energy and Mining in
charge of completing a comprehensive review of the rules relating to the registration and disclosure requirements applicable to companies operating in the oil and gas sector. However, until any changes in laws or regulations are enacted, we are
uncertain as to how any such changes may affect our business and results of operations. Changes made in connection with the Ministry of Energy and Minings review, or any further changes in the regulatory framework, may have an adverse effect
on the business, revenues and operations of companies operating in the Argentine oil and gas sector, including us.

On March 9, 2016
the Ministry of Energy and Mining issued Resolution No. 21/2016 creating an export stimulus program for Escalante crude oil surplus (i.e., after domestic demand is satisfied) from the San Jorge Gulf Basin, effective from January 1, 2016
through December 31, 2016. The additional compensation to which such exports are entitled is to be paid for each shipment provided that the average price of Brent oil does not exceed U.S.$47 per barrel in the period beginning two days prior to
such shipment and ending two days after such shipment. The compensation to be paid by the Argentine government to eligible exporters amounts to U.S.$7.50 per barrel.

See Item 3. Key InformationRisk FactorsThe Argentine government and provincial governments have intervened in the oil and
gas industry in the past, and are likely to continue to intervene Limits on exports of hydrocarbons and related oil products have affected and may continue to affect our results of operations and Argentine oil and
gas production concessions and exploration permits are subject to certain conditions and may not be renewed or could be revoked.

Exploration and Production

Pursuant to the Hydrocarbons Law, exploration and production of oil and gas are carried out though exploration permits, production concessions,
production contracts or partnership agreements. Nevertheless, the Hydrocarbons Law permits surface reconnaissance of territories not covered by exploration permits or production concessions, with the authorization of the SE and the permission of the
owner of the land. Information obtained through surface reconnaissance must be provided to the office of the SE, which is prohibited from disclosing such information for a period of two years without the prior authorization of the party that
conducted the exploration, except in connection with the granting of exploration permits or production concessions.

The Hydrocarbons Law
originally granted exploration permits and production concessions at the federal level through a competitive bidding process. Since the enactment of the Federalization Law, this power is exercised by both the federal and provincial governments, as
applicable. Companies and individuals seeking to obtain oil and gas permits and to participate in concession bidding processes need to satisfy certain registration requirements with the SE. Permits granted to third parties in connection with the
deregulation and de-monopolization process were granted in accordance with procedures specified in certain decrees, known as the Oil Deregulation Decrees, issued by the Argentine government. In 1991, the Argentine government established
a program under the Hydrocarbons Law, known as the Argentina Exploration Plan, which remains in effect and pursuant to which exploration permits may be auctioned. The holder of an exploration permit has the exclusive right to perform the
operations necessary or appropriate for the exploration of oil and gas within the area specified by the permit. Each exploration permit may cover only unexplored areas up to 10,000 square kilometers in size (or 15,000 square kilometers for offshore
exploration), and may have a term of up to 14 years (or 17 years for offshore exploration).

In the event that holders of an exploration
permit discover commercially exploitable quantities of oil or gas, such holders will be entitled to obtain an exclusive concession for the production and exploitation of the relevant reserves. The production concession provides its holder the
exclusive right to produce oil and gas from the area covered by the concession for a term of 25 years (plus, in certain cases, a part of the unexpired portion of the underlying exploration permit), which may be extended by the relevant authority for
an additional ten-year term. A production concession also entitles the holder to obtain a transportation concession for transporting of the oil and gas produced.



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Under the Hydrocarbons Law, holders of exploration permits and production concessions are
required to carry out all necessary works to find or extract hydrocarbons, using appropriate techniques, and to make the investments specified in their respective permits or concessions. In addition, holders must avoid damage to oil and gas fields
and hydrocarbon waste, must undertake adequate measures to prevent accidents and damage to agricultural activities, the fishing industry, communications networks and ground water, and must comply with all applicable federal, provincial and local
laws and regulations. Failure by the holder of permits or concessions to make the relevant investments or take the measures required to avoid damages entitles the federal or provincial government who granted such permits or concessions to revoke or
terminate them early, as applicable. Recently, provincial governments have revoked concessions, including one of our concessions, arguing that concessionaires had failed to make the required investment. See Item 3. Key InformationRisk
FactorsArgentine oil and gas production concessions and exploration permits are subject to certain conditions and may not be renewed or could be revoked.

Holders of production concessions are required to pay for such concessions, and to make certain royalty payments to the Argentine government.
Please see Royalties below for more detail.

Additionally, the holder of a permit or a concession must compensate the
surface owner. In this regard, joint resolutions Nos. 630/2015 of the SE and 299/2015 of the Ministry of Agriculture, amended joint resolutions Nos. 391/2014 and 107/2014, in relation to compensation values established by Decree No. 861/96 (and
related joint resolutions) for the areas of rainfed cuyana and neuquina.

Exploration permits and production or transportation concessions
are subject to termination upon breach or violation of applicable laws, regulations, or permit or concession terms, or upon the bankruptcy of the permit holder or concessionaire. In the event of the expiration of exploration permits or production
concessions, all oil and gas wells, operating and maintenance equipment and ancillary facilities automatically revert to the federal or provincial government, without compensation to the permit holder or concessionaire.

Exploration permits and production concessions can be partially or totally assigned with the prior authorization of the Argentine government
or the provinces.

The Hydrocarbons Law does not automatically provide for termination due to a change of control in a companys
equity, although change of control clauses may be included under the relevant exploration permits or production concessions.

The
Hydrocarbons Law, as amended by Law No. 27,007, provides that conventional (oil and gas) concessions will remain in effect for 25 years, non-conventional concessions for 35 years and offshore concessions for 30 years. In order to be eligible
for an extension of a concession, under the amended Hydrocarbons Law, concessionaires must (i) have complied with their obligations under the law and their concessions, (ii) be producing hydrocarbons in the concession under consideration,
and (iii) submit an investment plan for the development of such areas as requested by the competent authorities at least one year prior to the termination of the concession term. Further, concessionaires applying for extensions under Law
No. 27,007 must make additional royalty payments ranging from 3% up to a maximum of 18%. Non-compliance with the obligations and standards set out in the Hydrocarbons Law may also result in the imposition of fines and, in the case of material
breaches following the expiration of applicable cure periods, revocation of the relevant concession or permit. See Item 3. Key InformationRisk FactorsArgentine oil and gas production concessions and exploration permits are subject
to certain conditions and may not be renewed or could be revoked.

Authorized Governmental Agency

The SE is the federal governmental agency in charge of enforcing the Hydrocarbons Law. However, the executive branch of Argentine government is
in charge of determining areas in which hydrocarbons activities are to be encouraged and, together with provincial governments, the granting of permits and concessions. Pursuant to the Federalization Law, each province has the authority to enforce
the Hydrocarbons Law within its own territory.

Pursuant to Decree No. 1,277/12, companies holding hydrocarbon concessions must
submit to the Commission an annual investment plan. The Commission shall then evaluate the annual investment plan, verifying its suitability with respect to the National Hydrocarbon Investment Plan for that year. If it is deemed not to correspond
with the national plan, the Commission may request the submission of a new annual investment plan that more suitably conforms to the requirements of the National Hydrocarbon Investment Plan.

State-Owned Energy Company

In October 2004, the Argentine Congress enacted Law No. 25,943 creating a new state-owned energy company called Energía Argentina
S.A. (ENARSA). The corporate purpose of ENARSA is to carry out, through third parties or through joint operations with third parties, (i) studies, exploration and exploitation of natural hydrocarbon reserves; (ii) the
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of hydrocarbons and their direct and indirect by-products; (iii) the transportation and distribution of natural gas and (iv) the generation, transportation, distribution and sale of
electricity. Moreover, Law No. 25,943 granted ENARSA all exploration concessions in respect of all national offshore areas located more than 12 nautical miles from the coastline, up to the outer boundary of the continental shelf, that were
vacant at the time of the entry into force of the law on November 3, 2004. Therefore, any future exploration of offshore areas must be performed jointly with ENARSA.

Equity Requirements

The Hydrocarbons Law requires that, to engage in any exploration, production or transportation activity in respect of oil and gas, companies
must comply with certain capital requirements and financial solvency standards.

SE Resolution No. 193/03 states that, in order to
receive and maintain permits or concessions, the permit holder or concessionaire must have a minimum equity of Ps.2 million, in the case of land areas, and Ps.20 million, in the case of offshore areas, and that such minimum equity must be
maintained for the entire term of the permit or concession. Non-compliance with this requirement may result in penalties, including fines or even removal from the register of oil companies of the SE. Up to 70% of these equity requirements may be
satisfied by means of financial or other guarantees.

Federalization Law

The Federalization Law was published in the Official Gazette on January 3, 2007, and amended the Hydrocarbons Law to clarify the federal
and provincial governments ownership rights over liquid and gaseous hydrocarbon fields, based upon their location. As noted above, the Federalization Law transferred ownership of all hydrocarbon reservoirs that are onshore or within 12
nautical miles offshore to the provinces and the City of Buenos Aires, as applicable, and provided for Argentine government ownership of reservoirs more than 12 nautical miles offshore, until the outer limit of the continental shelf. Pursuant to the
Federalization Law, the Argentine Congress shall continue to enact laws and regulations to develop oil and gas resources existing within all of the Argentine territory (including marine resources), but the governments of the provinces where the
hydrocarbon reservoirs are located shall be responsible for the enforcement of these laws and regulations, and the administration of the hydrocarbon fields, and shall act as granting authorities for the exploration permits and production
concessions. However, the administrative powers granted to the provinces shall be exercised within the framework of the Hydrocarbons Law and the regulations complementing this law. Consequently, even though the Federalization Law established that
the provinces shall be responsible for administering the hydrocarbon fields, the Argentine Congress retained its power to issue rules and regulations regarding the oil and gas legal framework. Additionally, the Argentine government retained the
power to determine national energy policies. It was expressly stated that the transfer would not affect the rights and obligations of exploration permit and production concessionaires, or the basis for the calculation of royalties, which shall be
calculated in accordance with the concession title and paid to the province where the reservoirs are located. The Federalization Law provides that the Argentine government shall retain the authority to grant transportation concessions:
(i) involving the territory of two or more provinces; and (ii) directly connected to export pipelines for export purposes. Consequently, transportation concessions which are located within the territory of one province and which are not
connected to export facilities have been transferred to the provinces.

Finally, the Federalization Law grants powers to the provinces to:
(i) exercise in a complete and independent manner all activities related to the supervision and control of the exploration permits and production concessions transferred by Law No. 26,197; (ii) enforce all applicable legal and/or
contractual obligations regarding investments, rational production and information and surface fee and royalties payment; (iii) establish the legal and contractual terms of any permits or concessions it grants; (iv) apply the sanctions
provided for in the Hydrocarbons Law; and (v) exercise all other authority as set forth by the Hydrocarbons Law.

Since the enactment
of the Federalization Law on January 3, 2007, both the SE and the applicable province have been counterparties to the different permits and concessions granted, with all the powers set forth in the Hydrocarbons Law, as amended and supplemented,
and the rights derived therefrom.

On May 3, 2012, the Argentine Congress enacted Law No. 26,741, which declares the
self-sufficiency, production, industrialization, transport and marketing of hydrocarbons to be activities of public interest and primary goals of Argentina, and empowers the Argentine government to take the measures necessary to achieve such goals.

On July 15, 2013, the Argentine Government created the System of Investment Promotion Regime for the Exploitation of Hydrocarbons by
Decree No. 929/13 (Promotion Regime). Under the Promotion Regime, holders of exploration permits and/or concession rights registered in the Registry may apply to be included in the Promotion Regime, provided that they submit to the
Commission an investment project, with a direct investment of at least U.S.$1 billion to be invested in the first five (5) years of such project. The beneficiaries of the Promotion Regime will be entitled to certain benefits, including,
beginning the fifth year after their projects commencement, the right to freely trade in the foreign market 20% of the production of oil and gas produced in their project without being subject to export tax withholdings. Additionally, the
Promotion Regime provides that any exploitation concession confers the exclusive right to exploit deposits of conventional and unconventional hydrocarbons that exist in the areas covered by the respective concession during the corresponding periods.



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Resolution No. 9/13 of the Commission approved the regulatory requirements and conditions
for the submission and subsequent incorporation of investment projects for the exploitation of hydrocarbons under the Promotion Regime. Law No. 27,007 also permits holders of concessions to alsosubmit investment projects for inclusion in the
Promotion Regime as long as they involve a direct investment in foreign currency of at least U.S.$250 million within the first three years of such project. Law No. 27,007 maintains the export tax benefit on the first 20% of oil and gas produced
in conventional, unconventional and offshore concessions at depths less than or equal to 90 meters and provides for an export tax benefit on the first 60% of oil and gas produced in offshore concessions at depths greater than 90 meters.

Transportation

The Hydrocarbons Law grants hydrocarbon producers the right to obtain from the Argentine government a 35-year concession for the transportation
of oil, gas and their by-products through a public tender process. Producers remain subject to the provisions of the Natural Gas Act and in order to transport their hydrocarbons do not need to participate in public tenders. The term of a
transportation concession may be extended for an additional ten years upon application to the Argentine government.

Transporters of
hydrocarbons must comply with the provisions established by Decree No. 44/91, which implements and regulates the Hydrocarbons Law as it relates to the transportation of hydrocarbons through oil pipelines, gas pipelines, multiple purpose
pipelines and/or any other services provided by means of permanent and fixed installations for transportation, loading, dispatching, tapping, compression, conditioning infrastructure and hydrocarbon processing. This decree is applicable to oil
pipelines and not to gas pipelines. See Regulation of Our BusinessArgentine Regulatory FrameworkNatural GasENARGAS.

The transportation concessionaire has the right to transport oil, gas and petroleum products and to construct and operate oil pipelines and
gas pipelines, storage facilities, pumping stations, compressor plants, roads, railways and other facilities and equipment necessary for the efficient operation of a pipeline system. While the transportation concessionaire is obligated to transport
hydrocarbons on a non-discriminatory basis on behalf of third parties for a fee, this obligation applies only if such producer has surplus capacity available and after such producers own transportation requirements are satisfied.

Depending on whether gas or crude oil is transported, tariffs are subject to approval by ENARGAS or the SE. SE Resolution No. 5/04 sets
forth maximum amounts:



| |  |  | for tariffs on hydrocarbon transportation through oil pipelines and multiple purpose pipelines, as well as for tariffs on storage, the use of buoys and the handling of liquid hydrocarbons; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | that may be deducted in connection with crude oil transportation by producers that, as of the date of the regulation, transport their production through their own unregulated pipelines, for the purpose of assessing
royalties.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Upon expiration of a transportation concession, ownership of the pipelines and related facilities is transferred
to the Argentine government with no compensation to the concessionaire.

Refining and Marketing

Decree No. 1,212/89, issued pursuant to the Hydrocarbons Law, regulates hydrocarbon-refining activities by oil producers and other third
parties. This decree, as well as rules and regulations issued by the SE, regulates the commercial, environmental, quality and safety aspects of refineries and gas stations. This decree authorized imports, abolished oil assignments by the SE and
deregulated the installation of refineries and gas stations. Certain supervisory and control powers of the SE have also been delegated to provincial and municipal authorities, and therefore the refining and sale of refined products must also comply
with provincial and municipal technical, health, safety and environmental regulations.

In order to refine hydrocarbons, companies must
register with the SE. Registration is granted on the basis of financial, technical and other standards. As described below, liquid fuel retail outlets, points of sale for fuel fractioning, the resale to large users and supply contracts between gas
stations and oil companies are also subject to registration with the SE.

Also, gas stations and other fuel retailers and distributors are
required to register with the SE to participate in the liquid fuel market. Severe sanctions are imposed on those who execute transactions with unregistered parties. Additional requirements are also imposed on all fuel market participants, and brand
owners are jointly liable for any breaches by companies operating under their brand name (pursuant to SE Resolution No. 1,102/04). Also, gas stations in border areas must sell fuels to vehicles bearing foreign license plates at mandatory
differential prices (pursuant to SE Resolutions Nos. 938/06 and 959/06).

The Argentine government has also imposed restrictions on
exports, requiring producers to obtain authorization before performing export operations (pursuant to Decree No. 645/02 and SE Resolutions Nos. 1,679/04 and 1,338/06). Prior to obtaining the SEs approval to export crude oil or diesel oil,
producers must generally demonstrate that they have either satisfied local demand requirements or granted the domestic market the opportunity to purchase oil on similar terms. Potential exporters of diesel oil must also register in advance with the
government (pursuant to SE Resolution No. 1,679/04).



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In 2005, the Argentine government imposed additional requirements to guarantee the domestic
supply of diesel oil to gas stations by refiners (pursuant to SE Resolution Nos. 1,834/05 and 1,879/05). Initially, these regulations allowed gas stations to obtain diesel oil from third parties if refiners were unable to meet demand, with refiners
bearing any additional costs incurred in procurement. In 2006, regulations were introduced to require refining companies, wholesalers and retailers to meet total reasonable diesel oil demand on a continuous basis in every region in Argentina at the
same level demanded for the corresponding month in the previous year, plus an adjustment to account for growth in domestic product (pursuant to Secretary of Domestic Commerce Resolution No. 25/06).

Provision No. 157/06 of the Argentine Undersecretary of Fuels provides that fuel sellers who are parties to contracts creating any degree
of exclusivity between the refining company and the fuel seller, which for any reason are seeking to terminate such contract, shall report the termination in advance to the Argentine Undersecretary of Fuels in order to inform the Secretary of
Domestic Commerce. In that case, the Secretary of Domestic Commerce must: (i) issue a statement regarding the validity of the termination of the contract and (ii) use all necessary means to allow the fuel seller terminating the contract to
execute another agreement with a refining company and/or fuel broker in order to guarantee its fuel supply.

The SE also regulates the
quality content of fuels, through SE Resolution No. 1,283/06. This Resolution has been modified by SE Resolution No. 478/09, postponing the enforcement of some quality specifications for certain kinds of fuels.

Any new fuels sold in Argentina must be authorized by the Undersecretary of Fuels (pursuant to SE Resolution No. 1,334/06). In 2008, the
SE exempted fuel oils sold to power plants from marketing quality requirements under SE Resolution No. 1,283/06 (pursuant to SE Resolution No. 150/08).

SE Resolution No. 1,103/04 provides, pursuant to Section 17 of Decree No. 1,212/89, that in the case of gas stations operating
under a brand, the brand owner under which fuels are sold shall be responsible for the specification, quality and quantity of products sold and for compliance thereof with reported requirements, and in the case of gas stations operating under no
brand, the operator shall be the responsible party and fuel suppliers may also be jointly and severally liable when identified.

The
Ministry of Federal Planning created the Energía Total (Total Energy) program in 2007 to help guarantee the supply of liquid and gas fuels to producers and to the Argentine population during 2008 (pursuant to Resolution
No. 459/07). The program is designed to encourage the substitution of alternative fuels for natural gas and electricity consumption used in various production activities, and for electricity generation. The program has since been extended.
ENARSA is in charge of coordinating the Total Energy program, under which two separate plans call for the provision of liquid and gas fuels. One goal of the program is to guarantee the supply of liquid fuels derived from oil (LPG, diesel, fuel oil,
gasoline and octane enhancers) and to meet overall demand, based on economic growth and industrial development. The beneficiaries of this plan are primarily fuel refining and importing companies in Argentina that qualify pursuant to regulations
governing the Total Energy program and that have reached an agreement with ENARSA.

From January 1, 2010, as established by Law
No. 26,093, Decree No. 109/07 and other regulations, all gas and diesel sold in Argentina must contain 5% of biodiesel and all petroleum naphtha sold in Argentina must contain 5% bioethanol. Bioethanol to be contained in petroleum naphtha
sold in Argentina was increased to 10% and 12%, through Resolution No. 44/14 of the SE and No. Resolution No. 37/16 of the Ministry of Energy and Mining, respectively.

On January 17, 2014, Resolution 1/14 of the Commission approved the Procedure for Light Crude Oil Imports, fixing the maximum
quantities of light crude oil that may be imported by each market participant on the basis of idle refining capacity, refinery complexity and domestic market share of gasoline and diesel. Resolution 1/14 further provides that the Commission will
evaluate each import proposal submitted to it and determine actual import volumes to be assigned to each importer, in accordance with the referenced maximum quantities.

Market Regulation

Under the Hydrocarbons Law and certain decrees issued in connection with the deregulation and de-monopolization process that took place in the
early 1990s (the Oil Deregulation Decrees), holders of production concessions had the right, with a few limited exceptions, to freely dispose of their production either through sales in the domestic market or through exports. However,
since 2002, the Argentine government has imposed restrictions on the export of hydrocarbons under the Hydrocarbons Law. See Refining and Marketing above and Item 3. Key InformationRisk Factors Factors Relating to
ArgentinaLimits on exports of hydrocarbons and related oil products have affected and may continue to affect our results of operations.

In this context, Decree No. 1,277/12 repealed certain articles of Decree Nos. 1,055/89, 1,212/89 and 1,589/89, as well as any other
regulation that had previously provided for free disposal of hydrocarbons.



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Decree No. 1,277/12 also requires refining, marketing and transportation companies to submit
to the Commission an annual investment plan. The Commission shall then evaluate the annual investment plan, verifying its suitability with respect to the National Hydrocarbon Investment Plan for that year, and shall audit the relevant companys
ongoing fulfillment of its plan every three months.

The Hydrocarbons Law authorizes the Argentine government to regulate the Argentine
oil and gas markets and prohibits the export of crude oil during any period in which the Argentine government finds domestic production to be insufficient to satisfy domestic demand. In the event that the Argentine government restricts the export of
oil and petroleum products or the free disposal of natural gas, the Oil Deregulation Decrees provide that producers, refiners and exporters shall receive a payment at a price, in the case of crude oil and petroleum products, not lower than that of
similar imported crude oil and petroleum products, and, in the case of natural gas, not less than 35% of the international price per cubic meter of Arabian light oil, at 34 degrees. See Refining and Marketing above.

Oil Plus and Refining Plus Programs

On November 25, 2008, the Argentine government issued Decree No. 2,014/08, which created two programs, known as Oil Plus and Refining
Plus. The principal purpose of these programs is to stimulate the exploration, production and exploitation of oil reserves, in order to increase refining capability and production of different types of fuels. According to the decree, companies that
fulfill requirements established by these programs will be awarded tax credits that are transferable and that can be applied against export taxes levied on exports of crude oil, natural gas and derivatives.

Also, pursuant to Decree No. 2,014/08, construction of infrastructure by oil companies to (i) enable the exploration and production
of new hydrocarbons reservoirs, (ii) increase production capacity or (iii) incorporate new technology for the operation of existing and new hydrocarbons reservoirs, may qualify as Obra de Insfraestructura Crítica(Critical
Infrastructure Construction) under Law No. 26,360, and the company may seek reimbursement of the value-added tax (VAT) corresponding to the assets involved in the infrastructure construction, or accelerate the amortization of the
same assets for the purpose of determining their income tax. Decree No. 2,014/08 is regulated by SE Resolution No. 1,312/08, which defines and quantifies the incentives to be awarded under these programs. These incentives are awarded
according to variables such as the international price of oil, the production volumes and the ratios of recovery of hydrocarbons reserves. Fiscal credits awarded under the Oil Plus program are subject to verification of an increase in the production
of oil and the incorporation of new reserves of hydrocarbons. Fiscal credits awarded under the Refining Plus program are contingent upon the existence of projects to install new refining units or the expansion of existing units.

In 2012, the Argentine government announced the suspension of the Oil Plus and Refining Plus programs, based on changes in the market
conditions under which these programs were established in 2008. On July 13, 2015, the Argentine government, through Decree No. 1,330/2015, terminated the Oil Plus program, establishing a compensation payable in Argentine sovereign bonds
(namely, BONAR 2018 and BONAR 2024) for fiscal credits accrued but not paid under this program.

SE Resolution No. 1/13 repealed
certain benefits recognized by Resolution No. 1,312/08, in particular those which had been granted to exporting companies that satisfied certain requirements a tax credit of 12% of the difference between the domestic price and the value of the
international price applicable to such export.

Royalties

Pursuant to sections 57 and 58 of the Hydrocarbons Law, holders of exploration permits and production concessions must pay an annual surface
fee that is based on the acreage of each block and which varies depending on the phase of operation (i.e., exploration or production), and in the case of exploration, depending on the relevant period of the exploration permit. On
October 17, 2007, Decree No. 1,454/07 significantly increased the amount of exploration and production surface fees expressed in Argentine pesos that are payable to the different jurisdictions where hydrocarbon fields are located.

According to the Hydrocarbons Law, royalties equivalent to 12% of the wellhead price of crude oil and natural gas are paid in Argentina,
though a province may require the payment of a higher royalty rate upon renewal of a concession, up to a maximum of 18%. The wellhead price is calculated by deducting freight and other sales-related expenses from the sale prices obtained from
transactions with third parties. The Hydrocarbons Law authorizes the government to reduce royalties by 5% based on the productivity and location of a well and other special conditions. Any oil and gas produced by the holder of an exploration permit
prior to the granting of a production concession is subject to the payment of a 15% royalty.

SE Resolution No. 435/04, which updated
SE Resolution No. 155/92, (i) imposes additional reporting requirements with respect to royalties, (ii) introduces certain changes with respect to the powers of provinces, (iii) amends certain parts of the royalty determination
system, including applicable deductions and exchange rates, and (iv) establishes penalties upon default of a reporting duty. This resolution has been applicable to permit holders and concessionaires since June 2004.



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Concessionaires are required to file monthly affidavits with the SE and the relevant provincial
authorities, reporting:



| |  |  | the quantity and quality of extracted hydrocarbons, including the computable production levels of liquid hydrocarbons and a breakdown of the crude oil (by type), condensate and total natural gas recovered (with a 0.1%
maximum error tolerance);
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | sales to domestic and foreign markets;
| | - |  | --------------------------------------



| |  |  | reference values for transfers made at no cost for purposes of further industrialization;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | freight costs from the location where marketable condition of a product is attained to the location where commercial transfer of the product takes place; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a description of sales executed during each month.
| | - |  | --------------------------------------------------

In addition to the affidavits,
concessionaires must file receipts evidencing the payment of royalties. Upon breach of any reporting duty, provincial authorities are entitled to make their own assessment of royalties.

SE Resolution No. 435/04 also provides that if a concessionaire allots crude oil production for further industrialization processes at
its own or affiliated plants, the concessionaire is required to agree with provincial authorities and the SE, as applicable, on the reference price to be used for the purpose of calculating royalties and payments. Upon failure by the concessionaire
to agree to a price, provincial authorities may fix this reference price. The concessionaire is eligible for certain deductions, including (i) inter-jurisdictional freight costs, which can be deducted from the selling price, as long as
transportation is made by means other than a pipeline, and monthly invoices and any relevant agreements are provided, and (ii) internal treatment costs (not exceeding 1% of the payment) incurred by authorized permit holders or concessionaires.

Undersecretary of Fuels Provision No. 1/08 established that the cutoff value for crude oil obtained from bituminous minerals as
established by Ministry of Economy Resolution No. 394/07, equivalent to U.S.$42.00 per barrel, should be considered as the effective floor price on which to apply the positive quality adjustments for purposes of calculating the settlement
of hydrocarbon royalties payable to the provinces.

By Decree No. 2,240/08, the Province of Neuquén approved the agreement
signed with PESA for the extension of its concessions, other than Sierra Chata, for an additional ten years, subject to the Companys agreement to pay to the Province an additional royalty fee of 3% on its production of oil and gas in addition
to the 12% annual royalty payment previously described.

SE Resolution No. 813/10 ratified Undersecretary of Fuels Provision
No. 1/08 for purposes of the settlement of hydrocarbon royalties as from January 9, 2008.

Exchange Rates Applicable to
Royalties. Under Ministry of Economy Resolution No. 76/02, royalties on oil exports must be fixed taking into account the offer exchange rate quoted by the Banco de la Nación Argentina on the day before the royalty is paid.

However, from December 2001 until May 2002, producers and refiners agreed to negotiate a reduced exchange rate in order to moderate the impact
of the Argentine peso devaluation on the price of the products. Producers calculated and paid royalties according to this reduced exchange rate. These calculations have been rejected by the Province of Neuquén, which has presented a claim for
any shortfall in royalty payments resulting from this agreement. This claim was settled with the Province of Neuquen in December 2008.

Regulations to Secure the Supply of Diesel

Over the past several years, the Argentine government has passed various laws and adopted various initiatives aimed at guaranteeing the supply
of diesel fuel to the domestic market.

One government initiative aimed at securing local supply exempts diesel fuel imports intended for
domestic consumption from the fuel liquids and natural gas tax, as well as the diesel oil tax. The following laws exempted diesel fuel imports in the following amounts from such taxes: Law No. 26,022 (2005)  500,000 m3; Law No. 26,074 (2006)  800,000 m3 (subject to an additional exemption of 20% in 2007); Law No. 26,337 (2007) 
1,800,000 m3 (applicable in 2008, subject to an additional exemption of 20%). Exemptions under Law No. 26,337 are valid when the average monthly parity of diesel oil imports is not lower than
the ex-refinery price of diesel oil (excluding all taxes except VAT). SE Resolution No. 151/08 has also applied these exemptions to the first 500,000 m3of diesel fuel imported each year.

The Argentine government has also undertaken initiatives aimed at securing the supply of diesel fuel at subsidized, differential prices
for regulated-rate public transportation service providers. Following Decree No. 675/03 (as amended by Decrees Nos. 159/04, 945/04, 280/05 and 564/05), several agreements were subsequently signed whereby refining companies agreed to supply
diesel oil at lower than market prices, depending on the kind of services provided by the transportation companies. Decree No. 449/08 empowered the Jefe de Gabinete(Chief of Staff) to sign annual agreements extending the diesel fuel
subsidy to transportation companies for the fiscal year 2008. As of the date of this Annual Report, such an agreement signed between the Company and the Chief of Staff pursuant to Decree No. 449/08 is still in effect.



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In exchange for providing diesel fuel at below market prices, refining companies that entered
into agreements under Decree No. 449/08 had received direct compensation in the form of a credit on export duties, equivalent to the difference between the net revenues from the sale of diesel oil at the subsidized price and the net revenues
that would have been obtained from the sale of the same diesel oil volumes at market prices. Refining companies that process the crude oil they produce are entitled to direct compensation, calculated by deducting such compensation from any amount
payable for export duties. The applicable exchange rate is determined by the Chief of Staff and the right to compensation is determined by the SE.

Stability of Fuel Prices

In the early 2000s, in an effort to mitigate the impact of the significant increase in international prices for oil and petroleum by-products
on domestic prices and to ensure price stability for crude oil, gasoline and diesel oil, at the request of the Argentine government, hydrocarbon producers and refineries entered into a series of temporary agreements, which contained price limits
with respect to crude oil deliveries. By the end of 2004, in light of increases in the WTI, the Argentine government established a series of measures to ensure the supply of crude oil to local refiners at price levels consistent with the local
retail price of refined products.

Producers and refiners currently freely negotiate purchase and sale prices for oil.

Natural Gas

In
1992, the Natural Gas Act was passed, providing for the privatization of GdE and the deregulation of the price for natural gas. To carry out the privatization, the assets of GdE were divided among two new transportation companies and eight new
regional distribution companies. The transportation assets were divided into two systems on a geographical basis, the Northern and Southern pipeline systems, designed to give both systems access to gas sources and to main centers of demand,
including the Greater Buenos Aires region. A majority of the shares of each of the transportation and distribution companies was sold to private bidders.

The Natural Gas Act established a regulatory framework for the privatized industry and created ENARGAS, an autonomous entity under the
Ministry of Economy that is responsible for the regulation of the transportation, distribution, marketing and storage of natural gas.

Regulatory framework

Natural gas transportation and distribution companies operate in an open access, non-discriminatory environment under which
producers, large users and certain third parties, including distributors, are entitled to equal and open access to the transportation pipelines and distribution systems. In addition, concessionaires may transport their own gas production pursuant to
certain concessions granted under the Hydrocarbons Law.

The Natural Gas Act forbids gas transportation companies from buying and selling
natural gas. Additionally, gas producers, storage companies, distributors and consumers who contract directly with producers may not own a controlling interest (as defined in the Natural Gas Act) in a transportation company. Furthermore, gas
producers, storage companies and transporters may not own a controlling interest in a distribution company, and no seller of natural gas may own a controlling interest in a distribution or transportation company (unless such seller neither receives
nor supplies more than 20% of the gas received or transported, on a monthly basis, by the relevant distribution or transportation company).

Contracts between affiliated companies engaged in different stages of the natural gas industry must be reported to ENARGAS, which may only
decline to authorize such contracts if it determines that they were not entered into on an arms length basis.

ENARGAS

ENARGAS is an autonomous entity which functions under the Ministry of Economy and is responsible for a wide variety of regulatory matters
regarding the natural gas industry, including the approval and adjustment of rates and transfers of controlling interests in distribution and transportation companies. ENARGAS is governed by a board of directors composed of five full-time directors
appointed by the Argentine government subject to confirmation by the Argentine Congress.

On May 21, 2007 the Argentine government
announced that it was temporarily intervening in the operations of ENARGAS. Though the board of directors of ENARGAS continues to perform functions, as of the time of filing of this Annual Report, officials from the Argentine government currently
exercise control over ENARGAS in consultation with the board of directors. On January 13, 2016, through Decree No. 164/2016, the Argentine government extended the intervention of the ENARGAS for a period of 180 days.

ENARGAS has its own budget, which must be included in the Argentine national budget and submitted to Congress for approval. ENARGAS is funded
principally by annual control and inspection fees levied on regulated entities in an amount equal to the approved budget, net of collected penalties, and allocated proportionately to each regulated entity.



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Conflicts between regulated entities or between a regulated entity and a third party arising from
the distribution, storage, transportation or marketing of natural gas must first be submitted to ENARGAS for review. ENARGASs decisions may be appealed to the Ministry of Economy or to federal courts.

Rate Regulation

Summary

Since the enactment of the Public Emergency Law and other emergency measures in early 2002, the regulatory framework of public
utility tariffs has been radically modified, including the regulation of gas transportation and distribution services. A patchwork of conflicting regulations is currently in effect. Although the general rules on tariffs described in this section
remain in effect, in practice they have been supplemented by other laws described throughout this Regulation of Our Business section. We cannot predict which rules and regulations will remain in place if and when conflicting regulations
are revised.

Regulation of Natural Gas Distributors Prior to the Public Emergency Law

Prior to the enactment of the Public Emergency Law, provisions of the Natural Gas Act regulated the rates for gas transportation and
distribution services, including those of TGS. Tariffs to end-users consisted of the sum of three components: (i) the price of the gas purchased; (ii) a tariff for transporting gas from the production area through the distribution system;
and (iii) a distribution tariff. Under the Natural Gas Act and TGS license, TGS was permitted to adjust rates (i) semi-annually to reflect changes in the U.S. producer price index, and (ii) every five years in accordance with
efficiency and investment factors to be determined by ENARGAS. In addition, subject to ENARGASs approval, rates were regularly subject to adjustment to reflect cost variations resulting from changes in the tax regulations (other than income
tax) applicable to TGS, and for objective, justifiable and non-recurring circumstances. The ratemaking methodology contemplated by the Natural Gas Act and the TGS license is the price-cap with periodic review methodology, a type of
incentive regulation designed to allow regulated companies to retain a portion of the economic benefits arising from efficiency gains. This legal framework remains in effect, though it has been modified by the regulations described below.

UNIREN

The Public
Emergency Law pesified tariffs for public utility services at a Ps.1.00 = U.S. $1.00 parity and prohibited tariff indexation. Additionally, it authorized the Argentine government to renegotiate public utility services contracts. This authority was
later delegated by the Argentine government to the Ministry of Economy, which created, in July 2003, the UNIREN, for the purpose of assisting in the renegotiation process. The renegotiation of service contracts (several of which are still ongoing)
must take into account the following criteria, among others:



| |  |  | impact of tariffs on economic competitiveness and on income distribution;
| | - |  | -------------------------------------------------------------------------



| |  |  | quality of services to be provided and/or the capital expenditure programs provided for in the contracts;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | interest of customers and accessibility to services;
| | - |  | ----------------------------------------------------



| |  |  | the safety of the systems; and
| | - |  | ------------------------------



| |  |  | the companys profitability.
| | - |  | ----------------------------

On October 1, 2003, the Argentine Congress enacted a
bill allowing the Argentine government to set public utility rates until the completion of the renegotiation process.

On
February 16, 2016, the new administration, through Decree No. 367/16, dissolved the UNIREN and transferred the responsibility of renegotiating public service agreements to the ministries with jurisdiction over the relevant activity. It
also empowered such ministries jointly with the Ministry of Economy and Public Finance to conclude partial renegotiation agreements and temporary price and tariff adjustments that are necessary to ensure the continuity of the normal provision of the
corresponding public services, until the completion of the comprehensive renegotiation process, which shall be effected as an advance of future increases pursuant to the comprehensive tariff review.

Pursuant to Resolution No. 31/16 of the Ministry of Energy and Mining, TGS and the ENARGAS are expected to conclude the renegotiation
process within twelve months following the issuance of Resolution No. 3,724/16, on March 31, 2016. See Gas and EnergyGas and TransportationTGSTariff Renegotiation Process.



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Modifications to the regulatory framework

On February 16, 2004, the Argentine government, through Decree No. 180/04, modified the regulatory framework for the Argentine gas
industry. The decree authorized the SE to take any necessary measures to maintain an adequate level of services in the event of a supply crisis. In addition, Decree No. 180/04 provided for:



| |  |  | the creation of a trust fund (to be funded by tariffs payable by users of the service, special credit programs and contributions from direct beneficiaries) to finance the expansion of the industry and the creation of an
electronic market;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the creation of an electronic wholesale market to coordinate spot transactions for the sale of natural gas and secondary market transactions for transportation and distribution of natural gas; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a prohibition on distributors or their shareholders from having a controlling participation in more than one gas dealer.
| | - |  | ------------------------------------------------------------------------------------------------------------------------

On December 3, 2008, Decree No. 2,067/08 created the trust fund to ensure the availability of natural gas imports as required to
meet domestic supply needs.

On October 4, 2010, ENARGAS Resolution No. 1,410/10 incorporated modifications to the mechanism for
release of natural gas, mainly prioritizing demand corresponding to residential consumers and CNG. Accordingly, each distributor may apply daily volumes above the commitments set by Ministry of Federal Planning Resolution No. 599/07. ENARGAS
Resolution No. 1,410/10 also enables carriers to reallocate volumes injected into the transportation system.

On November 14,
2011, ENARGAS Resolution No. 1,982/11 increased the amount to be received by the trust fund created by Decree No. 2,067/08 beginning in December 2011, and expanded the customer base reached.

On April 26, 2013, the Commission approved the general rules applicable to the Gas Program I by Resolution 3/13, establishing a price of
7.50 U.S.$/MMBTU for natural gas excess injection. Furthermore, on November 29, 2013, the Commission enacted Resolution 60/13 (later modified in March 2014, through Resolution No. 22/2014), which created the Gas Program II.

Adjustment of Natural Gas Price at the Wellhead

Decree No. 181/04 instructed the SE to design a framework for the normalization of prices of natural gas
at wellhead. The decree authorized the SE to negotiate a price framework for the adjustment of prices in sales to distributors. Natural gas prices for residential consumers were excluded from this process. It also authorized the SE to create a new
category of users who must buy gas directly from producers.

Prices resulting from this framework are used as a reference for calculating
royalties and are used by ENARGAS in calculating any necessary adjustments in tariffs that result from variations in the price of gas. In addition, Decree No. 181/04 required that all agreements for the sale of natural gas be filed with the
electronic gas market, and granted authority to the SE to regulate the sale of gas (i) between producers and (ii) between producers and their associates.

Pursuant to Decree No. 181/04, in April 2004 the SE entered into an agreement with natural gas producersapproved by SE Resolution
No. 208/04that regulated the price of natural gas by sector, and that called for the complete deregulation of the wellhead price of natural gas by January 1, 2007. Under the April 2004 agreement, natural gas producers were required
to provide minimum supply volumes to the local market, including (i) distributors for industrial users, (ii) clients of distributors, or new direct consumers, and (iii) local electric power generators. Additionally, this agreement
required producers to report all supply agreements to the SE.

In 2007, upon expiration of the 2004 agreement, the SE and the producers
signed a new Natural Gas Producers Agreement. This agreement modified the proposed scope of gas price deregulation, and established set prices, under which the 2005 price was maintained for the residential segment, and an annual average
increase was to be established at approximately 6.5% for the compressed natural gas, generation and industrial segments (though the price for gas in the industrial segment remained freely negotiable). The implementation of this agreement was
staggered by segment and the last supply commitment to expire was that for residential supply, on December 31, 2011.

In 2008, the
Argentine government introduced the Gas Plus program to create an incentive for producers participating in the aforementioned supply agreements to increase production in unexploited areas, areas under exploitation with particular
geologic characteristics (e.g., tight gas), areas that had not been in production since 2004, or new fields in areas otherwise under production (pursuant to SE Resolution No. 24/08). Gas produced in these new areas is not
subject to the same conditions imposed by the aforementioned natural gas producers agreement, thus permitting more favorable pricing.

On May 23, 2005, pursuant to SE Resolution No. 752/05, the SE established a mechanism by which new direct consumers were entitled to
buy natural gas directly from producers as from August 1, 2005. SE Resolution No. 1,886/06 subsequently extended this mechanism through December 31, 2016. New direct consumers were allowed to buy natural gas in the electronic gas
market, which was originally created for spot transactions but now permits long-term operations. In order to purchase gas in the electronic market, new direct customers were required to post irrevocable purchase orders that provided for:
(i) terms of at least 36 months, (ii) prices of at least export parity, and (iii) volume of at least 1,000 m3 per day.



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If the irrevocable offer is not accepted, the SE may require export producers to provide natural
gas for a period of six months pursuant to the prices approved by Resolution No. 599/07 of the Ministry of Federal Planning. Transportation companies are prohibited from transporting natural gas for export purposes as long as the domestic
supply of natural gas is not satisfied.

Resolution No. 1/13 of the Commission created the Gas Program I, pursuant to which
beneficiary companies commit to increase the total volumes of natural gas injected into the domestic market during the proposed period, according to the values calculated in their respective projects and approved by the Commission. Once the project
is in effect, Resolution No. 1/13 provides for compensation for injection surplus and a penalty in the event that the applicable company, in any given period, has not increased production consistent with its commitment.

Companies registered in the Registry created by Decree No. 1,277/12 may submit applications for the Gas Program I, subject to the terms
and conditions for access established in the annex of Resolution No. 1/13 of the Commission. Companies that apply must indicate:



| | (i) | the calculation of base injection (natural gas volume proposed in connection with the project that the relevant starting point for calculation be the surplus injection duties assumed by the company);
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | the duration of the project, which shall not exceed five years, renewable at the request of the company, upon a decision by the Commission;
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | the calculation of adjusted basis injection (according to a rate of decline that will be calculated for each company in MMm3/d), for the proposed period;
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | the calculation of base price (weighted average price for the year 2012 from natural gas prices set for each consumer segment of the domestic market);
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | (v) | the calculation of the weighted average for each month of validity of Gas Program of prices of natural gas sold by the company, established for each consumer segment of the domestic market, which will be
used to determine compensation.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Commission may require applying companies to provide additional clarifications as
deemed necessary, as well as to adjust or modify all or part of the proposal submitted. The Commission will then evaluate the project in question, considering the particular situation of each company, and whether the project meets the project
objectives.

Commission Resolution 3/13 approved the general rules applicable to the Gas Program I. Under such program, producers were
required to submit their projects for an increase in total natural gas injection for a maximum period of five years, with a view to increase production and achieving higher activity and employment levels in the sector. A price of U.S.$7.50/MMBTU was
established for natural gas excess injection, with penalties involving LNG imports in the case of non-compliance with committed volumes.

Furthermore, the Commission enacted Resolution 60/13 (later modified through Resolution No. 22/2014), which created the Gas Program II.
Under this program, producers were required to submit projects to increase natural gas production levels no later than April 30, 2014. Such program is directed to companies without previous production or with a maximum injection limit of 4 MMm3/d, with price incentives in the case of production increases and penalties involving LNG imports in the case of non-compliance with committed volumes. Moreover, companies eligible for the Gas Program
I and meeting the relevant requirements were entitled to request withdrawal from Gas Program I and admission to Gas Program II.

In August
2014, the Ministry of Economy and Public Finance, through Resolution No. 139/2014, introduced additional changes to Resolution No. 60/2013, including, among other amendments, the elimination of the previous injection limit and setting of
two annual registration periods. We requested to participate in this program and were registered through Resolution No. 13/2015 issued by the Secretary of Economic Policy and Development Planning of the Ministry of Economy and Public Finance.

On April 7, 2014, the SE issued Resolution No. 226/2014 to implement a Program for the Rational Use of Natural Gas, whereby
subsidies to producers who participate in the plan adopted under Commission Resolution No. 1/2013 are reduced through the implementation of a new price schedule for the residential and CNG segments. The program encourages a reduction in
consumption by residential users by maintaining the current tariff if users reduce consumption by more than 20% compared to the previous year, or by applying a partial increase (50% with respect to the increase applied to users who do not reduce
consumption at all) if users reduce between 5% and 20%. If there is no reduction in consumption, the new price schedule for the residential segment will be rolled out in stages, with a first stage beginning in April 1, 2014, a second stage
beginning in June 1, 2014 and a third stage beginning in August 1, 2014, with average increases of 150%, 300% and 500%, respectively. Users located within the distribution area covered by Camuzzi Gas del Sur or any sub-distribution company
in the South of Argentina were not made subject to the price increases because their distribution area is subject to colder temperatures year-round. As regards the CNG sector, the schedule provides for increases of 24%, 36% and 48% for each partial
increase. In April 2016, Resolution No. 28/2016 of the Ministry of Energy and Mining increased the



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natural gas prices for the residential segment, representing an average increase of approximately 500%. This new regulation also encourages a reduction in consumption by residential users by
applying tariff discounts in the range of 20% to 50% to users that reduce comsumption by 15% or more compared to the previous year. Additionally a social tariff for low income users was set.

On October 31, 2014, Commission Resolution No. 231/2014 established that the price for natural gas intended for CNG consumption will
be adjusted on a monthly basis tracking increases in the average price for high grade gasoline above 93 RON or any other product that replaces it in the future, as provided in the Resolution. Prices of CNG will be published on the website of the SE.
In April 2016, Resolution No. 34/2016 of the Ministry of Energy and Mining repealed Resolution No. 231/2014 and increased the price of natural gas intended for CNG consumption establishing a pricing scheme per basin, with prices ranging
between U.S.$4.80/MMBTU and U.S.$5.70/MMBTU, representing increases between 200% and 250%. These prices were set in pesos and no monthly update was established.

Restrictions on Gas Exports

The Public Emergency Law created a withholding tax on exports of hydrocarbons for five years from March 1, 2002, which was subsequently
extended for five years from January 2007 pursuant to Law No. 26,217. The taxes withheld are deducted from the sales price of the exported hydrocarbons. In May 2004, a 20% withholding rate was imposed on gas exports. In July 2006, the Ministry
of Economy increased the rate to 45% and instructed the customs administration to apply the price fixed by the framework agreement between Argentina and Bolivia (approximately U.S.$6 per million British thermal units (MMBtu) in December
2007) as the reference price to calculate this tax, irrespective of the actual transaction price. In addition, on October 10, 2006, the Ministry of Economy imposed prevalent export duties on exports from the Tierra del Fuego province, which
were previously exempted from taxes. Moreover, in May 2007, the Ministry of Economy increased to 25% the export duty on butane, propane and LPG.

Resolution No. 127/08 of the Ministry of Economy, effective July 11, 2008, increased export duties on natural gas exports from 45%
to 100%, establishing a valuation basis for the calculation of the duty as the highest price established in any contract of any Argentine importer for the import of gas (including the reference price set by the framework agreement between Argentina
and Bolivia). Resolution No. 127/08 provides with respect to LPG products that if the international price, as notified daily by the SE, is below the reference price, the applicable export duty for such product will be 45%. If the international
price exceeds the reference price, the producer shall be allowed to collect the maximum amount established for the relevant product, the balance being withheld by the Argentine government as an export tax. Resolution No. 60/2015 of the Ministry
of Economy reduced the withholding tax on LPG exports from 45% to 1%.

Compressed Natural Gas for Vehicles

Distributors cannot supply gas stations with CNG. Instead, gas stations are required to purchase CNG in the electronic wholesale market
pursuant to a mechanism of irrevocable purchase orders designed to conceal the identity of buyers and sellers, where buyers are able to make joint offers. If any purchase orders are not satisfied through this system, exports of natural gas will be
diverted to cover unsatisfied demand. This mechanism remains in force as of the date of this Annual Report and is expected to continue until the SE determines that it is no longer necessary, in light of the status of the domestic supply of natural
gas.

Liquefied Petroleum Gas

Prior to the enactment of Law No. 26,020 on April 8, 2005, the Argentine LPG market was regulated by the Hydrocarbons Law and
regulations issued by the Undersecretary of Fuels. Under SE Resolution No. 52/01, the SE was responsible for enforcing the rules and regulations applicable to the LPG industry and an LPG board, which reported to the National Refining and
Marketing Board, which, in turn, reported to the Undersecretary of Fuels, was in charge of supervising and auditing the industry.

Law No. 26,020 established a new regulatory framework for the LPG industry. This new regime regulates the production, fractioning,
transportation, storage, distribution and sale of LPG. The SE is responsible for enforcement of Law No. 26,020, and may delegate supervision and control tasks to ENARGAS. The relevant portions of this law are summarized below:



| |  |  | Prices: The SE determines reference prices (which must be below export parity prices) for the domestic market (by region, on a seasonal basis every six months), with the goal of securing regular supply in that market,
and may establish price stabilization mechanisms to avoid domestic price fluctuations.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Market limitations: The SE and the CNDC are authorized to analyze the sector, for the purpose of fixing limits at each stage of vertical integration of the industry.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Open Access: An open access regime is established in connection with the storage of LPG and the SE establishes terms and conditions for the determination of maximum storage tariffs.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Imports/Exports: No restrictions are imposed and no prior authorization is required for the import of LPG, and the SE may authorize the export of LPG without restriction, so long as domestic market demand is satisfied.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | Trust Fund: A trust fund was established to subsidize the consumption of LPG by the low-income residential sector and expanding the distribution network to areas without service. The trust is to be funded from the
proceeds of sanctions collected under this law and contributions from the national budget.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Disposition No. 168/05 of
the Undersecretary of Fuels extends the domestic supply and export restrictions applicable to other hydrocarbons under SE Resolution No. 1,679/04 to LPG producers. However, as of the date of this Annual Report, domestic supply mandates and
export restrictions have not been extended to the LPG market.

SE Resolution No. 792/05 set forth two seasonal periods (winter and
summer), fixing reference prices for each period. Additionally, it divided the country into three geographical areasNorth, Center and Southin which these prices are applied, as discussed above. It also approved a mechanism for the
determination of the export parity price and an exclusive price that applies to retailers only, calculated from an average of its purchases for the last 24-month period. Resolution No. 36/2015 of the SE modified the method for calculating the
prices of LPG products.

On October 1, 2008, SE Resolution No. 1,070/08 ratified the supplementary agreement between the SE and
LPG producers for contributions to the trust fund created by Law No. 26,020.

On January 5, 2012, SE Resolution No. 112/11
approved the agreement setting the price of LPG.

Electricity

Until 1990, virtually all of the electricity supply in Argentina was controlled by the public sector. In 1991, the Argentine government
undertook the privatization of state-owned electricity generation, transmission and distribution companies. In January 1992, the Argentine Congress enacted Law No. 24,065 (the Regulatory Framework Law), which established guidelines
for the restructuring and privatization of the electricity sector. The Regulatory Framework Law, which continues to provide the framework for regulation of the electricity sector, distinguished between the generation, transmission and distribution
of electricity as separate businesses and made each subject to its own regulatory framework.

The ultimate objective of the privatization
process was to reduce rates paid by users and improve the quality of the electricity supply service through competition. The privatization process commenced in February 1992 with the sale of several large thermal generation facilities, and continued
with the sale of transmission and distribution facilities (some of which we now own) and additional thermoelectric and hydroelectric generation facilities.

The Public Emergency Law, combined with the devaluation of the peso and high rates of inflation, had a severe effect on public utilities in
Argentina. Because public utilities were no longer able to increase tariffs, inflation led to decreases in their revenues in real terms and a deterioration of their operating performance and financial condition. Most public utilities had also
incurred large amounts of foreign currency indebtedness under the Convertibility Law regime and, following the devaluation of the peso, the debt service burden of these companies increased sharply, which led many of them to suspend payments on their
foreign currency debt in 2002. This situation caused many Argentine electricity generators, transmission companies and distributors to defer making further investments in their networks. As a result, Argentine electricity market participants,
particularly generators, are currently operating at near full capacity, which could lead to insufficient supply to meet a growing national energy demand.

To address the electricity crisis, the Argentine government has repeatedly intervened in and modified the rules of the MEM since 2002. These
modifications include the imposition of caps on the prices paid by distributors for electricity power purchases (pursuant to SE Resolution No. 8/02) and the requirement that all prices charged by generators be calculated based on the price of
natural gas (which are also regulated by the Argentine government), regardless of the fuel actually used in generation activities (pursuant to SE Resolution No. 240/03), which together have created a huge structural deficit in the operation of
the MEM.

In December 2004, the Argentine government adopted new rules for the electricity market (pursuant to SE Resolutions Nos. 826/04
and 712/04), to come into effect once the construction of two new 800 MW combined cycle generators had been completed. These two generators commenced commercial operations in open cycle during 2008 and in combined cycle during the first quarter of
2010. Construction was partially financed with credit balances of generators resulting from the spread between the sales price of energy and generation variable cost, which are transferred to the Fondo Para Inversiones Necesarias que Permitan
Incrementar la Oferta de Energía Eléctrica en el Mercado Eléctrico Mayorista (the fund for investments required to increase the electricity supply in the MEM, or FONINVEMEM).

Electricity generators accepted the opportunity under SE Resolution No. 1,427/04 to participate in the FONINVEMEM projects. PESA
contributed 35% of its credits accrued in the MEM during the 2004-2006 period for the construction of the combined cycle generators mentioned above, and earned the right to be a shareholder in the companies in charge of these projects.



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The construction of these new generators evidences a decision by the Argentine government to take
a more active role in promoting energy investments in Argentina. In addition to these projects, in April 2006 the Argentine congress enacted a law that authorized the Argentine government to create a special fund to finance infrastructure
improvements in the Argentine energy sector through the expansion of generation, distribution and transmission infrastructure relating to natural gas, propane and electricity. Contributions to this fund are made through cargos específicos(specific charges) passed on to customers as an itemization on their energy bills.

In 2006 the SE implemented the Energy Plus Program
(pursuant to SE Resolution No. 1,281/06) to create an incentive for increased electricity generation. Projects implemented under the Energy Plus Program are not subject to market regulations regarding prices. Instead, prices can be freely
negotiated between generators and users.

The Energy Plus Program seeks to increase electricity generation and satisfy domestic demand.
For that purpose, CAMMESA requires that all large users (those consuming more than 300 kW) purchase their incremental demand (any volumes exceeding their 2005 consumption) from new generators under the Energy Plus Program.

In addition, the Argentine government has issued certain further regulations in this area. Through Decree No. 140/07, it created the
Rational and Efficient Electric Power Usage Program (PRONUREE), which consists of several measures to promote and raise public awareness about the need to make rational and efficient use of electric power. And through Law
No. 26,350, it modified the official time zone for the summer periods, in order to promote a decrease in the use of electric power.

In order to increase the electric power supply, the Argentine Government has also established a program called Delivered Electric Energy,
through the supply of small transportable thermal plants and/or embarked power plants.

The Argentine Government has additionally
continued to implement various measures in order to regulate the operation of the MEM and of the intervening agents. The most recent of these measures is SE Resolution No. 95/13, whereby new values for the remuneration of fixed and variable
costs to be paid to generators, co-generators and self-generators for energy sales are set, and an additional remuneration is added. These values will not be applicable to bi-national hydroelectric power plants, to nuclear generation or to
generation committed to in contracts regulated by the SE, such as those under the Energy Plus Program. This resolution has temporarily suspended new contracts under the MEM Term Market, other than those regulated by the SE, and it provides that upon
the termination of existing contracts in the Term Market, large users must purchase their energy demand from CAMMESA. In addition, the resolution provides that commercial management and fuel delivery to the MEM plants will be centralized in CAMMESA.
Resolution No. 95/2013 of the SE, as amended by Resolution No. 529/2014 of the SE, has been updated on several occasions to reflect increases to the remuneration of generators.

In December 2015, through Decree No. 134/2015, the Argentine government declared a state of emergency with respect to the national
electricity system that will remain in effect until December 31, 2017. The state of emergency allows the Argentine government to take actions designed to guarantee the supply of electricity in Argentina such as instructing the Ministry of
Energy and Mining to elaborate and implement, with the cooperation of all federal public entities, a coordinated program to guarantee the quality and security of the electricity system and rationalize public entities consumption of energy.

Regulatory Authorities

The principal regulatory authorities responsible for the Argentine electricity market are:

(1) the Ministry of Energy and Mining, which has assumed the functions of the SE of the Ministry of Federal Planning;

(2) the ENRE; and

(3) CAMMESA.

The SE advised the Argentine government on matters related to the electricity sector and was responsible for the application of the
policies concerning the Argentine electricity industry. On December 11, 2015, Decree No. 13/2015 modified the Ministries Law No. 22,520. Among other changes, it created the Ministry of Energy and Mining, which assumed the functions of
the Secretariats of Energy and Mining and other decentralized entities under the review of the former Ministry of Federal Planning, Public Investment and Services (in effect through December 11, 2015). The responsibilities of the Ministry of
Energy and Mining include participating in the management of the States shareholdings in the corporations and companies operating in the area of its competence.

The ENRE is an autonomous agency created by the Regulatory Framework Law. The ENRE has a variety of regulatory and jurisdictional powers,
including, among others:



| |  |  | enforcement of the Regulatory Framework Law and related regulations;
| | - |  | --------------------------------------------------------------------



| |  |  | control of the delivery of electric services and enforcement of the terms of concessions;
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| |  |  | adoption of rules applicable to generators, transmitters, distributors, electricity users and other related parties concerning safety, technical procedures, measurement and billing of electricity consumption,
interruption and reconnection of supplies, third-party access to real estate used in the electricity industry and quality of services offered;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | prevention of anticompetitive, monopolistic and discriminatory conduct between participants in the electricity industry;
| | - |  | ------------------------------------------------------------------------------------------------------------------------



| |  |  | imposition of penalties for violations of concessions or other related regulations; and
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | arbitration of conflicts between electricity sector participants.
| | - |  | -----------------------------------------------------------------

The ENRE is managed by a
five-member board of directors appointed by the Argentine government. Two of these members are nominated by the Consejo Federal de la Energía Eléctrica(Federal Council on Electricity, or the CFEE). The CFEE is
funded with a percentage of revenues collected by CAMMESA for each MWh sold in the market. Sixty percent of the funds received by the CFEE are reserved for the Fondo Subsidiario para Compensaciones Regionales de Tarifas a Usuarios Finales(regional tariff subsidy fund for end users), from which the CFEE makes distributions to provinces that have met certain specified tariff provisions. The remaining forty percent are used for investments related to the development of electrical
services in the interior of Argentina.

CAMMESA oversees the operation of the MEM. CAMMESA was created in July 1992 by the Argentine
government, which currently owns 20% of its capital stock. Various associations that represent MEM participants, including generators, transmitters, distributors, large users and electricity brokers, own the remaining 80%.

The Wholesale Electricity Market

Overview

The SE
established the MEM in August 1991 to allow electricity generators, distributors and other agents to buy and sell electricity in spot transactions or under long-term supply contracts at prices determined by the forces of supply and demand.

The MEM consists of:



| |  |  | a term market in which generators, distributors and large users enter into long-term agreements on quantities, prices and conditions;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a spot market, in which prices are established on an hourly basis as a function of economic production costs, represented by the short-term marginal cost of production measured at the Ezeiza 500 kV substation, the
systems load center; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a stabilization system for spot market prices applicable to purchases by distributors, which operates on a quarterly basis.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------

Operation of the MEM

In addition to having the responsibility of coordinating the dispatch operations in the MEM, CAMMESA is in charge of:



| |  |  | managing the SIN (as defined below) pursuant to the Regulatory Framework Law and related regulations, which includes:
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | determining technical and economic dispatch of electricity in the National Interconnection System (the SIN);
| | - |  | --------------------------------------------------------------------------------------------------------------



| |  |  | maximizing the systems security and the quality of electricity supplied;
| | - |  | -------------------------------------------------------------------------



| |  |  | minimizing wholesale prices in the spot market;
| | - |  | -----------------------------------------------



| |  |  | planning energy capacity needs and optimizing energy use pursuant to the rules set out from time to time by the SE; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------



| |  |  | monitoring the operation of the term market and administering the technical dispatch of electricity pursuant to any agreements entered into in such market;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | acting as agent of the various MEM participants;
| | - |  | ------------------------------------------------



| |  |  | purchasing or selling electricity from or to other countries by performing the relevant import/export operations; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | providing consulting and other services related to these activities.
| | - |  | --------------------------------------------------------------------

CAMMESAs operating
costs are covered by mandatory contributions made by MEM participants. CAMMESAs annual budget is subject to a mandatory cap equivalent to 0.85% of the aggregate amount of transactions in the MEM projected for that year.

MEM Participants

The main participants in the MEM are generation, transmission and distribution companies. Large users and traders also participate in the MEM,
but to a lesser extent. Transmitters, Distributors and Large Users participate in CAMESSA by appointing two acting and two alternate directors.



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Generators

Total electricity generation in Argentina during 2015, including imports and exports, totaled 136,798 GWh, out of which 63% was attributable to
thermoelectric plants, 30% to hydroelectric plants, 5% to nuclear plants and 2% other sources.

Transmitters

Electricity is transmitted from power generation facilities to distributors through high voltage power transmission systems. Transmitters do
not purchase or sell electricity. Transmission services are governed by the Regulatory Framework Law and regulations issued by the SE.

In
Argentina, transmission is carried at 500 kV, 220 kV and 132 kV through the SIN. The SIN consists primarily of overhead lines and sub-stations and covers approximately 90% of the country. The majority of the SIN, including almost all of the 500 kV
transmission lines, has been privatized and is owned by Transener. Regional transmission companies, most of which have been privatized, own the remaining portion of the SIN. Supply points link the SIN to distribution systems, and there are
interconnections between the transmission systems of Argentina, Brazil, Uruguay and Paraguay allowing for the import or export of electricity from one system to another.

Distributors

The largest
distribution companies are Empresa Distribuidora de Energía Sur S.A. (EDESUR) and Empresa Distribuidora y Comercializadora Norte S.A. (EDENOR).

Each distributor supplies electricity to consumers and operates the related distribution network in a specified geographic area pursuant to a
concession. Each concession establishes, among other things, the area, quality of service required, rates paid by consumers for service and an obligation to satisfy demand. ENRE monitors compliance by federal distributors with the provisions of
their respective concessions and with the Regulatory Framework Law, and provides a mechanism for public hearings at which complaints against distributors can be heard and resolved. In turn, provincial regulatory agencies monitor compliance by local
distributors with their respective concessions and with local regulatory frameworks.

Distributors participate in CAMMESA by appointing
two acting and two alternate directors Argentine Association of Electric Power Distributors.

Large users

The MEM classifies large users of energy into three categories: Grandes Usuarios Mayores(Major Large Users, or GUMAs),
Grandes Usuarios Menores (Minor Large Users, or GUMEs) and Grandes Usuarios Particulares(Particular Large Users, or GUPAs).

GUMAs are required to purchase 50% of their demand through supply contracts and the remainder in the spot market, while GUMEs and GUPAs are
required to purchase all of their demand through supply contracts.

Large users participate in CAMMESA by appointing two acting and two
alternate directors through Argentine Association of Electric Power Large Users.

Traders

Since 1997, traders are authorized to participate in the MEM by intermediating block sales of energy. Currently, there are eight authorized
traders in the MEM, several of which conduct transactions with Comercializadora de Energía del Mercosur S.A. (CEMSA) in the export market.

Spot Market

Spot prices

The emergency
regulations enacted after the Argentine crisis in 2001 had a significant impact on energy prices. Among the measures implemented were the pesification of prices in the MEM, known as the spot market, and the requirement that all spot prices be
calculated based on the price of natural gas, even in circumstances where alternative fuel such as diesel is purchased to meet demand due to the lack of supply of natural gas. Despite these modifications, the basic framework for the spot market that
was established prior to the economic crisis remains in place.

Under this system, energy prices in the spot market are set by CAMMESA,
which determines the price charged by generators for energy sold in the spot market of the MEM on an hourly basis. The spot price reflects supply and demand in the MEM at any given time, which CAMMESA determines using different supply and demand
scenarios that dispatch the optimum amount of available supply, taking into account the restrictions of the transmission grid, in such a way as to meet demand requirements while seeking to minimize the production cost and the cost associated with
reducing the risk of system failure.



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The spot price set by CAMMESA compensates generators according to the cost of the last unit to be
dispatched for the next unit as measured at the Ezeiza 500 Kv substation, which is the systems load center and is in close proximity to the City of Buenos Aires. Dispatch order is determined by plant efficiency and the marginal cost of supply.
In determining the spot price, CAMMESA also considers the different costs incurred by generators not in the vicinity of the City of Buenos Aires.

In addition to energy payments for actual output at the prevailing spot market prices, generators receive compensation for capacity placed at
the disposal of the spot market, including stand-by capacity, additional stand-by capacity (for system capacity shortages) and ancillary services (such as frequency regulation and voltage control).

Seasonal Prices

The
regulations implemented in the wake of the Argentine economic crisis of 2001 also made significant changes to the seasonal prices charged to distributors in the MEM, including the implementation of a cap (which varies depending on the category of
customer) on the cost of electricity charged by CAMMESA to distributors at a price significantly below the spot price charged by generators.

Prior to implementation of the emergency regulations, seasonal prices were regulated by CAMMESA as follows:



| |  |  | prices charged by CAMMESA to distributors and large users changed only twice a year (in summer and winter), with interim quarterly revisions in case of significant changes in the spot price of energy, despite prices
charged by generators in the MEM fluctuating constantly;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | prices were determined by CAMMESA based on the average cost of providing one MW of additional energy (its marginal cost) and several other factors; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | CAMMESA would use seasonal database and optimization models in determining the seasonal prices and would consider both anticipated energy supplies and demand as follows:
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | in determining supply, CAMMESA would consider energy supplies provided by generators based on their expected availability, committed imports of electricity and the availability declared by generators;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | in determining demand, CAMMESA included the requirements of distributors and large users purchasing in the MEM as well as committed exports.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------

In January 2016, the Ministry of Energy and Mining, through Resolution No. 6/2016, established new seasonal reference prices of power and
energy in the MEM for the period from February 1, 2016 through April 30, 2016. Furthermore, such resolution established a stimulus plan, with lower reference prices for monthly residential demand which consumption is reduced by at least
20% compared to the same month in 2015 and a social tariff.

Stabilization Fund

The stabilization fund, managed by CAMMESA, absorbs the difference between purchases by distributors and large users at seasonal prices and
payments to generators for energy sales at spot prices. When the spot price is lower than the seasonal price, the stabilization fund increases, and when the spot price is higher than the seasonal price, the stabilization fund decreases. The
outstanding balance of this fund at any given time reflects the accumulation of differences between the seasonal price and the hourly energy price in the spot market. The stabilization fund is required to maintain a minimum amount to cover payments
to generators if prices in the spot market during the quarter exceed the seasonal price.

Billing of all MEM transactions is performed
monthly through CAMMESA, which acts as the clearing agent for all purchases between participants in the market. Generally, payments to generators are made approximately 40 days after the end of each month by CAMMESA.

The stabilization fund was adversely affected as a result of the modifications to the spot price and the seasonal price made by the emergency
regulations, pursuant to which seasonal prices were set below spot prices, resulting in large deficits in the stabilization fund. This deficit has been financed by the Argentine government through loans to CAMMESA and by generators through
contributions to the FONINVEMEM.



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Term market

Historically, generators were able to enter into agreements in the term market to supply energy and capacity to distributors and large users.
Distributors were able to purchase energy through agreements in the term market instead of purchasing energy in the spot market. Term agreements typically stipulated a price based on the spot price plus a margin. Prices in the term market were at
times lower than the seasonal price that distributors were required to pay in the spot market. However, as a result of the emergency regulations, spot prices are currently higher than seasonal prices, particularly with respect to residential
tariffs, making it unattractive to distributors to purchase energy under term contracts while prices remain at their current levels.

Argentine
Taxation

General Overview

Holders of exploration permits and production concessions are subject to federal, provincial, and municipal taxes and regular customs duties on
imports. The Hydrocarbons Law grants such holders a legal guarantee against new taxes and certain tax increases at the provincial and municipal levels. Permit holders and concessionaires must pay an annual surface tax based on the area held. For
more detail on concession fees and royalties, see Royalties above.

Oil and gas exploration and production activities in
Argentina are subject to the following taxes:



| |  |  | An annual surface tax based on the area held, which varies depending on the permit and concession terms.
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | An income tax of 35% of net income.
| | - |  | -----------------------------------



| |  |  | A VAT of 21% for the domestic sale of oil and gas (exports have a zero percent VAT).
| | - |  | ------------------------------------------------------------------------------------



| |  |  | A provincial tax, at an average rate of 3% of gross domestic sales (exports are excluded).
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | A national minimum income tax of 1% of the value of the assets that the company owns as of December 31 of each year. Certain assets, such as shares and interests in other companies subject to the same tax, are
exempt. Assets located in the jurisdiction of the Province of Tierra del Fuego are also exempt. The income tax paid as determined for the same economic year is considered to be payment against this tax.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A provincial stamp tax applied to written agreements entered into within the provincial jurisdiction, at rates varying between 0.3% and 2.5% of the economic value of the relevant agreement.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A withholding tax on crude exports, as described under Export Taxes below.
| | - |  | -----------------------------------------------------------------------------



| |  |  | A tax on debits and credits applicable to bank account transactions and other banking transactions used as a replacement for current accounts. The generally applicable rate is 0.6% on each debit or credit transaction
(although, in some cases, it increases to 1.2% or decreases to 0.075%).
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A tax on personal property that applies to the shares or other stakes of Argentine companies held by foreign companies or individuals, at a rate of 0.5% of the value of such assets.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | A surveillance fee applicable to downstream activities and transportation of liquid hydrocarbons and their derivatives through pipelines, as described under Surveillance Fee below.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition, the net profit (as defined in the Hydrocarbons Law) of holders of permits or concessions accruing from activity of
such holders might be subject to the application of a special 55% income tax. This tax has never been applied, although each permit or concession granted after this tax came into place provided that the holder thereof is subject to it. Although a
decree of the Argentine government provides that we are subject to the general Argentine tax regime, our permits and concessions were granted prior to the entry in force of this tax and this has never been enforced.

Following the introduction of market prices for downstream petroleum products in connection with the deregulation of the petroleum industry,
Law No. 23,966 established a volume-based tax on transfers of certain types of fuel, replacing the prior regime, which was based on the regulated price. Law No. 25,745, effective as of August 2003, modified the mechanism for calculating
this tax, replacing the old fixed value per liter according to the type of fuel with a percentage to apply to the sales price, maintaining the old fixed value as the minimum tax. Decree No. 2579/2014 reduced taxes on gasoline and diesel by 10%,
and water infrastructure fund taxes applicable to transfers of gasoline products by 20%.

Dividends distributed by us to our shareholders,
in excess of the Companys taxable accumulated income for the previous fiscal year, whether in cash, property or other equity securities, and any other payment in kind, are subject to income tax withholding at the rate of 35% in respect of such
excess (Equalization Tax). This is a final tax and it is not applicable if dividends are paid in shares (acciones liberadas).

In addition, dividends paid by us to our Argentine individual shareholders and undivided estates as well as to our foreign shareholders are
subject to tax at a 10% rate. The 10% tax rate is calculated over the net dividend after giving effect to the Equalization Tax.

Holding
of our shares by individuals resident in Argentina or abroad and corporations, any type of legal entity, enterprise, permanent establishment, estate or resident abroad shall be subject to a personal assets tax on those holdings by December 31
every year. The tax basis shall be the percentage net equity of each shareholder, and the tax rate is 0.5%. We act as a substitute obligor and pay the tax. The Argentine government is entitled to recover the amount paid through withholding or by
foreclosing on the assets that generated the tax liability.



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Export Taxes

In 2002, the Argentine government imposed customs duties on the export of hydrocarbons. Export tax rates on crude oil were increased to 20%, on
butane, methane and LPG, and to 5% on gasoline and diesel fuel. In May 2004, Resolution No. 337/04 of the Ministry of Economy increased export duties on crude oil to 25%. These export tax rates were increased again in 2004, when the Ministry of
Economy issued Resolution No. 532/04, establishing a progressive scheme of export duties for crude oil, with rates ranging from 25% to 45%, depending on the quotation of the WTI reference price at the time of the exportation. In addition, in
May 2004, pursuant to Resolution No. 645/04 of the Ministry of Economy, an export duty on natural gas and natural gas liquids was established at a rate of 20%. In July 2006, the Ministry of Economy increased the rate to 45% and instructed the
customs administration to apply the price fixed by the framework agreement between Argentina and Bolivia (approximately U.S.$6/MMBTU in December 2007) as the reference price to calculate this tax, irrespective of the actual transaction price. In
addition, on October 10, 2006, the Ministry of Economy imposed prevalent export duties on exports from the Tierra del Fuego province, which were previously exempted from taxes. Moreover, in May 2007 the Ministry of Economy increased to 25% the
export duty on butane, propane and LPG. There can be no assurance as to future levels of export taxes.

Resolution No. 394/07 of the
Ministry of Economy, effective as of November 16, 2007, increased export duties on Argentine exports of crude oil and other crude derivatives. This regime provided that when the international price exceeded the reference price, which was fixed
at U.S.$60.90 per barrel, the producer would be allowed to collect U.S.$42 per barrel, the remainder being withheld by the Argentine government as an export tax. If the international price of Argentine oil exports (as defined by the regulator) was
under the reference price but over U.S.$45 per barrel, a 45% withholding rate applied to all amounts over U.S.$45. If such price was under U.S.$45 per barrel, the applicable export tax was to be determined within 90 business days. A similar
withholding regime applied to exports of oil by-products such as gasoline, fuel oil and lube oils, with different cut-off and reference prices.

Resolution No. 127/08 of the Ministry of Economy, effective July 11, 2008, increased export duties on natural gas exports from 45%
to 100%, establishing a valuation basis for the calculation of the duty as the highest price established in any contract of any Argentine importer for the import of gas (including the reference price set by the framework agreement between Argentina
and Bolivia mentioned above). Resolution No. 127/08 of the Ministry of Economy provides with respect to LPG products (including butane, propane and blends thereof) that if the international price of the relevant LPG product, as notified daily
by the SE, is under the reference price established for such product in the resolution (U.S.$338/m3 for propane, U.S.$393/m3 for butane and
U.S.$363/m3 for blends of the two), the applicable export duty for such product will be 45%. If the international price exceeds the reference price, the producer shall be allowed to collect the
maximum amount established by the resolution for the relevant product (U.S.$223/m3 for propane, U.S.$271/m3 for butane and U.S.$250/m3 for blends of the two), the balance being withheld by the Argentine government as an export tax.

On January 7, 2013, Resolution No. 1/13 of the Ministry of Economy modified Resolution No. 394/07. According to Resolution
No. 1/13, the after-tax revenues which the producer is allowed to collect were increased to U.S.$70 per exported barrel, as long as the international price of crude oil and other crude oil derivatives is greater than or equal to U.S.$80 per
barrel. If that price is lower, the applicable withholding rate will be 45%.

In October 2014, through Resolution No. 803/14, the
Ministry of Economy and Finance amended Resolution No. 394/07 and modified the withholding tax on hydrocarbon exports linking the rate (ranging from 10% to 13%) to a specific price schedule.

Resolution No. 1077/14 of the Ministry of Economy and Public Finance became effective on January 1, 2015, superseding Resolutions
No. 394/07 and No. 803/14 and providing that for so long as the international price of crude oil is less than U.S.$71 per barrel, the withholding tax rate shall be 1%, and incremental tax rates will apply for so long as the international
price of crude oil is equal to or higher than U.S.$71 per barrel.

Surveillance Fee

Law No. 25,565 imposed a surveillance fee payable to the SE for downstream activities, equal to Ps.0.0003 for each commercialized
transaction in the domestic market, and for the transportation of liquid hydrocarbons and their derivatives through pipelines, at a rate of 0.35% of the estimated income for the provision of transportation service.

Argentine Environmental Regulations

The environmental legal framework comprises Sections 41 and 43 of the Argentine Constitution, as well as federal, provincial and municipal
laws. According to Section 41 of the Argentine Constitution, the Argentine government establishes the minimum standards for protection of the environment, while the provinces and municipalities are responsible for establishing specific
standards and implementing regulations. Please note that, in addition to the regulations described below, certain other regulations may also apply depending on the location of the oil and gas reserves.



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International Treaties

Argentina is a member state to several international treaties concerning environmental matters that may impact our business. Argentina has
undertaken several obligations in connection with the protection of the environment, the preservation of biological diversity and the implementation of sustainable development.

Such treaties include: (i) the Basel Convention on the Control of Transboundary Movements of Hazardous Waste and its Disposal (1989);
(ii) the United Nations Framework Convention on Climate Change adopted in Rio de Janeiro (1992); (iii) the Montreal Protocol of Substances that Deplete the Ozone Layer (1989); (iv) the Kyoto Protocol (a protocol to the United Nations
Framework Convention on Climate Change) (1997), the Doha Amendment (2012); and (v) the Stockholm Agreement on Persistent Organic Polluting Agents (2001).

Federal Environmental Laws

In accordance with Section 41 of the Argentine Constitution, federal laws establishing minimum standards for environmental protection have
been enacted. These laws provide a general framework for the legislation to be enacted by local jurisdictions, which must satisfy the minimum standards contained therein.

General Environmental Policy Law

The General Environmental Policy Law (Law No. 25,675), enacted in November 2002, established minimum standards for the protection of the
environment, the preservation of biological diversity and sustainable development.

The main purpose of the General Environmental Policy
Law is the promotion of the rational and sustainable use of natural resources and the establishment of procedures and mechanisms to minimize environmental risks, prevent and mitigate environmental emergencies and redress damages caused by
environmental pollution.

The General Environmental Policy Law requires that any work or activity capable of significantly degrading the
environment or its components or which may adversely affect the quality of life, shall be subject to a prior environmental impact evaluation. All entities must provide information related to the environmental impact of their activities and this
information shall be publicly available, unless declared classified.

Entities carrying out activities dangerous to the environment and
ecosystems must take out insurance policies for the damages such activities may cause. Any person liable for environmental damages must take the actions necessary to restore the status quo ante,and where such restoration is not possible, the
indemnification determined by the courts shall be transferred to an environmental restoration fund for the execution of remedial works.

Hazardous Waste

Law No. 24,051 regulates the generation, manipulation, transport, treatment and final disposition of hazardous wastes generated or located
under federal jurisdiction or, if located in the territory of a province, that could affect individuals or the environment in other provinces other than the one where they were generated, or when the adoption of sanitary measures to handle such
waste becomes necessary and it is advisable to unify those measures throughout the country due to their economic impact.

With respect to
hazardous waste liability, hazardous waste is considered to have inherent risk (as contemplated by section 1,757 of the Argentine Civil and Commercial Code), which means that the generator or handler of hazardous waste will only be exonerated from
its liability to the extent it proves the victims or third parties negligence or willful misconduct. The law establishes severe civil and criminal sanctions for any infringement of Law No. 24,051.

Integral Management of Industrial and Services Activities Wastes

Law No. 25,612 establishes minimum standards for environmental protection with respect to the integral management of waste originated in
industrial or service activities. It sets forth minimum environmental protection requirements for generation, handling, storage, transport, treatment and final disposal of the aforementioned wastes. It also maintains the Argentine
Constitutions prohibition on the importation, introduction, or transportation into the country, its airspace and seas, of any types of wastes from other countries.

In general terms, Law No. 25,612 sets a system of tort liability equivalent to that of Law No. 24,051 described under
Hazardous Wasteabove. Infringements of this law may be subject to warnings, fines, closure, suspension of activities for up to one year and definitive withdrawal of authorizations and registrations in the applicable registers. In
the case of legal entities, board members and managers may be held severally liable for such penalties.



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Air Pollution

Law No. 20,284 applies in federal jurisdictions and in those provinces which have adopted the provisions of this law. It sets general
principles for the treatment of potential sources of air pollution. Enforcement of this law is vested in the respective national, provincial or local health authorities.

Water Environmental Management

Law No. 25,688 sets minimum standards for the preservation of water, its exploitation and rational use. It defines the different uses of
waters and requires users to obtain permits from local authorities.

Additionally, it provides that a federal enforcement agency shall
determine: (i) maximum limits for contamination and protection of aquifers, (ii) instructions for the refilling and protection of aquifers, and (iii) the fixing of parameters and environmental standards for the quality of waters.

PCB Elimination and Management

Law No. 25,670, enacted in October 2002, regulates the management and elimination of polychlorinated biphenyls (PCBs). It
forbids the entry of PCBs and machines containing PCBs into Argentina as well as the installation of machines containing PCBs. According to Law No. 25,670, the Argentine government is empowered to take all measures necessary to guarantee the
prohibition of the production, commercialization and the entry of PCBs into Argentina, as well as the elimination of used PCBs and the decontamination and elimination of PCBs and machines containing PCBs within the terms provided therein.

Specific Environmental Regulations of Oil and Gas Industries

SE Resolution No. 105/92 contains specific regulations and procedures for the protection of the environment during oil and gas exploration
and exploitation.

During exploration, companies must prepare an environmental impact report to be filed with the SE, and no drilling
activity may be carried out before filing such environmental impact report. Once oil and gas fields are discovered, companies must prepare an environmental assessment report also to be filed with the SE. Thereafter, environmental reports are to be
filed with the SE on an annual basis.

The SE has also issued rules, including, among others, on environmental safety of oil tanks, well
abandonment, sinks workover, venting of gases and hydrocarbons transportation.

Provincial regulations

Provinces in exercise of their powers have issued various rules applicable in their respective territories that regulate both the general and
specific environmental aspects of the oil and gas industry.

Concealment and Money Laundering

Law No. 25,246 categorizes money laundering as a crime, which is defined as the exchange, transfer, management, sale or any other use of
money or other assets obtained through a crime, by a person who did not take part in such original crime, with the potential result that such original assets (or new assets resulting from such original assets) appear as if they have been obtained
through legitimate means, provided that the aggregate value of the assets involved exceeds in the aggregate (through one or more related transactions) Ps.300,000.

Law No. 25,246 assigns information and control duties to certain private sector entities, such as banks, agents, stock exchanges and
insurance companies, according to the regulations of the Financial Information Unit, and for financial entities, the Central Bank. These regulations apply to many Argentine companies, including us. These obligations consist mainly of maintaining
internal policies and procedures aimed at preventing money laundering and the financing of terrorism, especially through the application of know your customer policies.

Among other duties, each financial entity is required to establish a control and money laundering prevention committee and to
appoint a senior official responsible for money laundering prevention policies, who shall be in charge of centralizing and processing any information that the Central Bank and/or the Financial Information Unit may require.

Furthermore, financial entities are required to report to the Financial Information Unit any transaction that may be considered suspicious or
unusual, which lacks economic or legal justification, or involves unjustified complexity. Financial entities must pay special attention to transactions arising from or relating to jurisdictions included in the Central Banks list of
non-cooperating jurisdictions. As of the date of this Annual Report, Myanmar is the only jurisdiction included in such list.

Law No. 25,246 has been amended by Law Nos. 26,087 and 26,119.



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Venezuelan Regulatory Framework

The Venezuelan state owns all hydrocarbon fields and has established methods for regulating the exploitation of hydrocarbons in Venezuelan
fields that are different from those in Argentina.

The Gas Hydrocarbons Organic Law published on September 23, 1999
regulates the exploitation of free or non-associated gas and the transport, distribution, collection, storage, industrialization, handling and internal and external sale of associated gas (gaseous hydrocarbon that is extracted jointly with crude
oil) and free or non-associated gas (hydrocarbon that is extracted from a field which does not contain crude oil), allowing private sector participation in these activities.

The Venezuelan Constitution, in force since December 1999, contains provisions related to petroleum activity, including Article 12, which
states that oil fields are property of the Venezuelan state, and Article 302, which reserves petroleum activity to the Venezuelan state. The Constitution gives PDVSA, a state-owned entity, responsibility for managing petroleum activity.

The Hydrocarbons Organic Law published on November 13, 2001 effectively reversed most prior related legislation, except for
the Gas Hydrocarbons Organic Law, and purported to grant ample opportunity for the private sector to participate in the industry, limiting the activities reserved to the Venezuelan state to primary activities (which include exploration, extraction
and initial transport and storage) and to the sale of crude oil and specific products.

The Hydrocarbons Organic Law regulates the
exploration, exploitation, refining, industrialization, transport, storage, sale and conservation of hydrocarbons and refined products. The law sets forth the following principles: (i) hydrocarbon fields are public property;
(ii) hydrocarbon activities entail public utility and are of social interest; and (iii) activities described in the law are subject to decisions of the Venezuelan state adopted in connection with international treaties.

The Performance of Hydrocarbon Related Activities

Primary activities expressly reserved by law for the Venezuelan state can only be performed by (i) the government of Venezuela;
(ii) wholly-owned state entities; or (iii) companies in which the Venezuelan state maintains direct control by owning at least fifty percent of the shares or quotas of capital stock. The sale of natural hydrocarbons and certain specified
by-products can only be performed by wholly-owned state entities. Installations and existing facilities dedicated to the refining of natural hydrocarbons in the country and to the transportation of products and gas are owned by the Venezuelan state.

The National Assembly must grant approval to mixed companies before they can operate. These entities must meet the following minimum
conditions: (i) they must have a maximum duration of 25 years; (ii) they must provide information regarding location, orientation and the extent of the area under operation; (iii) all of their assets must be reserved and turned over
to the Venezuelan state once the activity ends; and (iv) any dispute among their shareholders must be resolved through private negotiations or arbitration and shall be subject to the laws of Venezuela.

Prior to April 2006, our interest in Venezuelan oil and gas fields was through operating service agreements with PDVSA, which established the
terms of our compensation for production activities and investments. These contracts were awarded during bidding rounds in 1994 and 1997. In 2005, the Venezuelan government announced that these operating service agreements did not comply with the
Hydrocarbons Organic Law and instructed the Ministry of Energy and Petroleum to commence negotiations with private operators to convert all operating agreements into mixed companies where more than 50% of each field is state-owned. These
negotiations were completed in March 2006, and as a result, all our operating service agreements were converted to mixed companies in which the Venezuelan government, through the Comisión Venezolana del Petróleo (the
CVP), holds at least 60% of the share capital and private companies hold the remaining. The interests allocated to private companies were determined on the basis of the value attributed to the different operating service agreements
during the negotiations.

The National Assembly has approved (i) the principal terms of the conversion agreements and the form of
organizational documents for the mixed companies; (ii) amendments to the Hydrocarbons Organic Law and certain tax laws to allow the mixed companies to sell their production of crude oil to PDVSA and its associates and to qualify as exporters
for VAT purposes; and (iii) the Law for Regulating the Participation of Private Entities in Primary Activities, which limits private company participation in primary activities in Venezuela, including the exploration and production of
hydrocarbons, to participation through mixed companies.

Licenses and permits

A license from the Venezuelan Ministry of Energy and Oil is required to refine natural hydrocarbons, and permits from this ministry are
required for activities related to the processing or domestic sale of refined hydrocarbons.



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Relevant Tax Features

Income tax

Venezuelan
income tax law imposes tax at a rate of 50% on the net taxable income of persons involved in hydrocarbon-related activities, or activities related to the purchase or acquisition of hydrocarbons and by-products for export. Accelerated amortization
and depreciation of fixed assets and direct or indirect expenses necessary for the drilling of oil wells is permitted.

Contractors
dedicated to exploration and production activities under operating agreements with state companies are also subject to a 50% rate.

Recent
tax reforms, effective as from the 2016 fiscal year, eliminated the inflation adjustment system for special tax payers, such as companies related to the oil sector. Additionally, in determining the net taxable income, previous fiscal years losses
can be ofsett only by 25% from current income.

Value-Added Tax

Subject to certain exceptions, in particular for exporting companies, imports and local purchases of goods and services are subject to VAT at a
rate of 12%, with a limited number of goods and services subject to VAT at a rate of 8%.

Municipal taxes

Hydrocarbon activities are not subject to municipal taxes, as these taxes are exclusively reserved for the national government.

Income from contractors that have entered into operating contracts with state companies for the rehabilitation of marginal fields is generally
subject to a municipal tax on gross income.

Royalties

Since January 2002, royalties on oil and gas production have been set at a rate of 30%.

Special Contributions from Mixed Companies

Mixed companies are subject to the following special taxes: (i) a 3.33% additional royalty on the volume of hydrocarbons extracted under
the concession and delivered to PDVSA; during the calendar year and (ii) an amount equivalent to the difference, if any, between (a) 50% of the value of the hydrocarbons extracted under the concession and delivered to PDVSA each calendar
year, and (b) the aggregate payments made by the mixed company to Venezuela in connection with activities conducted by the mixed company during such calendar year, such as royalties applicable on extracted hydrocarbons (including the additional
royalty indicated in the preceding item (i), income tax and any other tax or contribution calculated on the basis of income (either gross or net), and investments in domestic development projects amounting to one percent (1%) of profit
before taxes).

In 2011, the Venezuelan government enacted Decree No. 8,807/12, amending the Law of Special Contribution to
Extraordinary Prices in the International Hydrocarbons Market, which had introduced a special tax payable by companies exporting or transporting liquid hydrocarbons and oil by-products outside Venezuela, to be applied when the average price of
the basket of Venezuelan liquid hydrocarbons exceeded a stated price. Decree No. 8,807/12 modified the special tax by creating two special contributions, one for extraordinary prices and another for exorbitant prices, to
be applied to the difference between the price set forth by the Venezuelan national budget and the monthly average of international prices of the basket of Venezuelan liquid hydrocarbons. In 2013, the Venezuelan government reformed the Decree,
introducing modifications and updating the rates of these specials contributions. Under such Decree, when the monthly average of international prices of the basket of Venezuelan liquid hydrocarbons exceed U.S.$80 per barrel, these are considered
exorbitant prices. These special contributions are recorded by mixed companies as selling expenses in their financial statements and negatively impact the mixed companies.

OPEC

Venezuela is
a founding member of OPEC. In the past, PDVSA, under instructions from the Ministry of Energy and Oil, has adjusted its own production to ensure that Venezuela complies with production quotas set by OPEC.

The Venezuelan government has created a policy of strict compliance with the production quotas established by OPEC. Article 6 of the
Hydrocarbons Organic Law requires all persons who perform activities regulated by the Hydrocarbons Organic Law to comply with production cuts, such as those that may be set by OPEC. Hence any production cuts may directly affect private producers,
contractors, PDVSA and mixed companies.



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Exchange Controls

On February 5, 2003, the Venezuelan government introduced exchange controls. These regulations state that companies established for the
purpose of developing any of the activities described in the Hydrocarbons Organic Law may maintain accounts in currencies other than the currency of Venezuela in banking or similar institutions outside of Venezuela only for purposes of meeting their
obligations outside Venezuela. The Central Bank of Venezuela must approve these accounts. Any other foreign currency generated by these companies must be sold to the Central Bank of Venezuela. These companies cannot acquire foreign currency from the
Central Bank of Venezuela to make foreign currency payments. These same exchange controls are applicable to mixed companies.

Additional Matters

Companies operating in the hydrocarbons sector in Venezuela that meet certain income thresholds are also required to contribute a percentage of
gross income to scientific, technological and research programs. Hydrocarbon companies operating as mixed companies are also required to contribute to social programs. Additionally, employers of more than 50 employees are required to contribute to
social programs aimed at reducing drug trafficking and substance abuse.

Bolivian Regulatory Framework

In Bolivia, the petroleum and gas industry is regulated by the System of Regulation by Sectors (the SIRESE), which regulates,
controls and supervises telecommunications, electricity, hydrocarbons, transportation and water activities, to ensure that they operate efficiently and protect the interests of users, service providers and the Bolivian state by contributing to the
development of the country. In May 2005, a new hydrocarbons law, Law No. 3,058, was enacted, which, among other things, significantly increased taxes for companies in the industry. The law imposed an 18% royalty and a 32% direct tax on
hydrocarbons applicable on 100% of production. These new taxes were imposed in addition to applicable taxes under existing Law No. 843.

In May 2006, the Bolivian government enacted Supreme Decree No. 28,701, which provided, among other things, for the nationalization of
hydrocarbon resources in Bolivia. This decree mandated that as of May 1, 2006, oil companies had to deliver all property related to hydrocarbon production for sale to the national operator, YPFB. In addition, this decree provided that the
Bolivian state would recover full participation in the entire oil and gas production chain and to that end provided for the nationalization of the shares of stock necessary for YPFB to have at least 50% plus one of the shares in a number of
companies.



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ORGANIZATIONAL STRUCTURE

The following diagram illustrates the corporate organizational structure of PESA and its subsidiaries, associates and joint ventures, as of
the date of this Annual Report:



LOGO

In addition to the companies included in this chart, we have holding companies in Spain, Bolivia, the
Cayman Islands and Argentina, which are not reflected in the chart. Some of our material subsidiaries and associates are held through such holding companies.



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The following diagram illustrates the ownership structure of PESA as of the date of this Annual Report:



LOGO

PROPERTY, PLANT AND EQUIPMENT

PESA has freehold and leasehold interests in various countries in South America, but there is no specific interest that is individually
material to the Company. The majority of our property, consisting of oil and gas reserves, service stations, a refinery, petrochemicals plants, power plants, manufacturing facilities, stock storage facilities, pipelines, oil and gas wells, and
corporate office buildings, is located in Argentina. As of the date of this Annual Report, we also have interests in crude oil and natural gas operations outside Argentina, in Venezuela and Bolivia.



|Item 4A. | UNRESOLVED STAFF COMMENTS
|-------- | -------------------------

None.



|Item 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------- | --------------------------------------------

The following discussion should be read in
conjunction with, and is entirely qualified by reference to, our Audited Consolidated Financial Statements and the notes thereto. Our Audited Consolidated Financial Statements were prepared in accordance with IFRS as issued by the IASB. See
Item 3. Key InformationSelected Financial DataPresentation of Financial Information in accordance with IFRS.



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ANALYSIS OF CONSOLIDATED RESULTS OF OPERATIONS

OVERVIEW

We are a leading energy company in Argentina focused on maintaining profitability and meeting our social and environmental responsibility
goals. We are engaged in:



| |  |  | oil and gas exploration and production;
| | - |  | ---------------------------------------



| |  |  | refining and distribution;
| | - |  | --------------------------



| |  |  | petrochemicals; and
| | - |  | -------------------



| |  |  | gas and energy.
| | - |  | ---------------

Our principal place of business has historically been Argentina, but as of
December 31, 2015 we also had operations in Venezuela, Bolivia and Ecuador. Approximately 81% of our total assets, 99% of our sales, 92% of our combined crude oil and gas production and 90% of our proved oil and gas reserves were located in
Argentina as of December 31, 2015. Fluctuations in the Argentine economy and actions adopted by the Argentine government have had and will continue to have a significant effect on Argentine private sector entities, including us. See Item
3. Key InformationRisk Factors.

Year to year fluctuations in our income are a result of a combination of factors, principally
including:



| |  |  | The volumes of crude oil, oil products and natural gas we produce and sell;
| | - |  | ---------------------------------------------------------------------------



| |  |  | Changes in international prices of crude oil and oil by-products, which are denominated in U.S. dollars;
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | Fluctuations in the Argentine peso/U.S. dollar exchange rate;
| | - |  | -------------------------------------------------------------



| |  |  | Interest rates;
| | - |  | ---------------



| |  |  | Changes to our capital expenditures plan and the related depreciation expense;
| | - |  | ------------------------------------------------------------------------------



| |  |  | Price and export controls on crude oil and oil by-products imposed by the Argentine government; and
| | - |  | ---------------------------------------------------------------------------------------------------



| |  |  | Changes in other laws or regulations affecting our operations, including with respect to tax and environmental matters.
| | - |  | -----------------------------------------------------------------------------------------------------------------------



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FACTORS AFFECTING OUR CONSOLIDATED RESULTS OF OPERATIONS

(1) Argentine Economic Situation

Fluctuations in the Argentine economy have had and will continue to have a significant effect on Argentine private sector entities, including
us. Specifically, we have been affected and might continue to be affected by Argentine tax regulations, the value of the peso against foreign currencies, inflation, interest rates, and the general political, social and economic environment in and
affecting Argentina.

(a) Value of the Peso Against Foreign Currencies

As of December 31, 2015, the peso-U.S. dollar rate of exchange was Ps.13.04 per U.S. dollar, compared to Ps.8.55 and Ps.6.49 per U.S.
dollar as of December 31, 2014 and 2013, respectively.

As of December 31, 2015, 2014 and 2013, a significant portion of our
financial debt was denominated in U.S. dollars. This situation exposes us to risks associated with the exchange rate. However, the impact on our results of operations derived from variations in the exchange rate related to our financial debt over
such periods was partially mitigated by gains recorded on certain financial assets maintained in U.S. dollars and on net investments in foreign operations denominated in foreign currency, which are disclosed in Shareholders Equity under
Other Comprehensive Income in the Consolidated Statement of Comprehensive Income.

Accordingly, the exchange differences for
fiscal years 2015, 2014 and 2013 accounted for net gains of Ps.40 million, Ps.307 million and Ps.171 million, respectively.

After several years of moderate variations in the nominal exchange rate, the peso lost more than 30% of its value with respect to the U.S.
dollar in each of 2013 and 2014, and in 2015, the peso lost approximately 52% of its value against the U.S. dollar, including a depreciation of approximately 35% mainly experienced after December 17, 2015 following the announcement of the
lifting of most foreign exchange controls. Since the devaluation in December 2015, the Central Bank has allowed the peso to float and limited interventions to those needed to ensure the orderly functioning of the foreign exchange market (See
Risk FactorsFactors Relating to ArgentinaFluctuations in the value of the peso could adversely affect the Argentine economy, and consequently, our results of operations or financial condition). As of April 15,
2016, the exchange rate was Ps.14.05 to U.S.$ 1.00. We are unable to predict the future value of the peso against the U.S. dollar.

See
Item 3. Key InformationRisk FactorsFactors Relating to ArgentinaEconomic and political instability in Argentina has affected and may continue to adversely affect our financial condition and results of operations. and
Fluctuations in the value of the peso could adversely affect the Argentine economy, and consequently, our results of operations or financial condition.

(b) Inflation

Historically, the Argentine economy has exhibited significant volatility, characterized by periods of high inflation.

In accordance with IFRS, our financial information has not been adjusted to reflect inflation.

According to inflation data published by the INDEC, from 2011 to 2014, the Argentine CPI increased 9.5%, 10.8% , 10.9% and 24.0% in each of
those years, respectively, and 11.9% in the ten-month period ended October 31, 2015. The WPI increased 12.7%, 13.1%, 14.8% and 28.3% in each of those years, respectively, and 10.6% in the ten-month period ended October 31, 2015. In
November 2015, the INDEC suspended the publication of the CPI and the WPI.

In January 2016, the new administration, through Decree
No. 55/2016, declared a state of administrative emergency in the national statistics system until December 31, 2016 and the new INDEC authorities announced the discontinuation of the methodology previously used to measure inflation, and
suspended the publication of all indices until the INDEC is in a position to calculate such indices based on adequate and reliable official data. The INDEC has suggested using CPI figures published by the Province of San Luis and the City of Buenos
Aires for reference, in the meantime. According to the Province of San Luis reports, the inflation rate was 2.9%, 6.5%, 4.2%, 2.7% and 3.0%, in November 2015, December 2015, January 2016, February 2016 and March 2016,
respectively. According to the City of Buenos Aires reports, the inflation rate was 2.0%, 3.9%, 4.1%, 4.0% and 3.3%, in November 2015, December 2015, January 2016, February 2016 and March 2016, respectively. See Item 3.
Key InformationRisk FactorsFactors Relating to ArgentinaEconomic and political instability in Argentina has affected and may continue to adversely affect our financial condition and results of operations.

Sustained inflation in Argentina, without a corresponding increase in the price of products sold by us in the domestic market, would have an
adverse effect on our results of operations and financial position. Inflation could also adversely affect comparability among the different periods presented herein and our productivity and profitability. See Item 3. Key
InformationSelected Financial DataConsideration of the effects of inflation and Item 3. Key InformationRisk FactorsFactors Relating to ArgentinaEconomic and political instability in Argentina has affected
and may continue to adversely affect our financial condition and results of operations.



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(2) Regulation of the Energy Industry in Argentina

Over the past several years, except for the period that followed the global financial crisis in the third quarter of 2008 and recently,
following the decrease in international oil prices, commodity prices of hydrocarbon products experienced an extended period of sustained increases. The Argentine government imposed a series of regulations, particularly focused on the energy sector,
aimed at reducing the impact of inflationary pressures from such high prices and seeking to ensure energy supplies to the domestic market. Recently, the Argentine government has adopted other regulations intended to mitigate the impact of lower
international prices on domestic oil and gas companies.

The level of government intervention in the economy may continue or increase,
which may affect Argentinas economy and, in turn, our business, results of operations and financial condition. See Item 3. Key InformationRisk FactorsFactors Relating to ArgentinaGovernment intervention in the Argentine
economy could adversely affect our results of operations or financial condition.

(a) Natural Gas

Resolution No. 599/07 of the SE approved the Natural Gas Producers Agreement to ensure sufficient supply to meet the domestic demand for
gas, and to the gradual recovery in prices in all market segments. This resolution established domestic market supply commitments for each producer and provided for successive maturities for each segment, with the residential supply commitment
expiring last, in 2011. As a result, each segments market share was uniformly distributed among producers and regulated prices remained low for the above-mentioned segments. The SE issued Resolution No. 172/11 on December 29, 2011,
which provided for a provisional extension until substitute measures were adopted. PESA continues, as of the date of this Annual Report, to be subject to the same supply commitments with respect to the priority Argentine domestic market demand.

With respect to the CNG segment, in August 2012 the SE, through Resolution No. 1,445/12, set a price relating to natural gas for CNG
services of Ps.0.4945 per cubic meter, representing an increase of approximately 300%, and provided for the investment of the additional resources obtained in the development of conventional gas resources.

In January 2007, through SE Resolution No. 1,886/07, the SE confirmed that hydrocarbon exports were contingent upon adequate satisfaction
of domestic demand and that export sales had to be authorized on a case-by-case basis by the Argentine government. See Item 3. Key InformationRisk FactorsFactors Relating to Our BusinessLimits on exports of hydrocarbons and
related oil products have affected and may continue to affect our results of operations.

Within the scope of the long-term gas
supply agreements entered into between the governments of Argentina and Bolivia whereby a gas price of U.S. $5/MMBtu was initially established, subject to adjustment pursuant to a formula based on international reference prices for gas and its
by-products, gas imports were placed under the responsibility of ENARSA. In order to avoid the impact of the price increase on domestic consumers, the Argentine government required that the increase in import gas prices be passed through to exports,
through an increase in withholding taxes. This was implemented in August 2006 through Resolution No. 534/2006 issued by the Ministry of Economy and Production, whereby the tax rate on natural gas exports was increased to 45% based on the price
for gas imports from Bolivia of U.S.$ 5/MMBtu. In March 2008, through Resolution No. 127/08 of the Ministry of Economy and Production the tax rate was increased to 100%, which rate was calculated using the highest price for natural gas imports
into Argentina, either gas imports from Bolivia or regasified liquefied natural gas (LNG) imports.

In September 2008, through Resolution
No. 1,070/08 of the SE, the Argentine government approved an agreement with natural gas producers for a reduction in the price of 10 kg butane cylinders. This agreement resulted in an increase in natural gas prices of 15% for residential users,
8% for CNG and 13% for electricity generation. The reduction in the LPG sales price is financed with contributions by producers, originally equivalent to 65% of the price increase resulting from the above resolution, and subsequently equivalent to
100% of such price increase as from December 2008. Under Resolution No. 1,417/08 of the SE, an 80% increase was imposed on the price applicable to a sector of the R3 residential segment beginning in November 2008. The Natural Gas Producers
Supplementary Agreement approved by Resolution No. 1,070/08 of the SE was renewed for 2010, 2011, 2012, 2013, 2014 and 2015. In 2015 the Argentine government, through Resolution No. 72/15 of the SE, discontinued the way in which it
subsidized residential LPG consumption (i.e. by means of increases in the price for producers) and implemented a direct subsidy for the benefit of certain end users.

In addition, a trust fund was created (pursuant to Decree No. 2,067/08) to cover natural gas imports required to secure supply to the
domestic market. The resulting expenses are borne by users of the regulated transportation and/or distribution services, by natural gas processing companies and by gas consumers receiving gas directly from producers without using natural gas
transportation or distribution systems.



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In October 2010, through ENARGAS Resolution I-1,410, the natural gas delivery method was
modified, placing a priority on supply to meet the residential and CNG segments demand. As a result, each distribution company was able to request volumes on a daily basis above committed volumes under the Natural Gas Producers Agreement
(pursuant to Resolution No. 599/07 of the SE). This was the only method to request natural gas from producers for the residential segment after expiration of the Natural Gas Producers Agreement in December 2011. In December 2011, the Argentine
government, through Resolution No. 172/2011 of the SE, unilaterally extended the terms of the Natural Gas Producers Agreements until substitute measures were adopted.

In November 2011, through ENARGAS Resolution No. 1,982, the amount to be received by the trust fund created under Decree
No. 2,067/08 was increased according to consumption levels, and the consumer base falling within the scope of the resolution was broadened. Subsequently, ENARGAS Resolution No. 1,991/2011 addressed large consumers falling within the scope
of such resolution and provided a method to request exclusion, if applicable. Consumption of natural gas at the Refinery in connection with oil refining activities, and at the Cóndor and Barda Las Vegas plants, in Santa Cruz, in connection
with natural gas processing, fell within the scope of the above resolution.

Law No. 26,741, which was passed in May 2012, declared
the achievement of self-sufficiency in hydrocarbons supply and the activities of exploration, exploitation, industrialization, transportation and marketing of hydrocarbons to be of public interest. In addition, YPFs and Repsol YPF Gas
S.A.s net assets were declared to be of public interest and Repsols interests in those entities became subject to expropriation in an amount equal to up to fifty one per cent (51%) of total equity.

By means of Decree No. 1,277/12, which was passed in July 2012, the Argentine government approved the regulations for the implementation
of Law No. 26,741 and issued the Rules of the Argentine Hydrocarbons Sovereignty regime. These rules provide for the development of a National Hydrocarbons Investment Plan with the stated goals of maximizing investment and ensuring
sustainability of related activities in the short, medium and long term, and created the Commission. In addition, Decree No. 1,277/12 abrogated certain sections of Decree Nos.1,055/89, 1,212/89 and 1,589/89 that had provided for the free
availability of hydrocarbons produced in granted concession areas, free commercialization of hydrocarbons products in the domestic and foreign markets, and the freedom to set prices. As of the date of this Annual Report, the Company has complied
with all applicable reporting requirements set forth in Decree No. 1,277/12.

In February 2013, the Commission issued Resolution
No. 1/2013 establishing the Gas Program I. Under such program, producers were required to submit their projects for an increase in total natural gas injection for a maximum period of five years, with a view to increasing production and
achieving higher activity and employment levels in the sector. A price of U.S. $7.50/MMBTU was established for natural gas excess injection, with penalties involving LNG imports in the case of non-compliance with committed volumes. PESA
submitted its project but ultimately did not participate in the program.

In November 2013, through Resolution No. 60/2013 (modified
in March 2014 by Resolution No. 22/2014), the Commission created the Gas Program II. Producers were required to submit projects to increase natural gas production levels no later than April 30, 2014. Such program was directed to companies
without previous production or with a maximum production of 4 MMm3/d, with price incentives in the case of production increases and penalties involving LNG imports in the case of non-compliance
with committed volumes. Moreover, companies eligible for the Gas Program I and meeting the relevant requirements were entitled to request withdrawal from Gas Program I and admission to Gas Program II.

In August 2014, the Ministry of Economy and Public Finance, through Resolution No. 139/2014, introduced additional changes to Resolution
No. 60/2013, including, among other amendments, the elimination of the previous injection limit and setting of two annual registration periods. We requested to participate in this program and were registered through Resolution No. 13/2015
issued by the Secretary of Economic Policy and Development Planning of the Ministry of Economy and Public Finance.

On April 7, 2014,
the SE issued Resolution No. 226/2014 to implement a Program for the Rational Use of Natural Gas, whereby subsidies to producers who participate in the plan adopted under Commission Resolution No. 1/2013 are reduced through the
implementation of a new price schedule for the residential and CNG segments. The program encourages a reduction in consumption by residential users by maintaining the current tariff if users reduce consumption by more than 20% compared to the
previous year, or by applying a partial increase (50% with respect to the increase applied to users who do not reduce consumption at all) if users reduce between 5% and 20%. If there is no reduction in consumption, the new price schedule for the
residential segment will be rolled out in stages, with a first stage beginning in April 1, 2014, a second stage beginning in June 1, 2014 and a third stage beginning in August 1, 2014, with average increases of 150%, 300% and 500%,
respectively. Users located within the distribution area covered by Camuzzi Gas del Sur or any sub-distribution company in the South of Argentina were not made subject to the price increases due to weather conditions in the area. As regards the CNG
sector, the schedule provides for increases of 24%, 36% and 48%, respectively, for each partial increase. In April 2016, Resolution No. 28/2016 of the Ministry of Energy and Mining increased the natural gas prices for the residential segment,
representing an average increase of approximately 500%. This new regulation also encourages a reduction in consumption by residential users by applying tariff discounts in the range of 20% to 50% to users that reduce comsumption by 15% or more
compared to the previous year. Additionally a social tariff for low income users was set.



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On October 31, 2014, Resolution No. 231/2014 of the Commission established that the
price for natural gas intended for CNG consumption will be adjusted on a monthly basis tracking increases in the average price for high grade gasoline above 93 RON or any other product that replaces it in the future, as provided in such resolution.
Prices of CNG are published on the website of the SE. In April 2016, Resolution No. 34/2016 of the Ministry of Energy and Mining repealed Resolution No. 231/2014 and increased the price of natural gas intended for CNG consumption
establishing a pricing scheme per basin, with prices ranging between U.S.$4.80/MMBTU and U.S.$5.70/MMBTU, representing increases between 200% and 250%. These prices were set in pesos and no monthly update was established.

In December 2015, the new administration dissolved the Commission. Certain of the Commissions functions and duties were assumed by the
Ministry of Energy and Mining. Through Decree No. 272/2015, the Ministry of Energy and Mining is tasked with completing a comprehensive review of the rules relating to the registration and disclosure requirements applicable to companies
operating in the oil and gas sector. However, until any changes in laws or regulations are enacted, we are uncertain as to how any such changes may affect our business and results of operations. Changes made in connection with the Ministry of Energy
and Minings review, or any further changes in the regulatory framework, may have an adverse effect on the business, revenues and operations of companies operating in the Argentine oil and gas sector, including us.

(b) Withholding Taxes on Exports

Taxes withheld are deducted from the sales price of exported hydrocarbons. The Public Emergency Law established withholding taxes on exports of
hydrocarbons to last for five years from March 1, 2002, which period was subsequently extended for five years beginning in January 2007 and five further years beginning in January 2012 pursuant to Law No. 26,217 and No. 26,732,
respectively.

This tax regime was modified by Resolution No. 394/07 issued by the Ministry of Economy in November 2007, which
provided for the application of an incremental withholding tax rate to crude oil exports.

In October 2014, through Resolution
No. 803/14, the Ministry of Economy and Public Finance amended Resolution No. 394/07, modifying the withholding tax on hydrocarbon exports to link the rate (ranging from 10% to 13%) to a specific price schedule.

Resolution No. 1,077/14 of the Ministry of Economy and Public Finance became effective on January 1, 2015, superseding Resolutions
No. 394/07 and No. 803/14 and providing that for so long as the international price of crude oil is less than U.S.$71 per barrel, the applicable withholding tax rate shall be 1%, and incremental tax rates will apply for so long as the
international price of crude oil is equal to or higher than U.S.$71 per barrel.

Natural gas exports are taxed under Resolution
No. 127/08 of the Ministry of Economy (which amended Resolution No. 534/06). Natural gas exports are subject to a withholding tax levied at 100% of the highest price set for natural gas under any applicable agreement for natural gas
imports into Argentina. Under Resolution No. 127/08, the method for calculating withholding taxes on exports of crude oil, under Resolution Nos. 394/07 and 1/13, is also applicable to LPG. Resolution No. 60/2015 of the Ministry of Economy
reduced withholding tax on LPG exports from 45% to 1% and Resolution No. 36/2015 of the SE modified the method for calculating the prices of LPG products.

See Item 3. Key InformationRisk FactorsFactors Relating to Our BusinessExport taxes on our products have negatively
affected, and may continue to negatively affect, the profitability of our operations.

(c) Downstream Margins

Downstream margins declined significantly after the enactment of the Public Emergency Law in January 2002. Since that time, the Argentine
government has actively intervened in the fuel market to secure domestic supply and limit increases in the price of gasoline and diesel at the retail level in the domestic market. See Item 3. Key InformationRisk FactorsFactors
Relating to Our BusinessLimitations on local pricing in Argentina may adversely affect our results of operations.

In order to
secure domestic supply, in the face of growing demand and the inability of Argentine refineries to significantly increase production levels, in 2006 the Secretary of Domestic Commerce promulgated Resolution No. 25/06, which required refining
companies to supply all diesel market demand with a baseline equal to the demand for the same month of the prior year, plus an estimated market variation.

Under Law No. 26,022, diesel imports and sales in the domestic market of volumes imported during 2006 and 2007 were exempt from taxes on
liquid fuels, natural gas and diesel, and from other taxes. During subsequent years, this exemption was incorporated into the Argentine Budget Law and the SE has since issued several resolutions proposing that hydrocarbon market operators
participate in this regime. PESA relied on this tax exemption to import 162,563 cubic meters of diesel in 2013 and 170,733 cubic meters of liquid fuel in 2014. In March 2015, the Ministry of Economy issued Resolution No. 35/2015 revoking the
tax exemption on imported diesel and gasolines as from January 2015.



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Commencing in 2007, the Argentine government allowed gradual increases in fuel prices, which
facilitated a partial recovery in our margins. On April 10, 2013, Resolution No. 35/13 of the Secretary of Domestic Commerce set maximum sales prices for liquid fuels for a period of six months, later extended for 45 additional days
(Resolution No. 108/13).

In January 2014, following the depreciation of the peso against the U.S. dollar, domestic oil and fuel
prices temporarily decreased. International crude oil and related oil product prices declined significantly during the second half of 2014. As a result, in October 2014, the Ministry of Economy issued Resolution No. 803/14, which was later
superseded by Resolution No. 1,077/14, setting forth a reduced withholding tax schedule to ensure the hydrocarbon industrys profitability and investment level in order to achieve self-sufficiency. Furthermore, the Argentine government
issued Decree No. 2579/2014, reducing fuel transport taxes on certain diesel and unleaded gasoline products, and water infrastructure fund taxes that apply to transfers of certain unleaded gasoline products. In January 2015, retail prices in
pesos on diesel and gasoline were reduced by 5%.

Domestic oil prices dropped by U.S.$7 per barrel in the first quarter of 2015 compared
to the price in effect as of December 31, 2014. In addition, on February 4, 2015 the Commission issued Resolution 14/2015 creating the Crude Oil Production Stimulus Program (Programa de Estímulo a la Producción de
Petróleo Crudo), to be in effect from January 1, 2015 to December 31, 2015 providing for export and/or production stimulus payments for registered companies subject to certain requirements. Furthermore, in March 2015, the
Ministry of Economy issued Resolution No. 35/2015 revoking the tax exemption on imported diesel and gasolines as from January 2015.

On December 31, 2015, the BRENT crude oil price fell below U.S.$38 per barrel, representing approximately a 28% decrease compared to the
2015 average price of U.S.$ 52.30 per barrel. Domestic crude oil prices decreased by an additional 10% in 2016, compared to the price in effect as of December 31, 2015, resulting in a price of U.S.$67.50 and U.S.$54.90 per barrel for
Medanito and Escalante crude oil, respectively. However, as of the date of this Annual Report, domestic crude oil and refined products prices exceed in general the international prices for such products.

On March 9, 2016 the Ministry of Energy and Mining issued Resolution No. 21/2016 creating an export stimulus program for Escalante
crude oil surplus (i.e., after domestic demand is satisfied) from the San Jorge Gulf Basin, effective from January 1, 2016 through December 31, 2016. The additional compensation to which such exports are entitled is to be paid for each
shipment provided that the average price of Brent oil does not exceed U.S.$47 per barrel in the period beginning two days prior to such shipment and ending two days after such shipment. The compensation to be paid by the Argentine government to
eligible exporters amounts to U.S.$7.50 per barrel, as long as the criteria is met.

We cannot assure you that the Argentine government
will not make further regulatory changes that could adversely affect our downstream margins.

(d) Electricity Generation

With the enactment of the Public Emergency Law, the Argentine government implemented the pesification of dollar-denominated prices
in the MEM, and set a cap on prices that could be charged for gas used in electric power generation. As a result of this regulation, electricity prices failed to reflect total generation costs. This discrepancy led to the gradual depletion of the
Stabilization Fund (Fondo de Estabilización), causing an increasing deficit, which in turn prevented CAMMESA from settling accounts normally with market agents.

In an effort to reduce the Stabilization Fund deficit, the Argentine government initially made contributions to the fund and reinstated
seasonal adjustments, recognizing some of the increased costs resulting from the recovery of natural gas prices pursuant to applicable regulations in the determination of wholesale spot prices. Subsequently, the SE encouraged MEM creditors to
participate in investments in electric power generation in order to increase the available supply of electric power generation in Argentina. For this purpose, two investment funds were organized, FONINVEMEM I and II. The financing of FONINVEMEM I
and II was made through the contribution of 35% and 50% of the credit balances recorded in the 2004-2006 period and in the year 2007, respectively, resulting from the spread between the selling price of energy and the variable generation cost in the
spot market. The total contribution by all wholesale electric market private creditors is estimated at U.S.$530 million for all periods, of which PESA contributed U.S.$55 million, dedicating U.S.$39 million to FONINVEMEM I and U.S.$16 million to
FONINVEMEM II.

On October 17, 2005, under the terms of Resolution No. 1,193 of the SE, PESA and other MEM creditors formally
announced their decision to manage the construction, operation and maintenance of two power plants of at least 800 MW each, the Termoeléctrica Manuel Belgrano and Termoeléctrica José de San Martín plants. Combined
construction costs of the plants was approximately U.S.$1.3 billion and was funded with contributions to FONINVEMEM I and II, with an additional charge imposed on consumers, and with contributions from the Argentine government.

The gas turbines of the Termoeléctrica Manuel Belgrano and Termoeléctrica José de San Martín power plants were
operating in open cycle mode as of December 31, 2009 and in combined cycle as from the first quarter of 2010.



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By December 31, 2009 the funds contributed by the Company to FONINVEMEM II had been fully
recovered through investment in additional electricity generation projects under Resolution No. 564/2007 issued by the SE, whereby the Company built Genelba Plus, a 165 MW thermoelectric plant close to the existing Genelba Power Plant.

PESA began recovering amounts contributed to the FONINVEMEM I in 120 monthly installments in March 2010, upon authorization of commercial
operations of both power plants in the combined cycle mode referred to above.

In 2008, as a consequence of the increasing deficit in the
Stabilization Fund, CAMMESAs debt with generation agents, including us, gradually increased. Therefore, generation companies only received payment from CAMMESA for variable production costs and for power and services such as the primary
frequency response system, but not for the margin (between the spot price and the variable production cost) on sales to the spot market. For the purpose of remedying this situation and securing generation supply, the SE issued Resolution
No. 724/08 aimed at improving the collection priority of generation companies. Under this resolution, generation companies were able to submit projects for the expansion of the lifespan and/or generation capacity of their units for the purpose
of ensuring priority in the collection of credit balances owed by CAMMESA.

During 2010, several resolutions were approved to improve the
operating margins of electricity generators. Under Notes No. 6,169 and No. 6,866 of the SE, CAMMESA was instructed to accept assignment beginning May 1, 2010 of gas and transportation agreements by electric power generators, to
centralize and optimize delivery of natural gas to the electricity generation sector. In exchange, a gross margin is accrued to electricity generators as if generation were performed with natural gas, regardless of the fuel used. SE Resolution
No. 7,548, applicable to energy sold pursuant to the Energy Plus Program, was subsequently published and pursues the same objective. As of the date of this Annual Report, the above mentioned resolutions have been renewed and remain in effect.

On November 25, 2010, an agreement was entered into between generators and the SE to start readjustment of the MEM and comply with
SE Resolution No. 1,427/04. Pursuant to this agreement, generators expected to start receiving a higher fee for monthly generation capacity availability, regardless of the actual dispatches to the SIN. In addition, higher operation and
maintenance costs were to be recognized according to fuel used for generation. Generators, in turn, undertook to continue with their maintenance investment plans and to make investments with the proceeds from sales which generated the credit with
CAMMESA described above. This agreement was terminated in 2012.

In November 2011, a new seasonal price was approved for the November 2011
to April 2012 period, reflecting values close to actual market costs. In subsequent resolutions, regulatory entities jointly started to reduce subsidies previously granted to certain industrial, commercial and residential sectors. These measures are
aimed principally at providing greater predictability to market agents and supporting an economic and financial readjustment of economic transactions in the MEM.

In March 2013, the SE issued Resolution No. 95/2013 involving changes in the compensation scheme for MEM generators, co-generators and
self-generators except for Plus generators, binational hydroelectric generators and nuclear generators, among others. The following changes are applicable to generators adhering to this new scheme:



| | 1. | changes in the compensation of generation companies according to their production scale and technology. Non-fuel fixed and variable costs and additional compensation are paid; payment of the latter two items is subject
to the generation of each power plant, with a portion of the additional compensation being applied to a trust to finance works in the electricity sector; and
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | temporary suspension of private agreements between generators and larger users in the MEM, in connection with both energy and fuels and related products, which are now managed by CAMMESA.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In May 2014, the SE issued Resolution No. 529/2014 adjusting the prices applicable under Resolution No. 95/2013 and introducing the
following changes:



| | 1. | an incentive for thermal generation in the most critical months for demand, improving the compensation of generation companies with high availability; and
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | a new compensation item called Compensation for Non-Recurring Maintenance. Such compensation is accrued by, and only paid to, the generation companies that perform maintenance works on current equipment to
support or increase availability.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Resolution No. 95/2013, as amended by Resolution No. 529/2014, provided for regulatory
changes in the MEMs method of compensation of generation companies according to their production scale and technology affecting the Genelba Combined Cycle and Pichi Picún Leufú Hidroelectric Complex operations.

In July 2015, and with retroactive effect as from February 2015, Resolution No. 482/2015 issued by the SE set forth an adjustment in the
compensation established under Resolution No. 529/2014 and incorporated of the following compensation items, based on production level and technology:



| | 1. | Resources for FONINVEMEN 2015-2018 investments, to be allocated to generators participating in investment projects approved by the SE.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Incentives for electric power production and operational efficiency.
| | -- | --------------------------------------------------------------------

In December 2015,
through Decree No. 134/2015, the Argentine government declared a state of emergency with respect to the national electricity system that will remain in effect until December 31, 2017. The state of emergency allows the Argentine government
to take actions designed to guarantee the supply of electricity in Argentina such as instructing the Ministry of Energy and Mining to elaborate and implement, with the cooperation of all federal public entities, a coordinated program to guarantee
the quality and security of the electricity system and rationalize public entities consumption of energy.

In March 2016, Resolution
No. 22/2016 of the Ministry of Energy and Mining set forth an update in the compensation established for electricity generators with retroactive effect as from February 2016.

(e) Regulation of Utilities

The
Public Emergency Law pesified tariffs for public utility services at a Ps.1.00 = U.S.$1.00 parity and prohibited the increase of these tariffs based on indexation factors. In addition, the Argentine government was authorized to renegotiate the terms
of contracts relating to the provision of public utility services, taking into account the following criteria: (i) the impact of tariffs on economic competitiveness and on income distribution; (ii) the quality of services to be provided
and/or the capital expenditure programs provided for in the contracts; (iii) the interest of customers and accessibility to services; (iv) the safety of the system; and (v) the companies profitability.

In July 2003, UNIREN was created under the joint jurisdiction of the Ministry of Economy and the Ministry of Federal Planning. UNIRENs
mission is, among other purposes, to provide assistance in the renegotiation of contracts with utilities, execute comprehensive or partial agreements with utility companies and submit regulatory projects related to transitional price and rate
adjustments. Pursuant to Law No. 27,200, enacted in December 2015, the term to renegotiate contracts for public works and utility services was extended through December 31, 2017.

On April 7, 2014, the ENARGAS passed Resolution No. 2,852/14 defining the new tariff schedules that include an increase in the rate
applicable to natural gas transportation rates. The increase in the rate is staggered as follows: 8% from April 1, 2014, 5.5% from June 1, 2014 and 5.3% from August 1, 2014, or a cumulative increase of 20%.

On June 5, 2015, the ENARGAS issued Resolution No. 3,347, complementary to the Resolution No. 2,852/14, defining an increase in
the tariff schedules applicable to natural gas transportation as from May 1, 2015, which represented a temporary increase of 44.3% in the price of natural gas transportation and 73.2% in the CAU.

On February 16, 2016, through Decree No. 367/2016, dissolved the UNIREN and transferred the responsibility of renegotiating public
service agreements to the ministries with jurisdiction over the relevant activity. The Ministry of Energy and Mining and the Ministry of Economy and Public Finance assumed UNIRENs duties regarding TGSs renegotiation process.

Additionally, the new administration, Decree No. 367/2016 empowered such ministries jointly with the Ministry of Economy and Public
Finance to conclude partial renegotiation agreements and temporary price and tariff adjustments that are necessary to ensure the continuity of the normal provision of the corresponding public services, until the completion of the comprehensive
renegotiation process, which shall be effected as an advance of future increases pursuant to the comprehensive tariff review.

These
transitional adjustments were made in advance of future increases allowed pursuant to the comprehensive renegotiation process. Pursuant to Resolution No. 31/16 of the Ministry of Energy and Mining, TGS and the ENARGAS are expected to conclude
the renegotiation process within twelve months following the issuance of Resolution No. 3,724/16.

On March 31, 2016, the
ENARGAS issued Resolution No. 3,724, which approved the tariff schedule applicable as from April 1, 2016, including the CAU for the Natural Gas Transportation business segment, which represented a 200.1% increase. This increase is
associated with the implementation of a Mandatory Investment Plan to be fulfilled by TGS between April 2016 and March 2017, involving future capital expenditures of Ps.794.3 million to be overseen by the ENARGAS. Futhermore, TGS shall submit
evidence of compliance with such Mandatory Investment Plan to obtain ENARGASs prior authorization to distribute dividends.



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These increases represent a partial recognition of TGS prior administrative claims, and as
such, TGS will continue with all legal actions initiated until it obtains full enforcement of its rights, including those necessary to accomplish the execution of the Comprehensive Agreement. See Item 4. Information on the CompanyGas and
EnergyGas TransportationTGSTariff Renegotiation Process.

(f) CIESAs Debt Restructuring

On July 13, 2012, CIESA, Grupo Pampa and PESA entered into a settlement agreement whereby all parties involved waived all claims, title
and interest under the lawsuit before the New York State courts and terminated the same. As a result of the agreement, CIESA paid off all of its financial debt by means of (i) the transfer to Grupo Pampa of 4.3% of TGSs shares;
(ii) a cash payment of approximately U.S.$130 million; (iii) the release of the remaining financial debt; and (iv) execution on July 13, 2012 of a fifth amendment to the CIESA Restructuring Agreement whereby, upon obtaining
governmental approval, Grupo Pampa will receive shares representing 40% of CIESAs capital stock which are currently held in trust by The Royal Bank of Scotland N.V. Sucursal, Argentina.

As a result of full payment of CIESAs financial debt, in the third quarter of 2012 we recorded a net gain of Ps.291 million
attributable to our equity interest in CIESA, of which Ps.221 million and Ps.165 million were shown under Other Operating Income and Share of Net Loss of Equity Accounted Investments, respectively, with a
Ps.95 million charge recorded in the Income Tax line item.

Pursuant to the settlemene agreement, CIESA notified the CNV
of the formal cancellation of its corporate bonds. On May 30, 2013, the CNV approved CIESAs withdrawal from public offering and listing through Resolution No. 17,904. See Gas TransportationTGSOur Interest in
TGS and Corporate Developments.

(3) Migration of Operating Agreements in Venezuela

In April 2005, the Venezuelan Energy and Oil Ministry instructed the Venezuelan national oil company, PDVSA, to review all operating agreements
signed with other oil companies between 1992 and 1997. The Ministry further instructed PDVSA to take all necessary action to convert those operating agreements into mixed companies whereby the Venezuelan government, through PDVSA, would be entitled
to majority ownership.

In March 2006, through our related companies in Venezuela, we signed a memorandum of understanding with PDVSA and
the CVP in order to effect the migration of our four pre-existing operating agreements. As a result, all of our operating service agreements were converted into mixed companies in which the Venezuelan government, through the CVP, holds at least 60%
of the share capital and private companies hold the remaining.

The operating conditions derived from the migration of pre-existing
operating agreements had an adverse impact on the recoverable value of our assets in Venezuela. The recoverability of these investments is highly sensitive to crude oil price volatility, to economic, social and regulatory changes in Venezuela and,
particulary to the business plans of mixed companies to reserves development. (see Note 17.2 to the Audited Consolidated Financial Statements).

See Item 4. Information on the CompanyOil and Gas Exploration and ProductionProductionProduction Outside
ArgentinaVenezuela and Item 3. Key InformationRisk FactorsFactors Relating to Our BusinessOur activities may be adversely affected by events in countries in which we do business.

(4) Commodities Prices

Our results of
operations and cash flows are exposed to risks related to the volatility of international prices, mainly crude oil and oil-related product prices.

International prices for crude oil have fluctuated significantly since July 2014. Changes in crude oil prices usually entail changes in the
price for oil-related products.

In 2015, the annual average price of Brent crude oil was U.S.$52.3 per barrel. A further decrease in
prices left the average price at U.S.$37.7 per barrel in December 2015. On April 15, 2016, price of Brent crude oil stood at U.S.$43.09 per barrel.

See Item 3. Key InformationRisk FactorsFactors Relating to Our BusinessSubstantial or extended declines and volatility
in the prices of crude oil, oil products and natural gas may have an adverse effect on our results of operations and financial condition and Limitation on local pricing in Argentina may adversely affect our result of operations.



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(5) Oil and Gas Production in Argentina

Oil and gas reserves in Argentina have followed a downward trend in recent years. According to official data from the SE, proved oil and gas
reserves dropped by 9% in the 2009-2014 period. In 2015, oil production averaged 532 thousand barrels per day, remaining stable with respect to 2014. Gas production increased by 3.6% in the same period to an average of 117.8 million cubic
meters per day.

Our oil and gas reserves in Argentina declined by 12% in 2015. Our oil equivalent production dropped by 14% in 2015,
mainly due to the sale of our interest in the Santa Cruz I, Santa Cruz I Oeste and Santa Cruz II areas, all of them located in the Austral basin, and to a lesser extent, the natural decline of mature fields in Argentina.

The Companys business plan provides for exploration investments in Argentina.

Due to risks inherent in exploration activities, our management cannot assure you that this downward trend in our Argentine reserves will be
reversed.

(6) Operations in Ecuador

As from 2006, the Ecuadorian government introduced sweeping tax and regulatory reforms in the hydrocarbon sector which resulted in significant
changes to the terms and conditions set forth at the time of execution of the participation agreements.

See Item 4. Information on
the CompanyOil and Gas Exploration and ProductionProductionProduction Outside ArgentinaEcuador and Item 3. Key InformationRisk FactorsFactors Relating to Our BusinessOur activities may be
adversely affected by events in countries in which we do business.

(7) Changes in Our Oil and Gas Exploration and Production Portfolio

On December 2011, the Company relinquished 100% of the CAA-40 block and also relinquished its interests in the CAA-46 block, in the offshore
Malvinas basin.

On May 31, 2012, we purchased a 39.671% interest in PELSA from our controlling company, PPSL, for a price of
U.S.$249.4 million. As from such date, PESA has exercised control over PELSA with a 58.88% total equity interest. See Item 7. Major Shareholders and Related Party TransactionsRelated Party TransactionsAcquisition of
Companies.

In 2013, the Province of Chubut approved a ten-year extension of the concession agreement for the El Tordillo and La
Tapera-Puesto Quiroga areas.

On January 31, 2014, our Board of Directors approved the sale to YPF of our entire interest in the
Puesto Hernández Joint Operation (UTE) agreement, for a total price of U.S.$40.7 million. This transaction represented for us an early termination of the agreement entered into with YPF in 1991 to operate Puesto Hernández, which is an
area covering 147 km2and located in the Provinces of Neuquén and Mendoza.

On
December 30, 2014, the legislature of the Province of Rio Negro ratified the agreement entered into with the government of the Province of Rio Negro to extend for an additional 10-year term our concessions in 25 de Mayo-Medanito S.E.,
Jagüel de los Machos and Río Neuquén production fields. We operate those three areas and hold a 100% stake in the 25 de Mayo-Medanito S.E. and Jagüel de los Machos production fields. As part of our agreement to extend our
concessions, we agreed to transfer 5% of the rights and obligations arising from our concession in Río Neuquén field to Empresa de Desarrollo Hidrocarburífero Provincial S.A. (EDHIPSA). As of the date of this Annual Report the
transfer is still to be implemented.

On December 30, 2014, the legislature of the Province of Rio Negro also ratified its agreement
with PELSA (as operator of the relevant area), to extend our concession in the Entre Lomas field for an additional 10 years.

On
March 4, 2015, the Secretary of Energy of the Province of Salta granted us, through Resolution 07/2015, an extension of the second exploration period in the Chirete concession area for a period of two years. On March 19, 2015, our Board of
Directors approved the transfer of a 50% stake in the Chirete area to the High Luck Group which was approved by the authorities of the Province of Salta through Decree No. 3129 on September 10, 2015. On November 19, 2015, the
Secretary of Energy of the Province of Salta granted us an additional one-year extension of the second exploration period, which expires in November 2016.

On March 30, 2015, our Board of Directors approved the sale to CGC of our entire interest in the Austral Basin in Argentina, which
includes our interest in the UTEs in Santa Cruz I, Santa Cruz I Oeste, Glencross and Estancia Chiripá, our assets associated with Santa Cruz II, Punta Loyola Pier and oil and gas pipelines operated in the basin, for a total price of U.S.$101
million and recongnized income before income tax of Ps. 675 million. The relevant concessions cover an area of 11,500 km2 and are located in the Province of Santa Cruz. Prior to transferring our
interest in the concessions, our share of the Austral Basins daily combined oil and gas production was approximately 15,000 barrels of oil equivalent per day.



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In August 2015, the Province of Río Negro granted PELSA with the Exploitation Concession
for Lote Jarilla Quemada, which was part of Agua Amarga exploration area.

On September 7, 2015, the Province of La Pampa took
possession of the portion of the Jagüel de los Machos area located within the territory of La Pampa following the expiration of our concession over the area. Although an agreement had been reached between the government of the Province of La
Pampa and us prior to the expiration of the concession, in order to be binding, the agreement required approval by the provincial legislature which was not obtained.

In October and November 2015, in accordance with Section 5.2 of the association agreements relating to the Enarsa 1 and Enarsa 3
exploration areas in effect since April 2006 and November 2006, respectively, we informed our partners in those areas of our decision not to participate in the conversion of such agreements into exploration permits. In November 2015 and March 2016
we also informed such decision to the SE and the Ministry of Energy and Mining, respectively.

On July 24, 2015, the Province of
Neuquén approved the sale of 50% of our share in Parva Negra Este to ExxonMobil Exploration Argentina S.R.L.

(8) Divestment of Distrilec

On January 30, 2013, we sold our 48.5% indirect interest in Distrilec, Edesurs parent company, for U.S.$35 million and
recorded a loss of Ps.34 million on that investment (see Note 17.1.1 to the Audited Consolidated Financial Statement).



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DISCUSSION OF RESULTS

The table below presents our selected consolidated financial data for the fiscal years indicated.



|                                                  |  |                                 |         |   |      |  |         |      |  |  |         |  
|------------------------------------------------- |  | ------------------------------- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | -
|                                                  |  | For the year Ended December 31, |        
|                                                  |  | 2015                            |         |   | 2014 |  |         | 2013 | 
|                                                  |  | (in millions of pesos)          |        
|IFRS Summary Financial Data:                      |  |                                 |         |   |      |  |         |      |  |  |         |  
|Sales                                             |  |                                 | 21,955  |   |      |  | 20,738  |      |  |  | 15,340  |  
|Cost of sales                                     |  |                                 | (15,554 | ) |      |  | (14,490 | )    |  |  | (11,260 | )
|                                                  |  |                                 |         |   |      |  |         |      |  |  |         |  
|Gross profit                                      |  |                                 | 6,401   |   |      |  | 6,248   |      |  |  | 4,080   |  
|Administrative and selling expenses               |  |                                 | (2,921  | ) |      |  | (2,416  | )    |  |  | (1,797  | )
|Exploration expenses                              |  |                                 | (148    | ) |      |  | (70     | )    |  |  | (82     | )
|Other operating expenses, net                     |  |                                 | (123    | ) |      |  | (779    | )    |  |  | (571    | )
|Share of net loss of equity accounted investments |  |                                 | (1,290  | ) |      |  | (1,735  | )    |  |  | (279    | )
|                                                  |  |                                 |         |   |      |  |         |      |  |  |         |  
|Operating income                                  |  |                                 | 1,919   |   |      |  | 1,248   |      |  |  | 1,351   |  
|Financial results                                 |  |                                 | (53     | ) |      |  | 72      |      |  |  | 53      |  
|                                                  |  |                                 |         |   |      |  |         |      |  |  |         |  
|Income before income tax                          |  |                                 | 1,866   |   |      |  | 1,320   |      |  |  | 1,404   |  
|Income tax                                        |  |                                 | (971    | ) |      |  | (742    | )    |  |  | (552    | )
|                                                  |  |                                 |         |   |      |  |         |      |  |  |         |  
|Net income                                        |  |                                 | 895     |   |      |  | 578     |      |  |  | 852     |  
|                                                  |  |                                 |         |   |      |  |         |      |  |  |         |  
|Net income attributable to:                       |  |                                 |         |   |      |  |         |      |  |  |         |  
|Shareholders of the Company                       |  |                                 | 853     |   |      |  | 458     |      |  |  | 779     |  
|Non-controlling interest                          |  |                                 | 42      |   |      |  | 120     |      |  |  | 73      |  
|                                                  |  |                                 |         |   |      |  |         |      |  |  |         |  
|Total                                             |  |                                 | 895     |   |      |  | 578     |      |  |  | 852     |  
|                                                  |  |                                 |         |   |      |  |         |      |  |  |         |  

The following tables set out sales, gross profit (loss) and operating income for each of our business segments
for the years ended December 31, 2015, 2014 and 2013. Sales eliminations relate to intersegment sales. Gross profit eliminations relate to adjustments to intersegment sales and costs associated with such sales. Intersegment transactions are
made at market prices.

The business segment year-to-year comparisons that follow include intersegment sales.



|                                       |  |                                 |        |   |      |  |        |      |  |  |        |  
|-------------------------------------- |  | ------------------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                       |  | For the year ended December 31, |       
|                                       |  | 2015                            |        |   | 2014 |  |        | 2013 | 
|                                       |  | (in millions of pesos)          |       
|Sales (1)                              |  |                                 |        |   |      |  |        |      |  |  |        |  
|Oil and Gas Exploration and Production |  |                                 | 10,449 |   |      |  | 10,553 |      |  |  | 7,838  |  
|Refining and Distribution              |  |                                 | 12,093 |   |      |  | 11,476 |      |  |  | 8,146  |  
|Petrochemicals                         |  |                                 | 4,509  |   |      |  | 4,436  |      |  |  | 3,348  |  
|Gas and Energy (2)                     |  |                                 | 4,625  |   |      |  | 3,487  |      |  |  | 2,704  |  
|Eliminations                           |  |                                 | (9,721 | ) |      |  | (9,214 | )    |  |  | (6,696 | )
|                                       |  |                                 |        |   |      |  |        |      |  |  |        |  
|Total                                  |  |                                 | 21,955 |   |      |  | 20,738 |      |  |  | 15,340 |  
|                                       |  |                                 |        |   |      |  |        |      |  |  |        |  
|Gross Profit (loss) (3)                |  |                                 |        |   |      |  |        |      |  |  |        |  
|Oil and Gas Exploration and Production |  |                                 | 3,330  |   |      |  | 3,534  |      |  |  | 2,337  |  
|Refining and Distribution              |  |                                 | 1,305  |   |      |  | 1,308  |      |  |  | 794    |  
|Petrochemicals                         |  |                                 | 681    |   |      |  | 810    |      |  |  | 521    |  
|Gas and Energy (2)                     |  |                                 | 918    |   |      |  | 691    |      |  |  | 486    |  
|Eliminations                           |  |                                 | 167    |   |      |  | (95    | )    |  |  | (58    | )
|                                       |  |                                 |        |   |      |  |        |      |  |  |        |  
|Total                                  |  |                                 | 6,401  |   |      |  | 6,248  |      |  |  | 4,080  |  
|                                       |  |                                 |        |   |      |  |        |      |  |  |        |  



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|                                       |  |                                 |        |   |      |  |       |      |  |  |       |  
|-------------------------------------- |  | ------------------------------- | ------ | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                       |  | For the year ended December 31, |       
|                                       |  | 2015                            |        |   | 2014 |  |       | 2013 | 
|                                       |  | (in millions of pesos)          |       
|Operating Income                       |  |                                 |        |   |      |  |       |      |  |  |       |  
|Oil and Gas Exploration and Production |  |                                 | 1,592  |   |      |  | 735   |      |  |  | 1,342 |  
|Refining and Distribution              |  |                                 | 40     |   |      |  | 412   |      |  |  | 216   |  
|Petrochemicals                         |  |                                 | 390    |   |      |  | 505   |      |  |  | 306   |  
|Gas and Energy (2)                     |  |                                 | 752    |   |      |  | 557   |      |  |  | 398   |  
|Corporate                              |  |                                 | (1,016 | ) |      |  | (841  | )    |  |  | (846  | )
|Eliminations                           |  |                                 | 161    |   |      |  | (120  | )    |  |  | (65   | )
|                                       |  |                                 |        |   |      |  |       |      |  |  |       |  
|Total                                  |  |                                 | 1,919  |   |      |  | 1,248 |      |  |  | 1,351 |  
|                                       |  |                                 |        |   |      |  |       |      |  |  |       |  



|(1) | Royalties with respect to the oil and gas business in Argentina are accounted for as a cost of production and are not deducted in determining sales.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | This segment includes Electricity and Gas Transportation.
|--- | ---------------------------------------------------------

|(3) | Sales less cost of sales.
|--- | -------------------------



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YEAR ENDED DECEMBER 31, 2015 COMPARED TO YEAR ENDED
DECEMBER 31, 2014

Net income attributable to shareholders of the Company: Net income attributable to our
shareholders increased by Ps.395 million or 86.2%, to Ps.853 million in 2015 from Ps.458 million in 2014. This increase was primarily the result of a decrease in losses resulting from other operating expenses and our share of net loss of equity
accounted investments, partially offset by an increase in administrative and selling expenses.

Sales: Sales increased by
Ps.1.2 billion, or 5.9%, to Ps.22.0 billion in 2015 from Ps.20.7 billion in 2014. This increase was mainly attributable to sales increases of Ps.1.1 billion, Ps.617 million and Ps.73 million in the Gas and Energy, Refining and Distribution and
Petrochemicals business segments, respectively, partially offset by sales decrease of Ps.104 million in the Oil and Gas Exploration and Production business segment. Inter segment sales totaled Ps.9.7 billion in 2015 and Ps.9.2 billion in 2014. Most
of these inter segment sales were attributable to the Oil and Gas Exploration and Production, Refining and Distribution and Gas and Energy business segments.

Gross profit: Gross profit for 2015 increased by Ps.153 million, or 2.4%, to Ps.6.4 billion in 2015 from Ps.6.2 billion in 2014.
This increase is mainly attributable to an increase in gross profit of Ps.227 million in the Gas and Energy business segment, partially offset by declines of Ps.204 million and Ps.129 million in the gross profit of our Oil and Gas Exploration and
Production and Petrochemicals business segments, respectively. Results from inter segment sales improved during 2015 mainly due to changes in the Refinerys crude oil production levels.

Administrative and selling expenses: Administrative and selling expenses increased by Ps.505 million, or 20.9%, to Ps.2.9
billion from Ps.2.4 billion in 2014, mainly as a consequence of administrative and selling expenses increases of Ps.278 million, Ps.208 million and Ps.51 million in the Refining and Distribution, Oil and Gas Exploration and Production and Corporate
Center segments, respectively.

Exploration expenses:Exploration expenses totaled Ps.148 million in 2015 and Ps.70 million
in 2014, representing an increase of Ps.78 million, or 111.4%. This increase is attributable to an increase in expenses incurred in connection with unsuccessful wells. See Analysis of Operating Income by Business SegmentOil and Gas
Exploration and Production.

Other operating expenses, net: Other operating expenses, net decreased by Ps.656 million,
or 84.2%, and totaled Ps.123 million and Ps.779 million in 2015 and 2014, respectively. This variation is mainly attributable to the Oil and Gas Exploration and Production segment which accounted for Ps.570 million of the decrease. See
Analysis of Operating Income by Business SegmentOil and Gas Exploration and Production.

Share of net loss
of equity accounted investments: Our share of net loss of equity accounted investments decreased by Ps.445 million to Ps.1.3 billion in 2015 from Ps.1.7 billion in 2014, mainly attributable to a decrease in losses of Ps.620 million in the
Oil and Gas Exploration and Production business segment, partially offset by increased losses of Ps.133 million and Ps.42 million in the Refining and Distribution and Gas and Energy business segments, respectively.

Operating income:Operating income increased by Ps.671 million, or 54%, to Ps.1.9 billion in 2015 from Ps.1.2 billion in 2014.
This increase is mainly attributable to increases of Ps.857 million and Ps.195 million in the operating income of our Oil and Gas Exploration and Production and Gas and Energy business segments, respectively, which were partially offset by a
decrease of Ps.372 million and Ps.115 million in the operating income of our Refining and Distribution and Petrochemicals business segments, respectively. See Analysis of Operating Income by Business SegmentOil and Gas Exploration
and Production.

Financial results: We recorded a financial loss of Ps.53 million in 2015 compared to a financial gain
of Ps.72 million in 2014. This loss was mainly the result of an increase in the net interest cost of employement benefit obligations, and a decrease in exchange gains, partially offset by net interest gains as a result of higher interest rate on
financial investments in 2015.

Income tax: Income tax charges for 2015 and 2014 totaled Ps.971 million and Ps.742 million,
respectively, mainly as a result of improved results for 2015. The 31% increase was attributable to a higher deferred tax loss as a consequence of the effects of the greater devaluation of the peso for exchange differences, compared to 2014 in which
such increase was attributable to investment impairment in OCP, which was non-deductible for tax purposes.



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PESAs business is mainly focused on the energy sector, through activities relating to oil
and gas exploration and production, refining and distribution, petrochemicals and gas and energy. Expenses not attributable to any other operating segment are shown under Corporate and include among other, management fees, taxes on financial
transactions, financial liability interests and income taxes, which are incurred by us in the ordinary course of operations.

ANALYSIS OF OPERATING INCOME BY BUSINESS SEGMENT

Oil and Gas Exploration and Production

Operating income: Operating income for the Oil and Gas Exploration and Production business segment increased by Ps.857 million,
or 117%, to Ps.1.6 billion in 2015 from Ps.735 million in 2014, mainly as a result of a decrease in our share of net loss of equity accounted investments and an increase of Ps.570 million in other operating income.

Sales: Sales for this business segment decreased by Ps.104 million, or 1.0%, to Ps.10.5 billion from Ps.10.6 billion in 2014.

Argentina

Sales
attributable to operations in Argentina decreased by Ps.30 million in 2015, or 0.3%, to Ps.10.3 billion from Ps.10.4 billion in 2014, primarily as a result of the decline in oil and gas sales volumes, which averaged 67.4 thousand barrels of oil
equivalent per day in 2015 compared to 77.7 thousand barrels of oil equivalent per day in 2014, partially offset by an increase in average gas sales prices. Lower oil and gas volumes were primarily attributable to the sale of assets in the
Austral basin in the first quarter of 2015, with a daily combined oil and gas production of approximately 15,000 barrels of oil equivalent per day, and to a lesser extent, natural decline of mature fields, partially offset by the start of production
of new gas and oil wells in the Neuquén basin.

Crude oil sales decreased by Ps.890 million, or 10.8%, to Ps.7.4 billion in 2015
from Ps.8.3 billion in 2014, mainly due to a 15.1% drop in sales volumes, partially offset by a 5% rise in the average sales price to Ps.647 per barrel from Ps.616 per barrel. Sales volumes totaled 31.2 thousand barrels in 2015 compared to
36.7 thousand barrels in 2014.

Gas sales increased by Ps.884 million, or 43.7%, to Ps.2.9 billion from Ps.2.0 billion, mainly due to
a 63.1% increase in average sales prices to Ps.36.7 per thousand cubic feet in 2015 from Ps.22.5 per thousand cubic feet in 2014 as a result of the implementation of Gas Program II and, to a lesser extent, to the higher proportion of gas sold under
such program. Daily gas sales volumes, however, totaled 216.9 thousand cubic feet and 246.1 thousand cubic feet, in 2015 and 2014, respectively.

Outside of Argentina

Total sales for operations outside of Argentina decreased by Ps.74 million, or 38.5%, to Ps.118 million from Ps.192 million, mainly
attributable to operations in Bolivia.

Gross profit: Gross profit for this business segment decreased by Ps.204 million, or
5.8%, to Ps.3.3 billion in 2015 from Ps.3.5 billion. Our margin on sales was 31.9% and 33.5% in 2015 and 2014, respectively, mainly derived from operations in Argentina.

In 2015, gross profit attributable to operations in Argentina decreased by Ps.174 million, or 5%, to Ps.3.3 billion in 2015 from Ps.3.4
billion in 2014, and margins on sales decreased to 31.7% in 2015 from 33.3% in 2014, primarily due to a decline in sales volumes and increased production costs, partially offset by increases in sales prices.

Gross profit for operations outside of Argentina decreased by Ps.30 million, or 37.5%, to Ps.50 million from Ps.80 million, with a gross
margin on sales of 42.4% and 41.7%, each in 2015 and 2014, respectively.

Administrative and selling expenses:
Administrative and selling expenses increased by Ps.51 million, or 9.8%, to Ps.571 million in 2015 from Ps.520 million in 2014. This increase is attributable to higher expenses due to increased prices, primarily in wages, in 2015.

Exploration expenses: Exploration expenses increased by Ps.78 million, or 111.4%, to Ps.148 million in 2015 from Ps.70 million
in 2014, as a result of operations in Argentina. Expenses for unsuccessful wells totaled Ps.83 million in 2015 and Ps.11 million in 2014. Geological and geophysical expenses in 2015 remained stable compared to 2014.



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Other operating income (expenses), net: Other operating income, net totalled Ps.191
million in 2015 compared to a loss of Ps.379 million in 2014. The gain recorded in 2015 was primarily attributable to the sale of assets in the Austral basin and reassessment of ship or pay liabilities in Ecuador, accounting for profits of Ps.675
million and Ps.507 million, respectively. These were partially offset by impairment charges related to fields in Argentina and Bolivia and to the expiration of the Jagüel de los Machos concession, accounting for losses of Ps.635 million and
Ps.121 million, respectively. The loss recorded in 2014 is mainly attributable to charges for environmental remediation (due to extension of concessions in Río Negro), idle capacity, contingencies and impairment charges on fields in Bolivia,
accounting for losses of Ps.166 million, Ps.150 million, Ps.95 million and Ps.94 million, respectively, which were partially offset by gains of Ps.181 million derived from the sale of our interest in the Puesto Hernández Joint Venture (UTE).

Share of net loss of equity accounted investments: Our share of net loss of equity accounted investments was Ps.1.2 billion
in 2015 compared to Ps.1.8 billion in 2014, mainly attributable to lower impairment charges of our investment in OCP.

Refining and Distribution

Operating income: Operating income for this business segment decreased by Ps.372 million, or 90%, to Ps.40 million in
2015 from Ps.412 million in 2014, mainly as a result of an increase in administrative and selling expenses and our share of net loss in Refinor.

Sales: Sales for this business segment increased by Ps.617 million, or 5.4%, to Ps.12.0 billion in 2015 from Ps.11.5 billion in
2014, mainly as a result of increased refined product sales of Ps.1.0 billion, partially offset by a Ps.438 million decrease in crude oil sales.

In 2015, the Refinery processed an average of 28,704 oil barrels per day, accounting for 94.1% of its installed capacity, with processed
volumes being 6% higher compared to 2014, mainly due to scheduled shutdowns for maintenance works performed in 2014, which resulted in reduced availability of refined products and increased crude oil sales to third parties in 2014.

As a result, total sales volumes of refined products increased by 154 thousand cubic meters, or 8.3%, to 2,011 thousand cubic meters
in 2015 from 1,857 thousand cubic meters in 2014.

In 2015, sales volumes of diesel oil, gasoline, fuel oil and IFOs and other oil
related products totaled 865 thousand cubic meters, 564 thousand cubic meters, 399 thousand cubic meters and 183 thousand cubic meters, respectively. In 2014, sales volumes of diesel oil, gasoline, fuel oil and IFOs and other oil
related products totaled 784 thousand cubic meters, 491 thousand cubic meters, 394 thousand cubic meters and 188 thousand cubic meters, respectively.

The decrease in crude oil sales was mainly a result of reduced sales volumes and a decline in average sales prices. Sales volumes of crude oil
totaled 124 thousand cubic meters and 220 thousand cubic meters in 2015 and 2014, respectively.

Gross profit:
Gross profit for this business segment stood at Ps.1.3 billion in 2015 and 2014, with margin on sales reaching 10.8% in 2015 and 11.4% in 2014.

Administrative and selling expenses: Administrative and selling expenses increased by Ps.278 million, or 28.8%, to Ps.1.2
billion in 2015 from Ps.964 million in 2014, mainly as a consequence of higher selling expenses, basically maintenance expenses related to our own network, inland and ocean freight costs, taxes and labor costs.

Other operating income (expenses), net: Other operating income, net totalled Ps.13 million in 2015 compared to other operating
expenses of Ps.29 million in 2014.

Share of net loss of equity accounted investments: Our share of net loss of equity
accounted investments in this business segment is attributable to our equity interest in Refinor, which accounted for a loss of Ps.36 million in 2015, compared to a gain of Ps.97 million in 2014, mainly due to a decrease of 38% in processed volumes
of imported crude oil from Bolivia, a drop in rich gas production from Bolivia, and the impact that the fall in international market prices had on LPG and virgin naphtha export prices.

Petrochemicals

Operating
income: Operating income for this business segment decreased by Ps.115 million, or 22.7%, to Ps.390 million from Ps.505 million in 2014, primarily as a result of a decrease in our sales margins.



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Sales: Sales for this business segment increased by Ps.73 million, or 1.6%, to
Ps.4.5 billion in 2015 from Ps.4.4 billion in 2014, primarily as a consequence of an increase in revenues from the catalytic reformer plant operations, partially offset by a 7% decline in styrenic.

Styrenic products sales decreased by Ps.190 million to Ps.2.7 billion from Ps.2.9 billion in 2014, mainly as a consequence of a 7.3% decrease
in average sales prices reflecting developments in the international market, partially offset by a slight increase in sales volumes to 170.4 thousand tons in 2015 from 169 thousand tons in 2014.

In 2015, average sales prices in pesos in the styrene, polystyrene and synthetic rubber lines decreased approximately 14.4%, 0.8% and 10.5%,
compared to 2014, respectively.

Performance of the main styrenic products in 2015 was as follows:

Styrene sales volumes decreased by 2.6% to 69.1 thousand tons in 2015, mainly due to a decline in exports directed to Chile and Brazil.

Polystyrene and Bops (bi-oriented polystyrene) sales volumes increased by 13.8% to 66.5 thousand tons in 2015 from
58.4 thousand tons in 2014, mainly due to an increase in domestic sales.

Synthetic rubber sales volumes totaled 34.8 thousand
tons, a decrease of 12.1% compared to 2014, mainly due to a 38% decline in exports to Chile and Brazil.

Revenues from the catalytic
reformer plant operations rose by Ps.263 million, or 17%, to Ps.1.8 billion from Ps.1.5 billion in 2014, mainly as a consequence of a 9.8% improvement in average sales prices and a 6.6% rise in sales volumes to 353.1 thousand tons in 2015 from
331.3 thousand tons in 2014. This increase was mainly attributable to increased exports of intermediate gasoline and higher volumes of aromatic varieties sold in the domestic market.

Gross profit: Gross profit for this business segment decreased by Ps.129 million, or 15.9%, to Ps.681 million from Ps.810
million in 2014, with a drop in margin on sales from 18.3% in 2014 to 15.1% in 2015 mainly attributable to the decline in marketing margins as a result of the drop in international prices.

Administrative and selling expenses: Administrative and selling expenses increased by Ps.5 million, totaling Ps.221 million and
Ps.216 million in 2015 and 2014.

Other operating expenses, net: Other operating expenses, net totalled Ps.70 million in
2015 compared to Ps.89 million in 2014.

Gas and Energy

Operating income: Operating income for this business segment increased by Ps.195 million, or 35%, to Ps.752 million in 2015 from
Ps.557 million in 2014.

Gross profit: Gross profit for this business segment rose by Ps.227 million, or 32.9%, to Ps.918
million in 2015 from Ps.691 million in 2014, mainly due to increased electricity generation operations.

Administrative and selling
expenses: Administrative and selling expenses decreased by Ps.37 million, or 24.3%, to Ps.115 million in 2015 from Ps.152 million in 2014, mainly due to recoveries of previously unpaid trade receivables from hydrocarbon marketing and
transportation transactions in 2015.

Other operating income (expenses), net: We recorded operating expenses, net of Ps.7
million in 2015 compared to other operating income, net of Ps.20 million in 2014.

Share of net loss of equity accounted
investments: Share of net loss of equity accounted investments accounted for a loss of Ps.44 million and Ps.2 million in 2015 and 2014, respectively, mainly attributable to our equity interest in CIESA, which was adversely affected by the
impact of the significant devaluation of the peso on CIESAs net borrowing position in foreign currency. See Analysis of Share of Net Loss of EquityAccounted Investments.



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Electricity Generation

Operating income:Operating income for this business segment increased by Ps.213 million, or 44.4%, to Ps.693 million in 2015
from Ps.480 million in 2014.

Sales: Sales for electricity generation increased by Ps.273 million, or 19.3%, to Ps.1.7
billion from Ps.1.4 billion in 2014, mainly due to an improvement in average sales prices, as a result of the implementation of Resolution No. 482/2015, and, to a lesser extent, increased sales volumes in 2015. In this respect, sales volumes
attributable to the Genelba, Pichi Picún Leufú, Genelba Plus and Ecoenergía power plants totaled 6,968 Gwh in 2015 compared to 6,638 Gwh in 2014. Higher sales volumes in 2015 were due to fewer scheduled shutdowns for major
maintenance works at the Genelba and Genelba Plus power plants and higher water supply at the Pichi Picún Leufú Hydroelectric Complex.

The availability factor and the reliability factor of Genelba, Genelba Plus, Pichi Picún Leufú and EcoEnergía power
plants reached 99%, 100%, 100% and 96% in 2015, respectively, similar to the levels recorded in 2014.

Gross profit: In
2015, gross profit for this business segment increased by Ps.186 million, or 35%, to Ps.717 million in 2015 from Ps.531 million in 2014 and margin on sales attributable to all power plants rose to 42.6% in 2015 from 37.6% in 2014. The improvement in
gross profit for this business segment in 2015 was mainly attributable to the above-mentioned improvement in sales prices and, to a lesser extent, to increased delivery by Pichi Picún Leufú and Genelba power plants.

Marketing and Transportation of Gas

Operating income: Operating income for this business segment increased by Ps.18 million, or 22.8%, to Ps.97 million in 2015 from
Ps.79 million in 2014.

Sales: Sales for this business segment increased by Ps.888 million, or 36.9%, to Ps.3.3 billion from
Ps.2.4 billion in 2014, mainly as a result of increased revenues from gas sales.

Revenues from gas sales rose by Ps.891 million, or 37%,
to Ps.3.3 billion in 2015 from Ps.2.4 billion in 2014, mainly due to a 51% increase in average sales prices. Sales volumes totaled 230.1 million cubic feet in 2015 compared to 253.7 million cubic feet in 2014. The improvement in average
sales prices was primarily attributable to the implementation of the Gas Program II in 2015 and, to a lesser extent, an improvement in rates for the residential and generation companies segments.

Gross profit: Gross profit totaled Ps.201 million in 2015 compared to Ps.160 million in 2014 and our margin on sales decreased
to 6.1% in 2015 from 6.6% in 2014.



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ANALYSIS OF SHARE OF NET LOSS OF EQUITY ACCOUNTED INVESTMENTS

The table below shows our share of profit (loss) of equity accounted investments for 2015 and 2014.



|                                                     |  |                                 |        |   |      |  |        |  
|---------------------------------------------------- |  | ------------------------------- | ------ | - | ---- |  | ------ | -
|                                                     |  | For the year ended December 31, |       
|                                                     |  | 2015                            |        |   | 2014 | 
|                                                     |  | (in millions of pesos)          |       
|CIESA (Gas and Energy)                               |  |                                 | (50    | ) |      |  | (6     | )
|Mixed companies in Venezuela (Oil and Gas E&P)       |  |                                 | (1,223 | ) |      |  | (1,385 | )
|Refinería del Norte S.A. (Refining and Distribution) |  |                                 | (36    | ) |      |  | 97     |  
|OCP (Oil and Gas E&P)                                |  |                                 |       |   |      |  | (464   | )
|Others                                               |  |                                 | 19     |   |      |  | 23     |  
|                                                     |  |                                 |        |   |      |  |        |  
|Total                                                |  |                                 | (1,290 | ) |      |  | (1,735 | )
|                                                     |  |                                 |        |   |      |  |        |  

Our share of net loss of equity accounted investments decreased by Ps.445 million to Ps.1.3 billion in 2015
from Ps.1.7 billion in 2014, mainly due to a decreased loss of Ps.626 million in the Oil and Gas Exploration and Production business segment, which was partially offset by an increased loss of Ps.133 million and Ps.44 million in the Refining and
Distribution and Gas and Energy business segments, respectively.

CIESA / TGS: Our share of net loss of equity in CIESA
increased by approximately Ps.44 million to Ps.50 million in 2015 from Ps.6 million in 2014, as a result of a significant devaluation of the peso against the U.S. dollar which adversely effected CIESAs net borrowing position in
foreign currency.

Mixed companies in Venezuela: Our share of net losses in mixed companies in Venezuela decreased by
approximately Ps.162 million to Ps.1.2 billion in 2015 from Ps.1.4 billion in 2014. This decrease is primarily the result of lower impairment charges of Ps.1.2 billion in 2015 compared to Ps.1.3 billion in 2014.

Refinería del Norte S.A.: Our share of net loss of equity in Refinor accounted for a loss of Ps.36 million in 2015
compared to a gain of Ps.97 million in 2014, mainly due to a decrease of 38% in processed volumes of imported crude oil from Bolivia, a drop in rich gas production from Bolivia, and that the impact the fall in international market prices had on
LPG and virgin naphtha export prices.

OCP: As of December 31, 2015 and 2014, OCP had negative shareholders
equity. PESA has not committed to make capital contributions or provide financial assistance to OCP; therefore, our equity interest in OCP was valued at zero and we recorded a net loss of Ps.464 million for 2014 after giving effect to the
capitalization during 2014 of a credit we held against OCP.



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YEAR ENDED DECEMBER 31, 2014 COMPARED TO YEAR ENDED
DECEMBER 31, 2013

Net income attributable to shareholders of the Company: Net income attributable to our
shareholders decreased by Ps.321 million, or 41%, to Ps.458 million in 2014 from Ps.779 million in 2013. This decrease was primarily the result of losses resulting from our share of net loss of equity accounted investments, partially offset by an
increase in gross profit.

Sales: Sales increased by Ps.5.4 billion, or 35.2%, to Ps.20.7 billion from Ps.15.3 billion in
2013. We recorded increases of Ps.2.7 billion, Ps.3.3 billion, Ps.1.1 billion and Ps.0.8 billion in sales in our Oil and Gas Exploration and Production, Refining and Distribution, Petrochemicals, and Gas and Energy business segments, respectively.
Inter-segment sales totaled Ps.9.2 billion in 2014 and Ps.6.7 billion in 2013. Most of these inter-segment sales were attributable to the Oil and Gas Exploration and Production, Refining and Distribution and Gas and Energy business segments.

Gross profit: Gross profit for 2014 increased by Ps.2.2 billion, or 53.1%, to Ps.6.2 billion from Ps.4.1 billion in 2013. We
recorded increases of Ps.1,197 million, Ps.514 million and Ps.289 million in the gross profit of our Oil and Gas Exploration and Production, Refining and Distribution and Petrochemicals business segments, respectively.

Administrative and selling expenses: Administrative and selling expenses increased by Ps.619 million, or 34.4%, to Ps.2.4
billion from Ps.1.8 billion in 2013. We recorded increases of Ps.236 million, Ps.170 million and Ps.61 million in the administrative and selling expenses of our Refining and Distribution, Oil and Gas Exploration and Production and Petrochemicals
business segments, respectively.

Exploration expenses:Exploration expenses totaled Ps.70 million in 2014 and Ps.82 million
in 2013, representing a decrease of Ps.12 million, or 14.6%. The decrease is attributable to the incurrence of lower expenses for unsuccessful wells. See Analysis of Operating Income by Business SegmentOil and Gas Exploration and
Production.

Other operating expenses, net: Other operating expenses, net increased by Ps.208 million, or 36.4%, and
totaled Ps.779 million and Ps.571 million in 2014 and 2013, respectively. Other operating expenses, net of the Oil and Gas Exploration and Production segment, accounted for Ps.152 million of the increase.

Share of net loss of equity accounted investments: Our share of net losses of equity accounted investments increased by Ps.1.5
billion, to Ps.1.7 billion from Ps.0.3 billion in 2013, mainly attributable to an increased loss of Ps.1.5 billion in the Oil and Gas Exploration and Production business segment, caused by higher losses attributable to impairment charges (Ps.1.0
billion) and only partially offset by an improvement of Ps.53 million in the Refining and Distribution business segment. See Analysis of Share of Net Loss of Equity Accounted Investments.

Operating income:Operating income decreased by Ps.103 million, or 7.6%, to Ps.1.2 billion from Ps.1.3 billion in 2013. This
variation is mainly attributable to a decrease in the operating income of our Oil and Gas Exploration and Production business segment of Ps.0.6 billion in 2014, which was partially offset by increases of Ps.0.2 billion, Ps.0.2 billion and Ps.0.1
billion in the operating income of our Refining and Distribution, Petrochemicals and Gas and Energy business segments, respectively. See Analysis of Operating Income by Business SegmentOil and Gas Exploration and Production.

Financial results: Financial income accounted for a gain of Ps.72 million in 2014 compared to Ps.53 million in 2013. This
35.8% increase was mainly the result of the effect of the depreciation of the Argentine peso against the U.S. dollar on our net monetary asset position in foreign currency.

Income tax: Income tax charges for 2014 and 2013 totaled Ps.742 million and Ps.552 million, respectively. The 34.4% increase in
tax charges was mainly due to the impairment of our investment in OCP, which was not deductible for tax purposes. This accounted for an increase in the effective income tax rate.



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PESAs business is mainly focused on the energy sector, through activities relating to oil
and gas exploration and production, refining and distribution, petrochemicals and gas and energy. Assets and operating losses grouped under Corporate, Other and Eliminations, expenses not attributable to any other operating segment and intercompany
eliminations are collectively shown. Corporate, Other and Eliminations includes expenses such as management fees, taxes on financial transactions, financial liability interests and income taxes, which are incurred by us in the ordinary course of
operations.

ANALYSIS OF OPERATING INCOME BY BUSINESS SEGMENT

Oil and Gas Exploration and Production

Operating income: Operating income for the Oil and Gas Exploration and Production business segment decreased by Ps.607 million,
or 45%, to Ps.0.7 billion from Ps.1.3 billion in 2013, mainly as a result of losses resulting from our share of net loss of equity accounted investments.

Sales: Sales for this business segment increased by Ps.2.7 billion, or 34.6%, to Ps.10.6 billion from Ps.7.8 billion in 2013.

Argentina

Sales in
Argentina grew by Ps.2.7 billion, or 35.5%, to Ps.10.4 billion in 2014 from Ps.7.6 billion in 2013, primarily as a result of a 50% improvement in average sales prices, partially offset by a 9.7% decrease in total combined daily sales volumes of oil
and gas, which averaged 77.7 thousand barrels of oil equivalent per day in 2014, compared to 86.1 thousand barrels per day in 2013.

Our total combined daily sales volumes decreased because of lower crude oil production, which was mainly attributable to the sale of our
interest in the Puesto Hernández Joint Venture (UTE) in January 2014, the natural decline of mature fields and weather conditions that adversely affected production in 2014. These effects were partially offset by the start of production of
new wells in the Medanito, Jagüel de los Machos and Estancia Agua Fresca fields.

Crude oil sales rose Ps.1.8 billion, or 28.5%, to
Ps.8.3 billion from Ps.6.4 billion in 2013, mainly due to a 54.4% increase in average sales price to Ps.616 per barrel from Ps.399 per barrel in 2013, based on the increase in domestic prices permitted by Resolution No. 35/13. Sales volumes,
however, totaled 36.7 thousand barrels per day in 2014 compared to 44.1 thousand barrels per day in 2013.

Gas sales rose Ps.861
million, or 74.2%, to Ps.2.0 billion from Ps.1.2 billion in 2013, primarily due to a 78.1% increase in average sales price to Ps.22.5 per thousand cubic feet from Ps.12.6 per thousand cubic feet in 2013, mainly attributable to greater production of
non-conventional gas, sold at higher prices under applicable regulations in the Neuquén basin. Average daily gas sales volumes were 246.1 million cubic feet and 251.7 million cubic feet in 2014 and 2013, respectively. Commencing
production at our non-conventional gas wells in the Neuquén basin allowed us to offset, in part, the natural decline of mature fields and the negative effects caused by weather conditions.

Outside of Argentina

Total
sales for operations outside of Argentina increased by Ps.3 million, or 1.6%, to Ps.192 million from Ps.189 million, mainly attributable to operations in Bolivia.

Gross profit: Gross profit for this business segment increased by Ps.1.2 billion, or 51.2%, to Ps.3.5 billion in 2014 from
Ps.2.3 billion in 2013. Our margin on sales was 33.5% and 29.8% in 2014 and 2013, respectively, mainly derived from operations in Argentina.

In 2014, gross profit attributable to operations in Argentina increased by Ps.1.2 billion, or 53.4%, to Ps.3.5 billion from Ps.2.3 billion,
and margin on sales increased to 33.3% in 2014 compared to 29.4% in 2013, mainly due to the increase in sales prices, partially offset by increased production costs and lower sales volumes.

Gross profit for operations outside of Argentina decreased by Ps.5 million, or 5.9%, to Ps.80 million in 2014 from Ps.85 million in 2013, with
a gross margin on sales of 41.7% and 45% in 2014 and 2013, respectively.



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Administrative and selling expenses: Administrative and selling expenses increased
by Ps.170 million, or 48.6%, to Ps.520 million in 2014 from Ps.350 million in 2013. This increase is mainly attributable to higher sales tax charges and transportation expenses derived from increased sales in 2014.

Exploration expenses: Exploration expenses decreased by Ps.12 million, or 14%, to Ps.70 million in 2014 from Ps.82 million in
2013. In 2014, these expenses were related to geological and geophysical survey expenses and the abandonment of on-shore exploration wells and the decrease was primarily a result of lower expenses for unsuccessful wells of Ps.11 million in 2014
compared to Ps.27 million in 2013.

Other operating expenses, net: Other operating expenses, net accounted for losses of
Ps.379 million in 2014 compared to Ps.227 million in 2013. This increase was mainly attributable to higher environmental remediation expenses of Ps.166 million primarily as a consequence of the extension of concessions in Río Negro and
impairment charges on fields in Bolivia of Ps.94 million, which were partially offset by a Ps.181 million gain derived from the sale of the Puesto Hernández Joint Venture (UTE).

Share of net loss of equity accounted investments: Our share of net loss of equity accounted investments was Ps.1.8 billion in
2014 compared to Ps.0.3 billion in 2013, mainly as a result of higher losses from impairment charges in mixed companies in Venezuela totaling Ps.1.4 billion in 2014 compared to Ps.0.4 billion in 2013.

Refining and Distribution

Operating income: Operating income for this business segment increased by Ps.196 million, or 90.7%, to Ps.412 million in 2014
from Ps.216 million in 2013, mainly as a result of an improvement in sales prices which more than offset the rise in production costs.

Sales: Sales for this business segment increased by Ps.3.3 billion, or 40.9%, to Ps.11.5 billion in 2014 from Ps.8.1 billion in
2013, mainly as a result of the increase in average sales prices for refined products and crude oil.

Sales volumes of crude oil totaled
220 thousand cubic meters in 2014 compared to 284 thousand cubic meters in 2013.

In 2014, Bahía Blanca Refinery
processed an average of 27,068 oil barrels per day, accounting for 88.7% of its installed capacity. Processed volumes were 5.8% lower than in 2013, mainly due to the scheduled shutdowns for maintenance works performed during 2014. Our inventory
management policy allowed us to meet demand in spite of the lower volumes processed.

Total sales volumes of refined products decreased by
105 thousand cubic meters, or 5.3%, to 1,857 thousand cubic meters in 2014 from 1,962 thousand cubic meters in 2013, in line with lower demand in 2014.

In 2014, sales volumes of diesel oil, gasoline, fuel oil, and IFO and other oil-related products totaled 784 thousand cubic meters,
491 thousand cubic meters, 394 thousand cubic meters and 188 thousand cubic meters, respectively.

In comparison, in 2013,
sales volumes of diesel oil, gasoline, fuel oil, and IFO and other oil-related products totaled 782 thousand cubic meters, 554 thousand cubic meters, 480 thousand cubic meters and 146 thousand cubic meters, respectively.

Gross profit: Gross profit for this business segment increased by Ps.0.5 billion, or 64.7%, to Ps.1.3 billion in 2014 from
Ps.0.8 billion in 2013, primarily due to an improvement in sales prices which more than offset the rise in production costs. As a result, margin on sales rose to 11.4% in 2014 from 9.7% in 2013.

Administrative and selling expenses: Administrative and selling expenses increased by Ps.236 million, or 32.4%, to Ps.964
million in 2014 from Ps.728 million in 2013, mainly as a consequence of higher selling expenses, such as maintenance expenses related to our own network of gas stations and taxes, associated with increased sales in 2014.

Other operating income (expenses), net: We incurred other operating expenses, net of Ps.29 million in 2014 compared to other
operating income, net of Ps.106 million in 2013.

Share of net loss of equity accounted investments: Our share of profit of
equity accounted investments in this business segment is attributable to our equity interest in Refinor, which accounted for a gain of Ps.97 million in 2014 as compared to a gain of Ps.44 million in 2013. This increase was mainly due to increases in
fuel and LPG sales prices. See Analysis of Share of Net Loss of Equity Accounted Investments.



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Petrochemicals

Operating income: Operating income for this business segment increased by Ps.199 million, or 65%, to Ps.505 million in 2014 from
Ps.306 million in 2013, primarily as a result of an increase in our sales margins.

Sales: Sales for this business segment
increased by Ps.1.1 billion, or 32.5%, to Ps.4.4 billion in 2014 from Ps.3.3 billion in 2013, primarily as a consequence of a 45% rise in average sales prices, partially offset by an 8.7% decline in sales volumes.

Styrenic products sales increased by Ps.650 million to Ps.2.9 billion in 2014 from Ps.2.2 billion in 2013, mainly as a consequence of a 49.7%
improvement in average sales prices, partially offset by a 13.8% decrease in sales volumes to 169 thousand tons in 2014 from 196.1 thousand tons in 2013.

In 2014, average sales prices in pesos in the styrene, polystyrene and synthetic rubber lines increased approximately 48.3%, 49.6% and 48.1%,
compared to 2013, respectively.

Performance of the main styrenic products in 2014 was as follows:

Styrene sales volumes decreased by 18.9% to 71 thousand tons in 2014, mainly due to a decline in exports directed to Chile and Brazil and
in domestic market sales.

Polystyrene and Bops (bi-oriented polystyrene) sales volumes totaled 58.4 thousand tons, a volume similar
to that recorded in 2013, with 58.8 thousand tons, but with improved margins. The 10% drop in domestic sales was offset by a 51% increase in export sales, with higher margins.

Synthetic rubber sales volumes totaled 39.6 thousand tons, accounting for a 20.3% decline compared to 2013, mainly attributable to a 32%
decrease in exports directed to Brazil and an 8% decline in domestic market sales.

Revenues from the catalytic reformer plant operations
rose Ps.438 million, or 39.5%, to Ps.1.5 billion in 2014 from Ps.1.1 billion in 2013, mainly as a consequence of a 48.1% improvement in average sales prices, partially offset by a 5.8% decrease in sales volumes to 331.3 thousand tons in 2014
from 352 thousand tons in 2013. This decrease is mainly attributable to lower processed virgin naphtha volumes and reduced consumption of catalytic gasoline.

Gross profit: Gross profit for this business segment increased by Ps.289 million, or 55.5%, to Ps.810 million in 2014 from
Ps.521 million in 2013, with a rise in margin on sales from 15.6% to 18.3% in 2014. This improvement is due to the combined effect of a higher average sales prices and an upgrade at Puerto General San Martín Reforming Plant that allowed us to
manufacture higher added-value products. During 2014, we set an all-time high in sales volumes of propellant in the domestic market.

Administrative and selling expenses: Administrative and selling expenses for this business segment increased by Ps.61 million,
or 39.4%, to Ps.216 million in 2014 from Ps.155 million in 2013, mainly as a consequence of higher selling expenses due to transport costs and taxes associated with increased sales in 2014.

Other operating expenses, net: Other operating expenses, net accounted for losses of Ps.89 million in 2014 and Ps.60 million in
2013. The Ps.29 million increase was mainly due to higher environmental remediation expenses.

Gas and Energy

Operating income: Operating income for this business segment increased by Ps.159 million, or 39.9%, to Ps.557 million in 2014
from Ps.398 million in 2013.

Gross profit: Gross profit for this business segment rose Ps.205 million, or 42.2%, to Ps.691
million in 2014 from Ps.486 million in 2013, mainly due to our electricity generation operations.

Administrative and selling
expenses: Administrative and selling expenses increased by Ps.54 million, or 55.1%, to Ps.152 million in 2014 from Ps.98 million in 2013, mainly as a consequence of hydrocarbon marketing and transportation operations, which recorded
increased selling expenses due primarily to taxes associated with higher sales in 2014.



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Other operating income (expenses), net: We recorded other operating income, net of
Ps.20 million in 2014 compared to other operating expenses, net of Ps.3 million in 2013. Our operating expenses in 2013 were mainly due to the adverse effect of a loss of Ps.34 million attributable to the sale of our equity interest in Distrilec.

Share of net loss of equity accounted investments: Share of net loss of equity accounted investments accounted for a loss
of Ps.2 million in 2014 compared to a gain of Ps.13 million in 2013. Gains in 2013 were mainly attributable to the impact of the restructuring on the equity interest in CIESA. See Analysis of Share of Net Loss of EquityAccounted
Investments.

Electricity Generation

Operating income:Operating income for this business segment increased by Ps.180 million, or 60%, to Ps.480 million in 2014 from
Ps.300 million in 2013.

The SE issued Resolution No. 95 in May 2013, which provided for regulatory changes retroactive to February
2013 in the MEMs method of compensation of generation companies according to their production scale and technology, as well as centralization of contracts in CAMMESA, both of electric power and fuels and related supplies, resulting in lower
sales and costs. This change affected the Genelba Combined Cycle and Pichi Picún Leufú Hidroelectric Complex. In May 2014, the SE, through Resolution No. 529, established tariff increases and additional compensation for generation
companies, including Genelba, which were applied retroactively to February 2014, resulting in increased operating income.

Sales: Sales for electricity generation increased by Ps.46 million, or 3.4%, to Ps.1.4 billion in 2014, mainly as a result of an
improvement in average sales prices (mainly attributable to the implementation of Resolution No. 529), which were partially offset by lower sales volumes. In this respect, sales volumes attributable to the Genelba, Pichi Picún
Leufú, Genelba Plus and Ecoenergía power plants were 4,561 Gwh, 832 Gwh, 1,140 Gwh and 104 Gwh, respectively, totaling 6,637 Gwh in 2014 as compared to 7,748 Gwh in 2013. Lower sales volumes in 2014 were due to scheduled shutdowns for
major maintenance works at the Genelba and Genelba Plus power plants and lower water supply at the Pichi Picún Leufú Hydroelectric Complex.

The availability factor and the reliability factor of Genelba, Genelba Plus, Pichi Picún Leufú and EcoEnergía power
plants reached 99.6%, 99.9%, 100% and 95.2%, respectively. These levels are similar to those recorded in 2013.

Gross
profit: In 2014, gross profit for this business segment increased by Ps.193 million, or 57.1%, to Ps.531 million in 2014 from Ps.338 million in 2013 and margin on sales attributable to all power plants rose to 37.6% in 2014 from 24.7% in
2013. The improvement in gross profit for this segment in 2014 was mainly attributable to the above-mentioned regulatory changes in the MEM and, to a lesser extent, to improved delivery by Pichi Picún Leufú power plant and sales under
the Energía Plus regulatory framework.

Marketing and Transportation of Gas

Operating income: Operating income for this business segment decreased by Ps.15 million, or 16%, to Ps.79 million in 2014 from
Ps.94 million in 2013.

Sales: Sales for this business segment increased by Ps.668 million, or 38.4%, to Ps.2.4 billion in
2014 from Ps.1.7 billion in 2013, mainly as a result of increased revenues from gas sales.

Revenues from gas sales increased by Ps.952
million, or 65.6%, to Ps.2.4 billion in 2014 from Ps.1.5 billion in 2013, mainly due to a 69.9% increase in average sales prices, which results from our sales of increased volumes from the Punta Rosada and El Mangrullo fields encompassed by the Gas
Plus program and to an increased share of sales to industries with higher average sales prices. Sales volumes totaled 253.7 million cubic feet in 2014 and 260.3 million cubic feet in 2013. Liquid fuel sales to third parties that totaled
Ps. 262 million in 2013, were recorded in 2014 under the Petrochemicals and Refining and Distribution segment due to changes in the allocation of liquid fuel sales.

Gross profit: Gross profit totaled Ps.160 million in 2014 as compared to Ps.148 million in 2013 and margin on sales decreased to
6.6% in 2014 from 8.5% in 2013.



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ANALYSIS OF SHARE OF NET LOSS OF EQUITY ACCOUNTED INVESTMENTS

The table below shows our share of profit (loss) of equity accounted investments for 2014 and 2013.



|                                                     |  |                                 |        |   |      |  |      |  
|---------------------------------------------------- |  | ------------------------------- | ------ | - | ---- |  | ---- | -
|                                                     |  | For the year ended December 31, |       
|                                                     |  | 2014                            |        |   | 2013 | 
|                                                     |  | (in millions of pesos)          |       
|CIESA (Gas and Energy)                               |  |                                 | (6     | ) |      |  | 10   |  
|Mixed companies in Venezuela (Oil and Gas E&P)       |  |                                 | (1,385 | ) |      |  | (357 | )
|Refinería del Norte S.A. (Refining and Distribution) |  |                                 | 97     |   |      |  | 44   |  
|OCP (Oil and Gas E&P)                                |  |                                 | (464   | ) |      |  | 19   |  
|Others                                               |  |                                 | 23     |   |      |  | 5    |  
|                                                     |  |                                 |        |   |      |  |      |  
|Total                                                |  |                                 | (1,735 | ) |      |  | (279 | )
|                                                     |  |                                 |        |   |      |  |      |  

Our share of net loss of equity accounted investments increased by Ps.1.5 billion to Ps.1.8 billion in 2014
from Ps.279 million in 2013, mainly due to an increased loss of Ps.1.5 billion in the Oil and Gas Exploration and Production business segment, which was partially offset by an improvement of Ps.53 million in the Refining and Distribution business
segment.

CIESA / TGS: In 2014, we recorded our share of net loss of equity in CIESA as a loss of Ps.6 million. In
2013, we recorded a gain of Ps.10 million for our share of profit of equity in CIESA. This change was mainly attributable to the impact of the restructuring on the equity interest in CIESA in 2013.

Mixed companies in Venezuela: Our share of net losses in mixed companies in Venezuela increased by approximately Ps.1.0 billion
to Ps.1.4 billion from Ps.357 million in 2013. This increase is primarily the result of impairment charges of Ps.1.3 billion in 2014 compared to Ps.520 million in 2013.

Refinería del Norte S.A.: Our share of profit of equity in Refinor accounted for a gain of Ps.53 million, to
Ps.97 million in 2014 compared to a gain of Ps.44 million in 2013, mainly as a result of an improvement in Refinors operating results, principally derived from the increase in average sales prices for refined products.

OCP: As of December 31, 2014, OCP had negative shareholders equity. PESA has not committed to make capital
contributions or provide financial assistance to OCP; therefore, our equity interest in OCP was valued at zero and we recorded a net loss of Ps.464 million for 2014 after giving effect to the capitalization during 2014 of a credit we held against
OCP.



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CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Changes in facts and circumstances or discovery of new information may result in revised estimates and actual results may differ from these
estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimates are revised and in any future periods affected.

The following summary provides more information about the
critical accounting policies that could have a significant impact on our results and should be read in conjunction with the Notes to our Audited Consolidated Financial Statements. Our accounting policies are more fully described in Notes 2 and 3 to
our Audited Consolidated Financial Statements.

Estimates of Oil and Gas Reserves

Evaluations of oil and gas reserves are important for the effective management of upstream assets. They are used to make investment decisions
about oil and gas properties. Oil and gas reserves quantities are also used as the basis for calculation of unit-of-production rates for depreciation of the related oil and gas assets and evaluation for impairment of our investments in upstream
assets.

Estimates of oil and gas reserves have been prepared in accordance with Rule 4-10 of Regulation S-X, promulgated by the SEC.

Reserves means oil and gas volumes (in cubic meters of oil equivalent) that are economically producible, in the areas where
we operate or have a (direct or indirect) interest and over which we have exploitation rights, including oil and gas volumes related to those service agreements under which we have 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. Reserves 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.

Reserves estimates are adjusted when so justified by changes in the evaluation criteria, or at least once a year. These reserves estimates
have considered the estimations of oil and gas consulting professionals.

Downward revision in our reserves estimates may result in:
(a) higher depreciation and depletion charges in future periods, and/or (b) an immediate write-down of an assets book value. If, on the other hand, the oil and gas reserves quantities were to be revised upward, our per barrel
depreciation and depletion expense, would be lower. Changes in proved oil and gas reserves will also affect the standardized measure of discounted cash flows presented under Item 18 of Form 20-F.

Impairment of Assets

Property, plant and equipment

As of December 31, 2015, our property, plant and equipment, net of accumulated depreciation and depletion, amounted to Ps.14.2 billion.

Our management assesses the recoverability of property, plant and equipment items whenever events or changes in circumstances (including
significant decreases in the market value of assets, in the prices of the main products we sell or in oil and gas reserves, as well as changes in the regulatory framework for our activities, significant increases in operating expenses, or evidence
of obsolescence or physical damage) indicate that the carrying amount may not be recoverable. The book value of property, plant and equipment asset is adjusted down to its recoverable value if its carrying amount exceeds the latter.

From a regulatory standpoint, recoverable value is defined as the higher of (i) fair value less costs of disposal and (ii) value in
use, the latter being defined as the addition of the discounted expected net cash flows that arise as a direct result of the use and eventual final disposition of the assets. To such end, among other elements, the assumptions that represent the best
estimate made by management of the economic conditions that will prevail throughout the useful life of the assets are considered.

For the
purpose of assessing recoverability of non-financial assets, assets are grouped at the lowest levels for which there are individually identifiable cash flows (cash generating units). For this purpose, each associate and joint venture is considered a
cash generating unit.

The methodology used for estimating the recoverable amount of assets mainly consists of determining the value in
use.



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Discount rates used to calculate the value in use are the respective weighted average cost of
capital (WACC). For each asset or cash generating unit, a specific WACC is determined that considers the business segment and the country conditions where the operations are performed.

In subsequent periods, reversal of an impairment charge is evaluated if there are changes in the assumptions used to determine the asset
recoverable value. In such a case, the book value of the asset or cash generating unit is written up to the lower of: (a) the book value that the asset or cash generating unit would have had if the impairment had never been recognized, and
(b) its recoverable value.

As of December 31, 2015, 2014 and 2013, we recognized impairment charges of Ps.635 million, Ps.94
million and Ps.11 million, respectively, on property, plant and equipment.

Equity accounted investments

The recoverability of our investments is highly sensitive to crude oil price volatility, to economic, social and regulatory changes and,
particularly, to resulting business plans. In determining the recoverable value of our investments, we use our managements best assumptions regarding prices based on business plans, production curves, transaction costs at market value and
investment needs to develop reserves for equity accounted investments. Discount rates used to measure recoverable value consider the type of asset involved, the business segment and the country where operations are conducted. Our estimates are
inherently imprecise because they reflect our managements expectation of future conditions that are often outside our managements control.

In 2015, 2014 and 2013, we recognized impairment charges for our equity accounted investments in mixed companies in Venezuela totaling
Ps.1,213 million, Ps.1,342 million and Ps.520 million, respectively. Additionally, in 2014, we recognized impairment charges of Ps.464 million for our equity accounted investment in OCP.

Successful Efforts Method of Accounting and Asset Retirement Obligations

We use the successful efforts method of accounting for our 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.

According to
the successful efforts method of accounting, exploration costs, excluding exploratory well costs, are expensed during the period in which they are incurred. Drilling costs of exploratory wells are capitalized until a determination is made on whether
the drilling resulted in proved reserves that justify the commercial development. If reserves are not found, such drilling costs are expensed. Occasionally, we may determine the existence of oil and gas reserves in an exploratory well, but the
reserves cannot be classified as proved because drilling is complete. In those cases, such costs continue to be capitalized insofar as it is determined that sufficient reserves exist to warrant the wells completion as a production well and we
are making sufficient progress in evaluating the economic and operating feasibility of the project. Expenses for unsuccessful wells totaled Ps.83 million, Ps.11 million and Ps.27 million in 2015, 2014 and 2013, respectively. As of
December 31, 2015, we maintained capitalized exploratory well costs amounting to Ps.269 million.

The initial asset retirement
obligations in hydrocarbons areas, discounted at a current 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.

Asset retirement obligations after completion of operations require our management to estimate the number of wells, long-term well abandonment
costs and the time remaining until abandonment. 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 when so justified by changes in the evaluation criteria or at least once a year.

Contingencies

We are subject to
various claims, lawsuits and other legal proceedings that arise during the ordinary course of our business. Our liabilities with respect to such claims, lawsuits and other legal proceedings cannot be estimated with certainty. Periodically, our
management reviews the status of each contingency and assesses the potential financial liabilities, for which it develops estimates with the assistance of legal advisors.



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Contingencies include outstanding lawsuits or claims for possible damages caused to third parties
in the ordinary course of our business, as well as third party claims arising from disputes concerning the interpretation of legislation.

We evaluate whether there would be additional expenses directly associated with the ultimate resolution of each contingency, which is included
in a provision if it may be reasonably estimable.

Changes in the facts or circumstances related to these types of contingencies, as well
as the future outcome of these disputes, can have a significant effect on the amount of provisions for legal proceedings recorded. As of December 31, 2015, provisions for legal proceedings in our financial statements (including current and
non-current) amounted to Ps.268 million.

Environmental costs

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, it is probable that such liabilities will materialize, and costs can be reasonably estimated. The actual recognition and amount of these provisions are generally based on our 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.

We measure liabilities based on our best estimation of the present value of future costs, using currently available technology and applying
current environmental laws and regulations as well as our own internal environmental policies.

Changes in the facts or circumstances
related to these types of liabilities may give rise to differences between actual future costs and estimates. As of December 31, 2015, reserves for environmental remediation (including current and non-current) amounted to Ps.338 million.

Employee defined benefits

Actuarial commitments to employee benefit plans 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 pension plan
obligations depends on multiple factors that are determined according to actuarial estimates which are revised annually by an independent actuary, net of the fair value of the plan assets, when applicable. To such effect, certain assumptions are
used including the discount rate and wage growth rate assumptions.

Changes in assumptions related to these types of liabilities may give
rise to differences between actual future costs and estimates. As of December 31, 2015, related benefit liabilities amounted to Ps.534 million.



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LIQUIDITY AND CAPITAL RESOURCES

The default on Argentine sovereign debt at the end of 2001, the global financial crisis and related decline in global stock markets as well as
the insolvency of major financial institutions toward the end of 2008, and the current global economic slowdown, among other factors, have all significantly limited the ability of Argentine companies to access international financial markets at
reasonable cost and conditions. Despite the recent measures taken by the new administration, the prospects for Argentine companies of accessing financial markets may be limited in terms of the amount of financing available, and the conditions and
cost of such financing. See Item 3. Key InformationRisk Factors.

In response to the limited availability of financing
for Argentine companies, we closely monitor our liquidity levels in order to ensure compliance with our financial obligations and meet the targets contemplated by our business plan. Our ability to execute and carry out our strategic business plan
depends upon our ability to obtain financing at a reasonable cost and on reasonable terms. Along these lines, and as a guiding principle, financial solvency is the foundation on which sustainable development of our businesses is built.

Pursuant to these strategic guidelines, we seek to:



| |  |  | Design a capital structure consistent with industry standards adaptable to the financial markets in which we operate;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | Maintain a liquidity levelinvested in financial assets with high credit qualitythat allows us to meet our obligations;
| | - |  | ------------------------------------------------------------------------------------------------------------------------



| |  |  | Maintain a debt maturity profile consistent with projected cash generation; and
| | - |  | -------------------------------------------------------------------------------



| |  |  | Efficiently manage borrowing costs.
| | - |  | -----------------------------------

Adhering to these guidelines enables us to treat
financial management as a key element in the value-creation process.

Financial management highlights for the 2015 fiscal year include:



| |  |  | Full compliance with all financial liabilities, maintaining our level of indebtedness at approximately U.S.$300 million; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | Continued implementation of our capital expenditures plan.
| | - |  | ----------------------------------------------------------

The most significant factors
generally affecting our cash flow from operating activities are: fluctuations in prices for crude oil and oil related products; fluctuations in production levels and demand for our products; fluctuations in margins in the Refining and Distribution
and Petrochemicals business segments; changes in regulations, such as taxes, taxes on exports, changes in royalty payments and price controls; fluctuations in exchange and interest rates; and our oil and gas reserves replacement capacity.

Analysis of Liquidity and Capital Resources

The table below reflects our statements of cash flow for the fiscal years ended December 31, 2015, 2014 and 2013 under IFRS. Amounts are
stated in millions of pesos.



|                                                       |  |                                 |        |   |      |  |        |      |  |  |        |  
|------------------------------------------------------ |  | ------------------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                       |  | For the year ended December 31, |       
|                                                       |  | 2015                            |        |   | 2014 |  |        | 2013 | 
|Cash and cash equivalents at the beginning of the year |  |                                 | 2,278  |   |      |  | 1,193  |      |  |  | 1,260  |  
|Net cash provided by operations                        |  |                                 | 4,239  |   |      |  | 4,646  |      |  |  | 2,778  |  
|Net cash used in investing activities                  |  |                                 | (4,620 | ) |      |  | (3,430 | )    |  |  | (1,850 | )
|Net cash used in financing activities                  |  |                                 | (233   | ) |      |  | (412   | )    |  |  | (1,173 | )
|Effect of exchange rate changes on cash                |  |                                 | 565    |   |      |  | 281    |      |  |  | 178    |  
|                                                       |  |                                 |        |   |      |  |        |      |  |  |        |  
|Cash and cash equivalents at the end of the year       |  |                                 | 2,229  |   |      |  | 2,278  |      |  |  | 1,193  |  
|                                                       |  |                                 |        |   |      |  |        |      |  |  |        |  

Cash

As of December 31, 2015, 2014 and 2013, cash and cash equivalents were Ps. 2.2 billion, Ps.2.3 billion and Ps.1.2 billion, respectively.

Our goal is to maintain excess cash primarily in short-term investments to ensure adequate liquidity levels. We primarily invest in money
market mutual funds, overnight deposits and term deposits.

On October 25, 2011, the Argentine government issued Decree
No. 1,722/11 providing that all foreign currency revenues obtained from exports made by mining and oil and gas companies must be repatriated and sold on the local foreign exchange market, which is the general regime applicable to revenues
generated by Argentine exports. This decree requires PESA to repatriate and sell in the local foreign exchange market all of its export proceeds.



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Subsequently, during April and May 2012, Resolution Nos. 142/12 and 231/12 issued by the
Ministry of Economy, and Communication A 5,300 issued by the Central Bank reduced the time period for repatriation of export sale proceeds. In February 2016, Communication A 5,899 issued by the Central Bank eliminated the
time period for repatriation of export collections established by Communication A 5,300. See Item 3. Key InformationRisk FactorsFactors Relating to ArgentinaGovernment intervention in the Argentine economy could
adversely affect our results of operations or financial condition, Item 3. Key InformationExchange Rates, Item 3. Key InformationExchange Controls and Item 5. Operating and Financial Review and
ProspectsDescription of Indebtedness.

Operating Activities

Net cash provided by operations totaled Ps.4.2 billion in 2015, Ps.4.7 billion in 2014 and Ps.2.8 billion in 2013.

Net cash provided by operations decreased by Ps.407 million, or 8.8%, to Ps.4.2 billion in 2015 from Ps.4.6 billion in 2014, mainly as a
result of increased income tax payments and higher business expenses, which were partially offset by increased gross profit in 2015.

Net
cash provided by operations increased by Ps.1.9 billion, or 67.2%, to Ps.4.6 billion in 2014 from Ps.2.8 billion in 2013, mainly as a result of improved gross profit in 2014, partially offset by increased selling expenses in line with the increase
in sales.

Investing Activities

Net cash used in investing activities totaled Ps.4.6 billion in 2015, Ps.3.4 billion in 2014 and Ps.1.8 billion in 2013, as detailed in the
table below. Amounts are stated in million of pesos:



|                                      |  |      |        |   |      |  |        |      |  |  |        |  
|------------------------------------- |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                      |  | 2015 |        |   | 2014 |  |        | 2013 | 
|Divestments                           |  |      | 792    |   |      |  | 373    |      |  |  | 605    |  
|Capital expenditures                  |  |      | (5,474 | ) |      |  | (3,853 | )    |  |  | (2,524 | )
|Other                                 |  |      | 62     |   |      |  | 50     |      |  |  | 69     |  
|                                      |  |      |        |   |      |  |        |      |  |  |        |  
|Net cash used in investing activities |  |      | (4,620 | ) |      |  | (3,430 | )    |  |  | (1,850 | )
|                                      |  |      |        |   |      |  |        |      |  |  |        |  

The Ps.1,190 million increase in cash used in investing activities in 2015 was mainly due to higher capital
expenditures, partially offset by increased cash from divestments.

The Ps.1,580 million increase in cash used in investing activities in
2014 was mainly due to higher capital expenditures and decreased cash from divestments.

The table below reflects total capital
expenditures, net of divestments, in millions of pesos:



|                                         |  |      |       |   |      |  |       |      |  |  |       |  
|---------------------------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                         |  | 2015 |       |   | 2014 |  |       | 2013 | 
| Oil and Gas Exploration and Production |  |      | 5,079 |   |      |  | 3,460 |      |  |  | 2,237 |  
| Refining and Distribution              |  |      | 191   |   |      |  | 188   |      |  |  | 166   |  
| Petrochemicals                         |  |      | 119   |   |      |  | 73    |      |  |  | 101   |  
| Gas and Energy                         |  |      | 65    |   |      |  | 97    |      |  |  | 6     |  
| Corporate, Other and Eliminations      |  |      | 20    |   |      |  | 35    |      |  |  | 14    |  
|                                         |  |      |       |   |      |  |       |      |  |  |       |  
|Total capital expenditures               |  |      | 5,474 |   |      |  | 3,853 |      |  |  | 2,524 |  
| Divestments                            |  |      | (792  | ) |      |  | (373  | )    |  |  | (605  | )
|                                         |  |      |       |   |      |  |       |      |  |  |       |  
|Total net capital expenditures           |  |      | 4,682 |   |      |  | 3,480 |      |  |  | 1,919 |  
|                                         |  |      |       |   |      |  |       |      |  |  |       |  



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Oil and Gas Exploration and Production

Capital expenditures in the Oil and Gas Exploration and Production business segment totaled Ps.5.1 billion, Ps.3.5 billion and Ps.2.2 billion
in 2015, 2014 and 2013, respectively.

During 2015, 2014 and 2013, capital expenditures were mainly focused on improving the basic
production curve, on exploration activities and on development of non-conventional gas reserves. Main expenditures included well drilling, expansion of secondary recovery projects and expansion of surface facilities and compression systems. Capital
expenditures were focused on Argentina, primarily in seismic surveys and drilling.

In 2015, our investments included the drilling of 42
producing and injection wells and the repair of 23 wells mainly in the Neuquén basin. In addition, four onshore exploration wells were drilled to obtain data and assess productivity in the Vaca Muerta and Agrio formations.

In 2014, our investment plan involved the drilling of 36 producing and injection wells and the repair of 30 wells in the Neuquén
Austral Basins. This included drilling 30 wells and repairing 22 wells in the Neuquén basin and drilling 6 wells and repairing 8 wells in the Austral Basin. Additionally in December 2014, the legislature of the Province of Rio Negro ratified
the agreement entered into with the government of the Province of Rio Negro to extend for an additional 10-year term our concessions in the 25 de Mayo Medanito S.E., Jagüel de los Machos, Río Neuquén and Entre Lomas fields, which
involves the payment of a fixed bond.

In 2013, our investment plan involved drilling 51 producing and injection wells and repairing 87
wells, mainly in the Neuquén basin, in Puesto Hernández, Medanito, El Mangrullo, Sierra Chata, Aguada de la Arena and Río Neuquén areas. In the Austral Basin, investments were mainly focused on Estancia Agua Fresca and La
Paz areas.

Refining and Distribution

Capital expenditures in the Refining and Distribution business segment totaled Ps.191 million, Ps.188 million and Ps.166 million during 2015,
2014 and 2013, respectively.

During 2015, our investments in the Refinery were focused mainly on safety and environmental matters, legal
compliance, and the optimization and revamping of the different refinery areas. Such investments included the acquisition of a Vacuum Recovery Unit (VRU) as part of the revamping plan of the truck loading yard, the clean up of waste water treatment
tanks, and scheduled shutdowns of processing units and retrofitting works to loading areas at Puerto Galván. In addition, investments at Dock Sud and Caleta Paula Plants were associated with operational improvements related to logistics and
tank revamping works.

During 2014, our investments in the Refinery were focused mainly on a scheduled maintenance shutdown, and, to a
lesser extent, logistics improvements and safety and environmental matters. In addition, investments at Dock Sud and Caleta Paula Plants were associated with operational improvements in logistics and tank revamping works.

During 2013, our investments were made principally in the Bahía Blanca Refinery to improve loading and unloading facilities for
vessels, the dispatch plant and to introduce new safety and environment-related technologies. In addition, at the Dock Sud Plant, Caleta Paula and the Heavy Products Plant, investments were made to improve logistics and tank upgrading.

Petrochemicals

In the
Petrochemicals business segment, capital expenditures totaled Ps. 119 million, Ps.73 million and Ps.101 million in 2015, 2014 and 2013, respectively.

During 2015, we made investments of Ps.127 million, mainly in works related to the scheduled general shutdown, including, among others.
catalyst and furnace tube replacement and compressor manteinance, performed at the Puerto General San Martín complex involving the styrene, ethylbenzene, ethylene plants, and San Lorenzo ethylene plant, the Power Plant and the waste water
treatment plant. In addition, we made investments in the synthetic rubber unit, investments required for the gasoline reforming unit shutdown to be performed in 2016, and investments related to HES, maintenance and operational reliability at the
styrene, polystyrene and synthetic rubber plants.

During 2014, our investments were mainly focused on maintenance works at the styrene,
polystyrene and rubber plants. In addition, completion of investments allowed for an increase in propellant gas production. Also, in 2014, a scheduled shutdown for maintenance works at the ethylene unit in San Lorenzo was completed and preventive
maintenance works in the turbo boiler were carried out.



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The most significant investments made in 2013 include, among others, investments to increase
energy efficiency at the reforming unit, increase recovery of propellant gas and diversify raw materials for crackers. In addition, the project for installation of a new monomer styrene storage tank and the fourth silo at Zárate Plant was
completed, increasing our flexibility to make bulk deliveries.

Gas and Energy

In the Gas and Energy business segment, capital expenditures totaled Ps. 65 million, Ps.97 million and Ps.6 million in 2015, 2014 and
2013, respectively.

The investments made in 2015 and 2014, were mainly attributable to major maintenance and the extension of the useful
life of gas and steam turbines in the Genelba combined cycle.

Financing Activities

Net cash used in financing activities totaled Ps.233 million, Ps.412 million and Ps.1,173 million, in 2015, 2014 and 2013, respectively, as
detailed in the table below in millions of pesos:



|                                 |  |      |      |   |      |  |      |      |  |  |        |  
|-------------------------------- |  | ---- | ---- | - | ---- |  | ---- | ---- |  |  | ------ | -
|                                 |  | 2015 |      |   | 2014 |  |      | 2013 | 
| Long-term debt payments        |  |      | (46  | ) |      |  | (111 | )    |  |  | (1,302 | )
| Short-term debt financing, net |  |      | (24  | ) |      |  | (124 | )    |  |  | 96     |  
| Dividends paid1                |  |      | (163 | ) |      |  | (177 | )    |  |  | (16    | )
| Long-term debt financing, net  |  |      |     |   |      |  |     |      |  |  | 49     |  
|                                 |  |      |      |   |      |  |      |      |  |  |        |  
|                                 |  |      | (233 | ) |      |  | (412 | )    |  |  | (1,173 | )
|                                 |  |      |      |   |      |  |      |      |  |  |        |  



|(1) | Includes dividends paid by PELSA.
|--- | ---------------------------------

We paid long-term debt in the amount of Ps.46 million,
Ps.111 million and Ps.1.3 billion in 2015, 2014 and 2013, respectively.

Cash used in financing activities in 2013 included the payment of
our Class R Notes in an amount of Ps.1.2 billion.

We paid cash dividends in the amount of Ps.137 million and Ps.116 million in 2015
and 2014, respectively. In addition, PELSA paid Ps.26 million, Ps.61 million and Ps.16 million attributable to non-controlling interest in 2015, 2014 and 2013, respectively.



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DESCRIPTION OF INDEBTEDNESS

Substantially all of our financial debt and the debt of our principal subsidiaries is denominated in U.S. dollars. The description that
follows describes the indebtedness of PESA and its consolidated subsidiaries.

As of December 31, 2015, 2014 and 2013, total
indebtedness totaled Ps. 4 billion, Ps.2.7 billion and Ps.2.2 billion, respectively, as detailed in the table below:



|                         |  |      |       |  |      |  |       |      |  |  |       | 
|------------------------ |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                         |  | 2015 |       |  | 2014 |  |       | 2013 | 
|Short-term debt:         |  |      |       |  |      |  |       |      |  |  |       | 
| Bonds                  |  |      | 29    |  |      |  | 19    |      |  |  | 15    | 
| Financial institutions |  |      | 32    |  |      |  | 73    |      |  |  | 193   | 
|                         |  |      |       |  |      |  |       |      |  |  |       | 
|                         |  |      | 61    |  |      |  | 92    |      |  |  | 208   | 
|                         |  |      |       |  |      |  |       |      |  |  |       | 
|Long-term debt:          |  |      |       |  |      |  |       |      |  |  |       | 
| Bonds                  |  |      | 3,910 |  |      |  | 2,562 |      |  |  | 1,943 | 
| Financial Institutions |  |      |      |  |      |  | 25    |      |  |  | 81    | 
|                         |  |      |       |  |      |  |       |      |  |  |       | 
|                         |  |      | 3,910 |  |      |  | 2,587 |      |  |  | 2,024 | 
|                         |  |      |       |  |      |  |       |      |  |  |       | 
|Total indebtedness       |  |      | 3,971 |  |      |  | 2,679 |      |  |  | 2,232 | 
|                         |  |      |       |  |      |  |       |      |  |  |       | 

As of December 31, 2015, an aggregate principal amount of U.S.$300 million of our Series S Notes,
issued under our U.S.$2.5 billion global note program that expired in May 2008, remained outstanding.

Our Series S Notes accrue
interest at a 5.875% annual rate and mature in May 2017. Under the documentation governing the Series S Notes, if a change of control (as defined therein) occurs, we must make an offer to repurchase from the holders any and all outstanding
Series S Notes at a purchase price equal to 101% of the aggregate principal amount of such notes outstanding, plus any accrued and unpaid interest thereon, through the purchase date. Our Series S Notes have the benefit of a credit
enhancement pursuant to a standby purchase agreement entered into by Petrobras, pursuant to which, in the case of a default by us in the payment of principal, interest or any other amounts owed under the Series S Notes, Petrobras would be
obligated to purchase from the holders of such notes, at their face value, all rights to receive payments arising thereunder. See Item 3. Key InformationRisk FactorsWe may not have the ability to raise the funds necessary to
finance a change of control offer as required by our Series S Notes.

The proceeds from the issuances of these notes were used to
refinance liabilities, increase working capital, make capital expenditures in Argentina or make capital contributions to subsidiaries and associates.

In addition, in August 2013, the CNV authorized a new corporate notes program for an outstanding principal amount not to exceed
U.S.$500 million or its equivalent in other currencies, maturing within a 5-year term or the maximum term that may be established by any applicable regulation in the future.

The following table represents our debt maturity profile as of December 31, 2015:



|                  |  |        |    |  |         |  |       |         |  |  |       |  |  |  |       | 
|----------------- |  | ------ | -- |  | ------- |  | ----- | ------- |  |  | ----- |  |  |  | ----- | 
|                  |  | 1 year |    |  | 2 years |  |       | 3 years |  |  | Total | 
|Millions of pesos |  |        | 61 |  |         |  | 3,910 |         |  |  |      |  |  |  | 3,971 | 

On June 9, 2005, the Argentine government issued Decree No. 616/05, requiring that any cash inflow
to the domestic market derived from foreign loans to the Argentine private sector shall have a maturity for repayment of at least 365 days from the date of the cash inflow. In addition, at least 30% of the amount had to be deposited with domestic
financial institutions. This deposit (1) had to be registered, (2) had to be non-transferable, (3) had to be non-interest bearing, (4) had to be made in U.S. dollars, (5) had to have a term of 365 days, and (6) could
not be used as security or collateral in connection with other credit transactions. Central Bank communication A 5850, issued on December 17, 2015, and Resolution No. 3 of the Ministry of Economy and Public Finance, issued on
December 18, 2015, reduced from 365 days to 120 days the term for financial loan inflows, and from 30% to 0% the mandatory deposit estiblished by Decree No. 616/05.

Under Central Bank Communication A 4,860, issued on October 30, 2008, export collections required to be transferred and
settled in the local exchange market must be transferred within a ten working day term to foreign offices of local financial institutions, except for export collections applied to the payment of export pre-financings granted by financial
institutions outside Argentina. Under this requirement, the time frame to bring foreign currency into Argentina from certain export collections is reduced, resulting in a restriction on the term and amount of some of our sources of financing.
Central Banks Communication A 5,899, dated February 4, 2016, removed the 10 day-period established by Communication A 4,860.



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On October 25, 2011, the Argentine government issued Decree No. 1,722/11, providing
that all foreign currency revenues obtained from exports made by mining and oil and gas companies must be repatriated and sold within the local foreign exchange market, which is the general regime applicable to export revenues generated by Argentine
exports. Prior to the issuance of Decree No. 1,722/11, companies engaged in exploration and development of hydrocarbons benefited from a special regime that allowed them to retain overseas up to 70% of the proceeds of certain exports.
Therefore, we now have the obligation to repatriate all of our exports proceeds.

Under Central Bank Communication A 5,300,
issued on April 26, 2012, export collections must be sold in the Argentine foreign currency market within 15 days from receipt of such funds abroad. Central Banks Communication A 5,899, dated February 4, 2016, removed the
15 day-period established by Communication A 5,300.

Under Central Bank Communication A 5,850, issued on
December 17, 2015, and Resolution No. 3/15 of the Ministry of Economy and Public Finance, issued on December 18, 2015, certain restrictions established in Decree No. 616/05 were eliminated by the new administration, including
(i) the elimination of the requirement to mandatory transfer and settle the proceeds from new foreign financial indebtedness incurred by the foreign financial sector, the non-financial private sector and local governments through the MULC
(except that the evidence of the mandatory transfer and settlement of funds through the MULC will still be required for subsequent access to the MULC in order to repay principal and interest of such indebtedness); (ii) the reduction of the
mandatory minimum period in which the proceeds of any new financial indebtedness and renewal of existing indebtedness incurred by residents, held by foreign creditors and transferred through the MULC must be kept in Argentina, from 365 calendar days
to 120 calendar days from the date of the transfer of the relevant amount; (iii) in the case of partial or total prepayment of principal corresponding to foreign financial indebtedness, access to the MULC is permitted subject to the mandatory
minimum period mentioned above; (iv) the reestablishment of Argentine residents rights to purchase foreign currency in an amount up to U.S.$ 2.0 million per month to acquire offshore assets without specific allocation; (v) the
reduction from 30% to 0% of a mandatory, non-transferable and non-interest bearing deposit of the amount of certain transactions involving foreign currency inflows for a 365 calendar day period; and (vi) the elimination of the requirement of a
minimum holding period (72 business hours) related to the purchase and sale of securities authorized to be listed or negotiated in different stock local and international exchange markets.

Under Central Banks Communication A 5,890, dated January 21, 2016, restrictions on the prepayment of new foreign
financial indebtedness were removed. Prepayment of foreign financial indebtedness outstanding prior to December 17, 2015 is only allowed to the extent that prepayment is financed with foreign funds through capital contributions or the
incurrence of foreign financial indebtedness.

Notwithstanding the measures recently adopted by the new administration, future measures
issued by the Argentine government may curtail our ability to finance our operations through new loans granted by our controlling shareholder, its subsidiaries outside Argentina or any other kind of lender. Our ability to execute and carry out our
strategic business plan depends upon our ability to obtain financing at a reasonable cost and on reasonable terms. See Item 3. Key InformationRisk FactorsFactors Relating to ArgentinaGovernment intervention in the Argentine
economy could adversely affect our results of operations or financial condition and Item 3. Key InformationExchange Rates and Item 3. Key InformationExchange Controls.

Change of Control and Cross-Default Provisions

Under the supplemental indenture for the Series S Notes, if a change of control occurs, we must offer to repurchase any and all such notes that
are outstanding at a purchase price equal to 101% of the aggregate principal amount of such notes, plus any accrued and unpaid interest thereon and additional amounts, if any, through the purchase date. Our notes and financial indebtedness as of
December 31, 2015 included cross-default provisions whereby, in the case of the notes, the trustee under the relevant notes may be instructed by the noteholders representing at least 25% of the related outstanding capital to declare, or in the
cases of the bank financings, the relevant lender may declare, as the case may be, all the amounts owed thereunder to be due and payable if any of our or our significant subsidiaries debt is accelerated or not paid when due, provided that
those due and unpaid amounts exceed the higher of U.S.$25 million or 1% of PESAs shareholders equity at the time such debt is due, and provided further that the default has not been eliminated or cured within the applicable legal and/or
contractual terms, after we have been served notice of the default.

In addition, our Series S Notes contain cross-default provisions
that are triggered if the maturity of any indebtedness of Petrobras or of any of its material subsidiaries in a total aggregate principal amount of Ps.100 million or more is accelerated. The Series S Notes also contain other customary
event of default provisions relating to Petrobras. Description of Indebtedness and Liquidity and Capital ResourcesFinancing Activities.

Our outstanding notes and financial indebtedness include additional provisions which, in case of a breach and as long as such default is not
waived or cured under the applicable legal and/or contractual terms, may also result in an acceleration of the debt.



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In connection with other instruments to which we are a party, certain banking institutions have
issued guarantees at our request in favor of third parties and we could be required to replace or to collateralize them with a cash deposit in case of a change of control. Additionally if we fail to replace or collateralize such guarantees, which
may in turn trigger cross-default provisions in other of our debt instruments then outstanding, and therefore certain amounts may become immediately due. See Item 3. Key InformationRisk FactorsFactors Relating to Our Business
If a change of control occurs, we may not have the ability to raise the funds necessary to finance a change of control the repurchase offer as required by our Series S Notes or to replace or collateralize guarantees.

As of the date of this Annual Report, we have complied with all covenants and other terms and conditions under our loan agreements, corporate
bonds and other financial indebtedness.



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FUTURE CAPITAL REQUIREMENTS

PESAs shareholders meeting held on April 28, 2016: (a) approved (i) in accordance with legal requirements, an
increase of Ps.810 million in the reserve for future dividens, and the transfer to the legal reserve of Ps.43 million based on our results in 2015, and (ii) the maintenance of the reserve for future investments (consisting of an
increase in the amount of Ps.5,474 million and a decrease in the amount of Ps.5,474 million); and (b) delegated to the Board of Directors the determination of the actual dividend distribution date and amount. As a result of the foregoing,
as of the date of this Annual Report, the reserve for future dividends amounts to Ps.1,969 million and the reserve for future investments amounts to Ps.5,730 million.

We estimate that our capital expenditure requirements, debt payment obligations, dividend payments and working capital will be financed with
cash from operations and, to a lesser extent, with new debt financings and possible divestments.

Our level of investments will depend on
a variety of factors, many of which are beyond our control. These include the future evolution of the price of commodities we sell, the behavior of energy demand in Argentina and in regional markets, the existence and competitive impact of
alternative projects, the enforcement of regulations and changes in applicable regulations, taxes and royalties, and the political, economic and social situation prevailing in the countries where we operate.

Oil and Gas Exploration and Production

Our 2016 investment plan is consistent with reserves replacement and production goals, mainly in the Neuquén basin in Argentina, and is
primarily aimed at ensuring PESAs sustainable growth.

Efforts will continue to develop oil and gas reserves through well drilling,
delimitation of reserves, and expansion of secondary recovery projects and of relevant surface facilities.

Along these lines, and by
using technology existing in Argentina, we will continue with exploration study and investment programs aimed at making new discoveries at conventional and non-conventional oil and gas reservoirs. As of December 31, 2015, we maintained
investment commitments for approximately U.S.$9 million, including the perforation of exploratory wells in the Río Colorado, Río Atuel, and Parva Negra Este blocks, all located in Argentina. PELSA has investment commitments totaling
U.S.$22 million related to the perforation of exploratory wells in the Entre Lomas area.

Refining and Distribution

In 2016, investments will focus on operational efficiency and reliability improvements for refining facilities as a whole and maintenance of
PESAs gas stations network.

Petrochemicals

In 2016, investments will be focused on reliability and maintenance activities, and the performance of a scheduled plant shutdown for
maintenance works at Puerto General San Martín Gasoline Reforming unit.

Gas & Energy

In the Gas and Energy business segment, we will continue to seek to secure self-supply and, at the same time, develop profitable marketing
alternatives.



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OFF-BALANCE SHEET TRANSACTIONS

Other than as described below, we do not have any off-balance sheet arrangements required to be disclosed by Item 5 of Form 20-F.

OCP Investments Letters of Credit

In order to guarantee compliance with our financial commitments under the Ship or Pay transportation agreement executed with OCP and a portion
of OCPs contractual obligations, we are required to procure letters of credit. These letters of credit are required to remain in effect until December 2018. As of December 31, 2015, we had procured letters of credit for a total amount of
approximately U.S.$64.2 million, mainly related to the Ship or Pay transportation agreement. As the letters of credit expire, we must renew or replace them. Otherwise, we would have to deposit cash in amounts equal to our guarantee obligations,
which would have a material adverse effect on our cash flows.

Other Guarantees

In certain business operations in which PESA and its counterparties act as customers and suppliers, both sides have obtained guarantees
(promissory bonds) in equivalent values, which as of December 31, 2015 amounted to Ps.652 million.

Our warranty bonds, sureties and
guarantees as of December 31, 2015, which are not disclosed individually in the notes to our Audited Consolidated Financial Statements, amounted to Ps.2.6 billion and are mainly related to environmental, operating and legal obligations.

CONTRACTUAL OBLIGATIONS

The following table summarizes certain contractual obligations as of December 31, 2015. The table does not include accounts payable.

For further information on our contractual commitments, please see Note 32 to our Audited Consolidated Financial Statements.



|                                                         |  |                        |        |  |                 |  |        |           |  |  |           |  |  |                  |       |  |  |  |        | 
|-------------------------------------------------------- |  | ---------------------- | ------ |  | --------------- |  | ------ | --------- |  |  | --------- |  |  | ---------------- | ----- |  |  |  | ------ | 
|                                                         |  | Payments due by period |       
|                                                         |  | Total                  |        |  | Less than1 year |  |        | 1-3 years |  |  | 3-5 years |  |  | More than5 years |      
|                                                         |  | (in millions of pesos) |       
|Debt Obligations(1)                                      |  |                        | 4,288  |  |                 |  | 263    |           |  |  | 4,025     |  |  |                  |      |  |  |  |       | 
|Investment commitments                                   |  |                        | 18,654 |  |                 |  | 8,235  |           |  |  | 5,438     |  |  |                  |      |  |  |  | 4,981  | 
|Purchase Obligations                                     |  |                        |        |  |                 |  |        |           |  |  |           | 
|Long-term service agreement (2)                          |  |                        | 2,697  |  |                 |  | 1,515  |           |  |  | 944       |  |  |                  | 77    |  |  |  | 161    | 
|Petroleum services and materials (2)                     |  |                        | 8,526  |  |                 |  | 5,611  |           |  |  | 2,451     |  |  |                  | 464   |  |  |  |       | 
|Transportation capacity (3)                              |  |                        | 1,347  |  |                 |  | 143    |           |  |  | 331       |  |  |                  | 229   |  |  |  | 644    | 
|Gas purchase agreements for Genelba, PGSM & Bahía Blanca |  |                        | 212    |  |                 |  | 212    |           |  |  |          |  |  |                  |      |  |  |  |       | 
|Gasolines                                                |  |                        | 23,181 |  |                 |  | 3,758  |           |  |  | 4,158     |  |  |                  | 4,158 |  |  |  | 11,107 | 
|Crude oil transportation agreement with
OCP(4)           |  |                        | 387    |  |                 |  | 299    |           |  |  | 88        |  |  |                  |      |  |  |  |       | 
|Pension Plan(4)                                          |  |                        | 540    |  |                 |  | 6      |           |  |  | 131       |  |  |                  | 95    |  |  |  | 308    | 
|                                                         |  |                        |        |  |                 |  |        |           |  |  |           |  |  |                  |       |  |  |  |        | 
|Total                                                    |  |                        | 59,832 |  |                 |  | 20,042 |           |  |  | 17,566    |  |  |                  | 5,023 |  |  |  | 17,201 | 
|                                                         |  |                        |        |  |                 |  |        |           |  |  |           |  |  |                  |       |  |  |  |        | 
|Sales Obligations                                        |  |                        |        |  |                 |  |        |           |  |  |           | 
|Natural gas                                              |  |                        | 745    |  |                 |  | 745    |           |  |  |          |  |  |                  |      |  |  |  |       | 
|Transportation capacity                                  |  |                        | 12     |  |                 |  | 4      |           |  |  | 7         |  |  |                  | 1     |  |  |  |       | 
|Electric power                                           |  |                        | 4,252  |  |                 |  | 866    |           |  |  | 1,333     |  |  |                  | 1,235 |  |  |  | 818    | 
|LPG                                                      |  |                        | 714    |  |                 |  | 119    |           |  |  | 240       |  |  |                  | 239   |  |  |  | 116    | 
|Gasolines                                                |  |                        | 13,787 |  |                 |  | 2,614  |           |  |  | 2,392     |  |  |                  | 2,392 |  |  |  | 6,389  | 
|Diesel                                                   |  |                        | 247    |  |                 |  | 247    |           |  |  |          |  |  |                  |      |  |  |  |       | 
|                                                         |  |                        |        |  |                 |  |        |           |  |  |           |  |  |                  |       |  |  |  |        | 
|Total                                                    |  |                        | 19,757 |  |                 |  | 4,595  |           |  |  | 3,972     |  |  |                  | 3,867 |  |  |  | 7,323  | 
|                                                         |  |                        |        |  |                 |  |        |           |  |  |           |  |  |                  |       |  |  |  |        | 





|(1) | These projected amounts include interest accrued during all the periods presented.
|--- | ----------------------------------------------------------------------------------



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|(2) | Estimated price of Ps.0.71 million per million cubic meters.
|--- | ------------------------------------------------------------

|(3) | Prices are generally determined by formulas based on future market prices. Estimated prices used to calculate the monetary equivalent of these purchase obligations for purposes of the table are based on current market
prices as of December 31, 2015 and may not reflect actual future prices. Accordingly, the peso amounts provided in this table with respect to these obligations are provided for illustrative purpose only.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | As set forth in our Audited Consolidated Financial statements included as of December 31, 2015.
|--- | -----------------------------------------------------------------------------------------------

Debt Obligations. A description of our contractual obligations with respect to our debt obligations is set forth under
Liquidity and Capital ResourcesDescription of Indebtedness.

Investment Commitments. The Company and PELSA
have assumed investment commitments in connection whit their interest in exploration and production areas. A further description of our investments commitments is disclosed in Note 29 to our Audited Consolidated Financial Statements.

Long-Term Service Agreement. We have entered into a long-term service agreement with different service providers in the ordinary course
of our business. The aforementioned contracts provide for the supply of services such as the maintenance and repair of Genelba, transportation between facilities and technical support.

Petroleum services and materials. We have entered into several agreements with different oil and gas petroleum service providers in
order to ensure the regular supply of services and materials in countries where we conduct oil and gas activities. The aforementioned contracts provide for the supply of services such as pulling, work-over, perforation works, the provision of
materials and others.

Transportation capacity. We have entered into firm gas transportation agreements with Metrogas and TGS to
provide gas transportation services to our thermal power plant, Genelba. These contracts include firm commitments, which require us to meet our contractual obligations for the entire volume hired, even if no gas is transported. The contract with
Metrogas expires in 2019 and the contract with TGS expires in 2032.

Gas Purchase Agreement for Genelba. Complementing the gas
transportation agreements mentioned above, we have entered into natural gas supply agreements with TGS. Under these agreements, TGS has committed to supply Genelba Plus and Genelbas natural gas requirements in the event that such supply is not
met internally to ensure that both thermal power plants are able to meet their own contractual energy delivery commitments.

Crude Oil
Transportation Agreement with OCP. We are party to an agreement with OCP related to oil transportation capacity of 80,000 barrels per day for a 15-year term starting November 10, 2003. This is a Ship or Pay transportation
agreement. Therefore, we must comply with our contractual obligations for the aggregate committed capacity, regardless of the amount of crude oil actually transported, and pay, like the other producers, a rate that covers OCP operating costs and
financial services, among others. As of December 31, 2015, related current and non-current liabilities relating to the outstanding Ship or Pay contract amount to Ps.299 million and Ps.88 million, respectively.

Pension Plans.A description of our contractual obligations with respect to our pension plans is disclosed in Note 23 to our Audited
Consolidated Financial Statements.

Natural Gas Sales. These agreements correspond primarily to long-term sales commitments in
order to ensure the sale of natural gas in Argentina.

Transportation capacity. We have entered into an agreement with R.G.
Albanesi S.A. to provide gas transportation services. This contract extends to 2019.

LPG and Electric Power Sales. These
agreements correspond primarily to sale commitments in order to ensure the sale of LPG and electric power in Argentina.

Gasolines.
We have entered into agreements with Oil Combustibles that extend until 2026 in order to ensure the supply of virgin naptha to our Refining and Distribution business segment. These contracts require us to purchase virgin naptha from Oil Combustibles
for our Refining and Distribution business segment and for us to sell intermediate gasoline to them.

Diesel. We have entered into
volume contracts with Minera Alumbrera Limited in order to ensure the sale of diesel. This contract extends to July 2016.



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|Item 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------- | ------------------------------------------

DIRECTORS AND
SENIOR MANAGEMENT

Board of Directors

In accordance with the bylaws of PESA, the Board of Directors is required to meet at least once every three months, and is composed of nine
regular members who are elected for a three-year term. One-third of PESAs directors are elected each year. The shareholders meeting may appoint a number of alternate members that may be equal to or lower than the number of regular
members to fill any vacancy, in the order of their appointment.

The table below sets forth the current composition of the Board of
Directors, as approved by PESAs general ordinary and special shareholders meeting held on April 28, 2016.



|                                   |  |                    |      |  |          |                    |             |  |      | 
|---------------------------------- |  | ------------------ | ---- |  | -------- | ------------------ | ----------- |  | ---- | 
|Name                               |  | Year ofAppointment |      |  | Position |                    | TermExpires | 
|André Lima Cordeiro                |  |                    | 2015 |  |          | Chairman           |             |  | 2018 | 
|Jorge José Nahas Neto              |  |                    | 2013 |  |          | Vice Chairman      |             |  | 2017 | 
|Guilherme Pontes Galvão França     |  |                    | 2015 |  |          | Director           |             |  | 2017 | 
|Carlos Alberto Pereira de Oliveira |  |                    | 2015 |  |          | Director           |             |  | 2017 | 
|Cedric Bridger                     |  |                    | 2004 |  |          | Director           |             |  | 2016 | 
|Roberto Luis Monti                 |  |                    | 2003 |  |          | Director           |             |  | 2016 | 
|Roberto Alejandro Fortunati        |  |                    | 2016 |  |          | Director           |             |  | 2016 | 
|Marcos Benício Pompa Antunes       |  |                    | 2015 |  |          | Director           |             |  | 2018 | 
|Maelcio Mauricio Soares            |  |                    | 2015 |  |          | Director           |             |  | 2018 | 
|José Jorge De Moraes Júnior        |  |                    | 2014 |  |          | Alternate Director |             |  | 2018 | 
|Gustavo Tardin Barbosa             |  |                    | 2011 |  |          | Alternate Director |             |  | 2017 | 
|Cláudio Rogério Linassi Mastella   |  |                    | 2015 |  |          | Alternate Director |             |  | 2017 | 
|Mauro Roberto da Costa Mendes      |  |                    | 2015 |  |          | Alternate Director |             |  | 2017 | 
|Gustavo Adolfo Amaral              |  |                    | 2015 |  |          | Alternate Director |             |  | 2018 | 
|Daniel Casal                       |  |                    | 2003 |  |          | Alternate Director |             |  | 2018 | 
|Alejandro Poletto                  |  |                    | 2008 |  |          | Alternate Director |             |  | 2016 | 
|Santiago Luis Montezanti           |  |                    | 2016 |  |          | Alternate Director |             |  | 2016 | 

As approved by PESAs general ordinary and special shareholders meeting held on April 28,
2016, alternate directors will fill any vacancy in the following order: José Jorge De Moraes to Júnior to André Lima Cordeiro, Gustavo Tardin Barbosa to Jorge José Nahas Neto, Cláudio Rogerio Linassi Mastella to
Guilherme Pontes Galvão França, Mauro Roberto da Costa Mendes to Carlos Alberto Pereira de Oliveira, Gustavo Adolfo Amaral to Marcos Benício Pompa Antunes, Daniel Casal to Maelcio Mauricio Soares, Alejandro Poletto to Cedric
Bridger or Roberto Luis Monti, and Santiag Luis Montezanti to Roberto Alejandro Fortunati.

For the purpose of CNV Resolution
No. 622, Cedric Bridger, Roberto Luis Monti, Roberto Alejandro Fortunati, Alejandro Poletto and Santiago Luis Montezanti qualify as independent directors. CNV Resolution No. 622 provides that a member of a corporate body shall not be
considered independent if that member:



| | 1. | is also a member of management or an employee of shareholders who hold significant interests in the issuer, or of other entities in which these shareholders hold either directly or indirectly significant interests or
over which these shareholders exercise a significant influence,
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | is an employee of the issuer or has been an employee during the last three years,
| | -- | ---------------------------------------------------------------------------------



| | 3. | has professional relations or is part of a company or professional association that maintains professional relations with, or that receives remunerations or fees (other than directors fees) from, the issuer or
from its shareholders that hold either directly or indirectly significant interests in or exercise a significant influence over the issuer, or from which such shareholders hold either directly or indirectly significant interests or exercise a
significant influence,
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | is either directly or indirectly a holder of significant interests in the issuer or in an entity that has significant interests in or exercises a significant influence over the issuer,
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | sells or provides either directly or indirectly goods or services to the issuer or to shareholders that hold either directly or indirectly significant interests in or exercise a significant influence over the issuer and
receives compensation for such services that is substantially higher than that received as a director, or
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. | is married or is a family member, up to fourth degree by blood or up to second degree by affinity, to an individual who would not qualify as independent.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------



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Significant interests mean shareholdings that represent at least 15% of the capital
stock of the relevant entity, or a smaller percentage when the person has the right to elect one or more directors by class of shares or by having entered into agreements with other shareholders relating to the governance and the management of the
relevant entity or of its controlling shareholders.

The following is a brief summary of the principal business and academic experience of
each of our directors:

André Lima Cordeiro (56) has served as regular member and Chairman since 2016. He graduated with a
degree in Fortification and Construction Engineering in 1982 from the Instituto Militar de Ingenierĺa (Engineering Military Institute), specializing in Oil Engineering from the Universidad del Estado de Rio de Janeiro (UERJ) in
1990. He also obtained an Excutive MBA from the COPPEAD - Universidad Federal de Rĺo de Janeiro (UFRJ) in 1995. He joined Petrobras in 1983, where he served in several areas of the Company, including various management positions such as
Logistics and Investments of Natural Gas Executive Manager (2008/2012), Executive Manager for the Americas, Africa and Asia (2012-2013), Executive Manager in Centro de Pesquisas Leopoldo Américo Miguez de Mello (CENPES 2013-2016),
and as a member of the boards of directors of Petrobras Argentina S.A. (2009-2010), Petrobras Oil &Gas B.V (2012-2014), Petrobras América INC. and Drill Ship International B.V. (2013-2014), among others. He is currently Executive Manager in
Terras e Águas Someras (TAS) in Petrobras.

Jorge José Nahas Neto (56) has served as a member of and Vice Chairman
of the Board of Directors since 2013. He graduated in 1981 with a degree in Economy from the University Candido Mendes, specializing in Economy Engineering in 1993 from the same university. Since 1980, he has worked in different national and
multinational companies. He joined Petrobras in 1993, where he served in the financial and planning areas in Brazil and in the international area. He was the Finance Manager of Petrobras Internacional Braspetro B.V. and Finance and Administrative
Manager of Petrobras América Inc. in Houston, Texas. From 2004 to 2016, he served as Financial and Risk Management Executive Manager, and since 2008 as Petros Deliberative Counselor. He is currently Financial Director in TBG 
Transportadora Brasileira Gasoduto Bolivia  Brasil S.A.

Guilherme Pontes Galvão França (57)has served as
a member of the Board of Directors since 2015. He graduated with a degree in Chemical Engineering from the UFRJ in 1981, obtaining a specialization in Marketing from the COPPEAD in 1996 and a certification from the Senior Executive  Executive
Managers Development Programme from the IBMEC in 2000. He joined Petrobras in 1982, where he was Chief of the Internal Market of Lubricants and Paraffins Section and Chief of the Internal Market of Gas, Propane, Asphalt and Solvents Section. He also
served in several management positions such as GLP Sales Manager, Oil and Industrial Materials Exports Sales Manager, and Maketing Manager. He currently works in the Sales and Logistics Area in Petrobras.

Carlos Alberto Pereira de Oliveira (58)has served as a member of the Board of Directors since 2015. He graduated with a degree in
Mechanical Engineering from Río de Janeiro ́s Engineering Institute and a degree in Management from UFRJ, both in 1980. He specialized in Oil Engineering in 1981, and obtained a Masters Degree in Finance from Rio de Janeiros
Catholic University in 1990. He joined Petrobras in 1981, where he served in several areas of the Company, including various management positions such as Reserves General Manager, Executive Director of Exploration and Production of PESA, CEO of
Petrobras Energía Perú S.A, Director of Technical Support for International Business Executive Manager, and as a member of the boards of directors of Petrolera Entre Lomas S.A, Petrobras Venezuela Investments y Services B.V. and PESA.
He is currently General Manager of Implementation of Production Projects at Petrobras Brasil. Since 2016 he is Executive Manager of Strategy and Organization in Petrobras.

Cedric Bridger (80) has served as a member of the Board of Directors since 2004, and is currently a member of the Audit Committee.
He graduated with a degree in Public Accounting in London from the Association of Certified and Corporate Accountants, where he initiated his professional activities. He joined FADIP S.A. (later Hughes Tool Co. S.A.) in Buenos Aires in 1964, where
he was Financial Manager. Subsequently, he became General Manager of the company in Brazil and was ultimately appointed its Vice President of Operations for Latin America. From 1992 to 1998, he was Chief Financial Officer of YPF. In April 1998, he
retired from YPF and took a position as Director of Banco Hipotecario S.A. and since 2003 he has been a member of the board of directors of IRSA Inversiones y Representaciones S.A.

Roberto Luis Monti (77) has served as a member of the Board of Directors since 2003, and is currently a member of the Audit
Committee and of the Compensation Committee. He graduated with a degree in Electromechanical Engineering. He received a Master of Electronic Engineering from the Universidad de Buenos Aires (UBA), and an MBA from the American Management
Association, New York. For 32 years he worked for Schlumberger, where he was Vice-Chairman of Wireline Operations, Chairman of Anadrill, Chairman of Wireline & Testing for Europe, Africa, Middle and Far East and Latin America, and Chairman
of Dowell at a worldwide level during the period from 1981 to 1995. From 1995 to 1997 he served as Chairman and CEO of Maxus Energy Corporation. From 1997 to 1999 he served as Chairman and CEO of YPF. In 2000, he served as Vice Chairman of
Exploration and Production and Vice Chairman of the board of directors of YPF. In addition, he currently serves as member of the board of directors of Tenaris S.A.



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Roberto Alejandro Fortunati (60)has served as a member of the Board of Directors
from 2006 to 2009 and since 2016. He is currently a member of the Audit Committee. He graduated in Law from the UBA Law School in 1979. From 1980 to 1986, he was in-house counsel to Amoco Argentina Oil Company. From 1986 to 2001, he was a partner at
Beccar Varela Law Firm. In 2001 and 2002, he served as Vice-Chairman and Director of Legal Affairs at the Argentine Branch of Citibank, N.A. In 2003, he was a founding partner of Fortunati & Asociados Law Firm, which merged with Beccar
Varela Law Firm in 2010, where he is currently a partner.

Marcos Benício Pompa Antunes(57) has served as a member of
the Board of Directors and as Chief Executive Officer since 2015. He graduated in Civil Engineering from the Pontificia Universidade Católica of Río de Janeiro in 1980. Later on, he obtained an MBA degree in Business Management in the
Federal University of Río De Janeiro. In 1981 he joined Petrobras where he gained wide technical and managerial experience and has since held several positions in Brazil and other countries, such as Manager of Gas and Energy Assets at
Petrobras Bolivia S.A., General Manager at Transierra S.A (Bolivia), Executive Director and Logistics at Nansei Sekiyu Kabushiki Kaisha (Japan) and General Manager of Design and Installation of Production Development Projects at Petrobras (Brazil),
a position he has held up to 2015.

Maelcio Mauricio Soares (55)has served as a member of the Board of Directors and as Chief
Financial Officer since 2015. Prior to 2015, he was responsible for the Pernambuco State Superintendency for Retail Banking and Government since September 2013. In 2012 and 2013 he was responsible for Maranhão State Superintendency for Retail
Banking and Government at Banco do Brasil and, previously, between 2008 and 2011, he served as General Manager of Banco do Brasil in the Republic of Argentina. He graduated as Mechanical Engineer from Fundación Técnico-Educacional
Souza Marques in 1984. He performed postgraduate studies in Corporate Finance at the Brazilian Institute of Capital Markets (1998) and obtained a Masters degree in Business Administration for Senior Executives from the Catholic University
of Río de Janeiro (2001).

The following is a brief summary of the principal business and academic experience of each of our
alternate directors:

José Jorge de Moraes Júnior(60) has served as an alternate member of the Board of
Directors since 2014. He graduated with a degree in Geology from São Paulo University in 1979 and obtained a Masters Degree in Sedimentology and Stratigraphy from Ouro Preto University in 1988. He joined Petrobras in 1980 where he has held
several managing positions such as Petrobras Colombia Exploration Manager, Exploration Activity Manager at Campos Basin, New Business General Manager Corporate E&P Executive Manager. He currently serves as International Corporate Executive
Manager.

Gustavo Tardin Barbosa (55) has served as an alternate member of the Board of Directors since 2011. He graduated
with a degree in Civil Engineering from Pontificia Universidade Católica do Rio de Janeiro in 1985. He also holds an MBA from Fundação Getulio Vargas (1992), post graduate studies in Corporate Finance from London Business School
(1996) and Advanced Management from Wharton School (2002). He joined Petrobras in 1986 where he has held several senior financial positions including Controller of Petrobras International (1993-1994), Chief Financial Officer of Petrobras UK
(1994-1999), Executive Manager of Financial Planning and Risk Management of Petrobras (1999-2003) and Chief Financial Officer of Petrobras America (2003-2011). In 2011, he was appointed by Petrobras to serve as Executive Manager of Corporate
Finance.

Cláudio Rogério Linassi Mastella (63)has served as an alternate member of the Board of Directors
since 2015. He graduated with a degree in Chemical Engineering from the Federal University of Rio Grande do Sul (UFRGS) and with a degree in Processing Engineering from the CENPRO in 1987. He joined Petrobras that same year, where he served in
several management positions in the Refining, Logistics, Sales and Provision sectors. In 2006, he completed a specialization in General Competences at Petrobras University. He currently serves as Provision and Logistics Executive Manager.

Mauro Roberto da Costa Mendez (53)has served as an alternate member of the Board of Directors since 2015. He graduated with a
degree in Civil Engineering from Pará Federal University, and obtained a Masters Degree in Production Engineering from the PUC-RJ. He joined Petrobras in 1987, where he developed several managing positions such as Production Manager of Urucu
(Amazonas), Treatment and Processing of Fluids Manager in the Rio Grande do Norte and Ceara Business Unit and General Manager of Cretarion and Implementation of Production Proyect Development in PRESAL  Santos Unit. He is currently the
Nort-Northeast Exploration and Production General Manager.



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Gustavo Adolfo Amaral (59) has served as an alternate member of the Board of
Directors and as Director of Exploration and Production. He graduated in Civil Engineering at the Military Institute of Engenharia de Rio de Janeiro in 1980. He joined Petrobras in 1981, where he held various positions, mainly in the international
area in exploration and production in Africa, Latin America, the Gulf of Mexico and the North Sea. He held various management positions at Petrobras Brazil and abroad, such as Business Manager, Planning and Strategy Exploration and Production PESA
and Director of Exploration and Production Company. Also, from late 2008 to 2013 he served as Vice-President of Exploration and Production of Petrobras America in Houston, Texas, USA.

Daniel Casal (60) has served as an alternate member of the Board of Directors and as Executive Director of Legal Affairs of PESA
since 2003. He graduated with a degree in Law from the Universidad Católica Argentina in 1980. He joined PESA in 1991. He also serves as member of the boards of directors of TGS, Compañía de Inversiones de Energía S.A.,
Petrobras Energía Colombia Ltd., Petrobras Energía Internacional S.A. and PELSA.

Alejandro Poletto (43)has
served as an alternate member of the Board of Directors since 2008. He graduated with a degree in Law from the Universidad Católica Argentina in 1998 and received a Master Degree in Law (LL.M.) from Cornell University Law School, Ithaca, New
York. He has previous experience as an associate lawyer for the law firms Marval, OFarrell & Mairal, and Cárdenas, Cassagne & Asociados in Buenos Aires. He also worked as a foreign associate at Skadden, Arps, Slate,
Meagher & Flom LLPs New York Office. He is a partner at Beccar Varela Law Firm.

Santiago Luis Montezanti
(40)has served as an alternate member of the Board of Directors from 2007 to 2008 and since 2016. He is currently a member of the Audit Committee. He graduated in Law cum laude from the UBA in 1999 and received a postgraduate degree in Tax
Law from the Universidad Católica Argentina in 2000. He also completed a specialized program in Tax Law at Universidad Austral in 2005. He served as senior attorney at Nicholson & Cano Abogados from 1999 to 2005. In 2005, he joined
Fortunati & Asociados Law Firm, which merged with Beccar Varela Law Firm in 2010, where he is currently a partner.

Administration and
Organization

PESAs operations are divided into four business segments that are in turn supported by corporate functions. The
four business segments are: Oil and Gas Exploration and Production; Refining and Distribution; Petrochemicals and Gas and Energy.

PESA is
managed by a committee made up of five members: the Chief Executive Officer, the Chief Financial Officer, the Director of Exploration and Production, the Downstream Director and the Corporate and Services Director. Operations are managed through
standardized processes that facilitate and secure coordination between the different units and groups. Delegation of authority is encouraged for the purpose of promoting efficiency. In addition, the scope of the delegation of authority is clearly
and expressly determined through systemized approval limits for risk minimization purposes. Our internal control system is supported by coordination among the areas responsible for managing businesses and administering them on a centralized basis,
always within the framework of the policies established by the executive committee. Operating and administrative processes are jointly supported by administrative procedures, highly reliable information systems, production of periodic management
control reports, performance appraisals and fluid communication.

Executive Officers

The table below sets out the names and positions of PESAs executive officers:



|                             |  |                                                        
|---------------------------- |  | -------------------------------------------------------
|Name                         |  | Position                                               
|Marcos Benício Pompa Antunes |  | Chief Executive Officer                                
|Maelcio Mauricio Soares      |  | Chief Financial Officer                                
|Gustavo Adolfo Amaral        |  | Director of Exploration and Production                 
|Adelson Antonio da Silva     |  | Corporative and Services Director                      
|Maucir de Almeida            |  | Downstream Director                                    
|Daniel Casal                 |  | Executive Manager of Legal Affairs                     
|Allan Leslie Blumenthal      |  | Executive Manager of Gas and Energy Segment            
|Alfredo Guía y Díaz          |  | Executive Manager of Strategy, Planning and Performance

The following is a brief summary of the principal business and academic experience of PESAs executive
directors and executive officers of the Company (for the summary regarding those who are directors, see above).

Maucir de Almeida
(61)serves as Downstream Director of PESA. He obtained a Senior Executive MBA from IBMEC (Instituto Brasilero de Mercado de Capitales) in 2001. He also holds an MBA in Supply from Fundação Dom Cabral in 2007 and received an
Advanced Program Management (APM) certfication from Amana-Key in 2014. He joined Petrobras 34 years ago and has held several positions, such as Product Engineering Manager Supply / Refining / GETEP from 1999-2000, Manager of New Processes and
Products Supply / Refining / TR from 2000-2002, Optimization Manager Supply / Refining / TR from 2002-2008, Manager of Refining and Petrochemical INTERTEC / Supply from 2008, 2012 and Refining General Manager, Midstream and Gas and Energy of
INTER-TEC from 2012-2014.



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Adelson Antonio da Silva (59)served as Executive Manager of Human Resources from
2010 to 2013, when he was appointed as Corporate and Services Director. He graduated as a Certified Public Accountant from Nilton Paiva Ferreira University, in Belo Horizonte, and as a Lawyer from Candido Mendes University, in Río de Janeiro.
He obtained a specialization degree in tax law from Sá University and holds an Executive/Marketing MBA degree from COPPEAD-UFRJ in Rio de Janeiro. He joined Petrobras over 30 years ago and held several positions, mainly in the Human
Resources, Accounting, Finance, Commercial and Business Development areas. He served as Executive Manager of Planning and Management Control at PESA and as Director of some companies related to the Company during 2003, 2004 and 2005. He served as
General Manager of Strategy, Planning, Portfolio Management and Project Management in the Internacional Area.

Alfredo Sergio
Guía y Díaz (59) has served as Executive Manager of Strategy, Planning and Performance since 2008. He graduated in Economic Sciences with a specialization in Business Administration at Universidad Nacional de La Plata. He
joined PESA in 1997, when he took responsibility for the Planning and Management Control Department of the Refining and Petrochemicals business segment and the Management Control Department of Oil and Gas Exploration and Production and Gas and
Energy segments. He has also has served as Performance Appraisal Manager for the Southern Cone region within Petrobras International Area from 2005 through 2007. He is also currently a member of the board of directors of Petrolera Entre Lomas
S.A. and of Petrobras Energía Internacional S.A.

Leslie Allan Blumenthal (47)has served as Executive Manager of Gas
and Energy since 2013. He graduated in Business Administration at the Universidad de Belgrano in 1997 and attended a Postgraduate course in Oil and Gas at the Instituto Teconológico Buenos Aires in 2001. Mr. Blumenthal joined PESA in
1993, where he has held several managing positions such as Logistic Manager, Sales of Oil and Gas Manager, Relations with the Government and Partners in E&P Manager and Commercialization of Natural Gas Manager. He is also the current chairman of
the board of directors of World Energy Business S.A. and of Enecor S.A and alternate director of the board of directors of TGS and of CIESA.

COMPENSATION

Compensation of the members of the Board of Directors is determined at the Ordinary Shareholders Meeting in compliance with the
Argentine Companies Law. The maximum amount of compensation that the members of the Board of Directors may receive, including salaries and any other form of compensation for the performance of technical, administrative, or permanent functions, may
not exceed 25% of our profits. Such amount is 5% in the event that no dividends are distributed to the shareholders and is increased pro rata on the basis of the dividend distribution, up to the 25% cap. In the event that one or more
directors serve as members of a special committee or perform technical or administrative functions, and profits are reduced or non-existent, and, consequently, the preset limits are exceeded, compensation in excess of the limit may only be paid with
the prior express approval by shareholders at an ordinary shareholders meeting.

In PESA, the compensation policy for executive
officers includes annual cash compensation and a benefits program. The annual cash compensation is determined based on the characteristics and responsibilities of the relevant position and the executive officers qualifications and experience
and benchmark information. Such compensation consists of a monthly fixed compensation and annual variable cash bonus dependent upon PESAs results of operations and the achievement of individual goals and objectives. Benefits granted to
executive officers are similar to those granted to employees generally, such as life insurance, a health care plan, meal allowances and a defined benefits pension plan, which are described in the Audited Consolidated Financial Statements.

No contracts for services were entered into between the directors and the Company or any of our subsidiaries that provide for benefits after
termination of their office, other than as provided by law.

In 2015, PESA paid an aggregate of approximately Ps.34 million to its
directors and executive officers. The members of the Board of Directors and our executives do not receive compensation in the form of stock or equity. For information related to amounts set aside for pension and retirement benefits, see Note 23 to
our Audited Consolidated Financial Statements.



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BOARD PRACTICES

Audit Committee

Pursuant to the Regime
concerning transparency in public offerings approved by Capital Market Law No. 26,831, Argentine public companies must have an audit committee composed of three or more members of the board of directors.

On May 21, 2003, the Board of Directors approved the implementation process required under CNV General Resolution No. 400/02 for
audit committees. In compliance with these resolutions, at the shareholders ordinary meeting held on March 19, 2004, PESA amended its bylaws by adding a provision related to the structure and operation of the Audit Committee.

On May 7, 2004, the Board of Directors created the Audit Committee and, in compliance with its duties, the Audit Committee approved its
charter. At the Board of Directors meeting held on April 28, 2016, Cedric Bridger, Roberto Luis Monti and Roberto Alejandro Fortunati continue as regular members of our Audit Committee, Alejandro Poletto and Santiago Luis Montezanti continue as
alternate members. Each of the members of the Audit Committee satisfies the independence requirements of Rule 10A-3 of the Exchange Act.

Audit Committee Terms of Reference

The purpose of the Audit Committee is to assist the Board of Directors in fulfilling its responsibilities relating to (1) the
companys financial statements, (2) compliance with applicable legal, regulatory and behavioral requirements, (3) qualification and independence of the independent external auditor that delivers an audit report on the companys
financial statements (the Independent Auditor), and (4) the conduct of the internal audit and the Independent Auditors performance.

The Audit Committee is composed of three regular members and an equal or lower number of alternate members that are appointed by the Board of
Directors from among its members. Directors having sufficient experience and ability in financial, accounting or business matters are eligible to become members of their Audit Committee. All members of the Audit Committee must be independent in
accordance with applicable SEC standards and a majority must be independent in accordance with the standards of the CNV. See Directors and Senior ManagementBoard of Directors. The audit committees may adopt its own internal
regulations.

Once every year our Audit Committee prepares a working plan with respect to its goals and work schedule for the fiscal year
to be reported to the Board of Directors. The remaining directors, members of the Statutory Supervisory Committee, managers and external auditors may, at the Audit Committees request, attend the Audit Committees meetings, assist the
Audit Committee and provide it with any information available to them. For a better performance of its duties, the Audit Committee may retain, on the Companys account, advisory services of counsel and other independent professionals. The Audit
Committee shall have access to the information and documentation deemed necessary for the fulfillment of its functions.

Our Audit
Committee has the following principal powers and responsibilities:



| | 1. | To supervise the performance of the internal control systems, the performance and reliability of the administrative and accounting system, the reliability of the financial statements and all the financial information
and the disclosure of relevant events.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | To establish and supervise the implementation of procedures for the reception, documentation and treatment of claims or reports on irregularities in connection with accounting, internal control or auditing matters, on a
confidential and anonymous basis.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | To issue founded opinions with respect to transactions with related parties as required by applicable law. To issue founded opinions whenever a conflict of interest exists or may arise for us and to communicate this
opinion to self-regulated entities as required by the CNV.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | To provide the market with complete information with respect to transactions where members of the corporate bodies and / or controlling shareholders of ours have conflicts of interests.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | To opine with respect to the reasonableness of the compensation and stock option plans proposed by the Board of Director at the shareholders meetings.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6. | To opine with respect to the compliance of legal requirements and on the reasonableness of proposals to issue shares or securities convertible into shares, in the case of capital increases that exclude or limit
preemptive rights.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7. | To issue at least once, at the time of submittal of the annual financial statements, a report on the treatment given during the year to the matters under its responsibility.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | To issue an opinion on the proposal submitted by the Board of Directors for the appointment (or revocation) of the independent auditor and communicate it to the shareholders meeting.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 9. | To evaluate the qualifications and independence of the independent auditors.
| | -- | ----------------------------------------------------------------------------



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| | 10. | To issue and maintain pre-approval procedures in connection with any service (whether audit-related or not) to be provided by the independent auditor, under which the Committee will be exclusively authorized to
pre-approve any service provided by the said Auditor.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 11. | To evaluate the quality of our accounting standards and the main changes to such accounting standards.
| | --- | ------------------------------------------------------------------------------------------------------

Compensation Committee

In order to
better supervise salary and compensation matters, the Board of Directors created a compensation committee at its October 6, 2006 meeting. The main purpose of this committee is to assure the compliance with, and revise whenever necessary,
policies relating to compensation that aim to provide the company with greater flexibility to make more effective decisions. The compensation committee meets monthly to approve matters relating to compensation policy, including compensation subject
to our and the employees performance. The compensation committee, composed of Directors Roberto Luis Monti, Luiz Gustavo Primo de Siqueira and Marcos Benício Pompa Antunes, must report to the Board of Directors at least semiannually.

Statutory Supervisory Committee

PESA has a Sindicatura(the Statutory Supervisory Committee) that is comprised of three members and three alternate members.

The table below sets out the name, year of appointment and position of each person on the PESA Statutory Supervisory Committee, approved
by the ordinary and special shareholders meeting held on April 28, 2016:



|                              |  |                          |      |  |          |           |             |  |      | 
|----------------------------- |  | ------------------------ | ---- |  | -------- | --------- | ----------- |  | ---- | 
|Name                          |  | First year ofappointment |      |  | Position |           | TermExpires | 
|Juan Carlos Cincotta          |  |                          | 2004 |  |          | Member    |             |  | 2016 | 
|Héctor Osvaldo Rossi Camilión |  |                          | 2016 |  |          | Member    |             |  | 2016 | 
|Justo Federico Norman         |  |                          | 2003 |  |          | Member    |             |  | 2016 | 
|Jorge Héctor Lorenzo          |  |                          | 2016 |  |          | Alternate |             |  | 2016 | 
|María Laura Maciel            |  |                          | 2004 |  |          | Alternate |             |  | 2016 | 

The members and alternate members of the Statutory Supervisory Committee are elected by the shareholders at
the annual shareholders meeting to serve for a renewable term of one year. The ordinary and special shareholders meeting held on April 28, 2016 appointed three members and two alternate members of the Statutory Supervisory Committee, and
decided a recess until May 27, 2016 to appoint a third alternate member, within the legal term. The primary responsibilities of the Statutory Supervisory Committee are to monitor the board of directors and managements compliance with the
Argentine Companies Law, our bylaws and shareholders resolutions. The Statutory Supervisory Committee also performs other functions, including: (1) attending meetings of the Board of Directors and shareholders, (2) calling special
shareholders meetings when deemed necessary or when required by shareholders, in accordance with the Argentine Companies Law, (3) presenting a report on the reports of the Board of Directors and the annual financial statements at ordinary
shareholders meetings, and (4) investigating written complaints of shareholders representing not less than 2% of the capital stock. The Statutory Supervisory Committee may not engage in any management control and, accordingly, may not
evaluate business judgment and decisions on issues of administration, financing, sales and production, as these issues fall within the exclusive responsibility of the Board of Directors.

The following is a brief summary of the principal business and academic experience of the members of the Statutory Supervisory Committee
listed in the table above:

Juan Carlos Cincotta (72) graduated in public accounting from UBA. He is currently head of
Cincotta Asesores, Auditores y Consultores, and formerly a partner at Pistrelli, Henry Martin y Asociados (Ernst & Young). He specializes in external audits of major public and private entities, and consulting in accounting, social and
corporate governance issues. He was a member of the Special Commission on Accounting and Auditing Regulations (CENCyA) of the Argentine Federation of Professional Councils in Economic Science and of the Nominating Committee of the International
Federation of Accountants (IFAC). He lectures on topics within his special field of work in specialized entities in Argentina and abroad. He published several works on accounting, corporate and audit matters in different technical
magazines and co-authored of the Treaty of Auditors Responsibility, Thomson Reuters-La ley Editorial, Buenos Aires, 2014.



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Héctor Osvaldo Rossi Camilión (67) earned his law degree from the
Universidad Católica Argentina in 1972. He has general experience with focus in financial institutions and companies. He is a founding partner of Rossi Camilión & Asociados Law Firm in Buenos Aires. He is currently member of the
Statutory Supervisory Committee in companies such as Banco Patagonia S.A., Banco Itaú Argentina S.A., Itrust Servicios Inmobiliarios S.A.I.C., Itaú Valores S.A. y Lanxess S.A., and serves as member of the board of directors of OKI BR
Argentina S.A. He is member of the Committee of Argentinean Banking Lawyers and the Corporate Lawyers Committee. He lectures on topics within his special field of work in specialized entities in Argentina and abroad.

Justo Federico Norman (71) earned his law degree from the Universidad Cátolica Argentina, and is a partner of Maciel,
Norman & Asociados Law Firm in Buenos Aires. He has extensive experience in the general practice of law and in the fields of energy, natural resources, oil and gas regulations and environmental issues, and is renowned in the litigation and
international arbitration fields. He is a member of the Association of International Petroleum Negotiators where he has served as Regional Secretary (2001-2004), the International Bar Association, and Rocky Mountain Mineral Law Foundation. He has
represented and currently represents companies such as Anadarko Petroleum Corporation, ANR Pipeline Company (Coastal), Apache Corporation, BHP Petroleum (Americas) Inc., British Gas, Devon Energy Corporation, Parker Drilling, and Petroliam National
Berhad (Petronas). He is a Regular Director of Petronas Argentina S.A. and Apache Petrolera Argentina S.A., among others.

Jorge
Héctor Lorenzo(69) earned his law degree from the Universidad Católica Argentina. He is currently partner of Rossi Camilión & Asociados Law Firm in Buenos Aires. He worked as Director and Examiner in
Petroquímica General Mosconi. He also served in several government offices such as Under Secretary of State at the Argentinian Secretary of Security and Superintendent of Labour Risk at the Argentinian Ministry of Labour. He is currently
member of the Statutory Supervisory Committee in companies such as Banco Itaú Argentina S.A., Banco Patagonia S.A., Baumgarten Gráfica Argentina S.A., Itrust Servicios Inmobiliarios S.A.I.C., Itaú Valores S.A., Gpat
Compañía Financiera S.A., Oki Br Argentina S.A.

María Laura Maciel (53) earned her law degree from the
Universidad Católica Argentina. She is currently an associate with Maciel, Norman & Asociados in Buenos Aires, specializing in the general aviation law, and aircraft leasing and financing contracts, air transport, regulatory issues,
air freight, and cargo matters in particular. She completed postgraduate courses in private international law and in aviation law at American University in Washington D.C. (1986), and postgraduate courses with the International Association of Air
Transportation, Montreal, Canada (2004-2005).

Total compensation for the members of the Statutory Supervisory Committee of PESA in 2015
was Ps. 1.35 million.

EMPLOYEES

The following table sets forth the number of PESA employees by business segment for the fiscal years ended December 31, 2015, 2014 and
2013.



|                                       |  |                    |       |  |      |  |       |      |  |  |       | 
|-------------------------------------- |  | ------------------ | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                       |  | As of December 31, |      
|                                       |  | 2015               |       |  | 2014 |  |       | 2013 | 
|Oil and Gas Exploration and Production |  |                    | 281   |  |      |  | 394   |      |  |  | 492   | 
|Refining and Distribution              |  |                    | 1154  |  |      |  | 1,193 |      |  |  | 1,217 | 
|Petrochemicals                         |  |                    | 712   |  |      |  | 645   |      |  |  | 642   | 
|Gas and Energy                         |  |                    | 107   |  |      |  | 100   |      |  |  | 21    | 
|Corporate                              |  |                    | 537   |  |      |  | 540   |      |  |  | 555   | 
|                                       |  |                    |       |  |      |  |       |      |  |  |       | 
|Total                                  |  |                    | 2,791 |  |      |  | 2,872 |      |  |  | 2,927 | 
|                                       |  |                    |       |  |      |  |       |      |  |  |       | 

As of December 31, 2015, approximately 52% of our workforce consisted of members of labor unions that had
entered into collective bargaining agreements with the Company and our subsidiaries. We have historically maintained good relations with our employees and labor unions. Between March and June 2013 we experienced trade union conflicts at the
Zárate Plant. During 2015 trade union conflicts did not significantly affect our operations and were mostly related to industry-wide actions. During 2013, 2014 and 2015, we conducted different negotiations with unionized employees engaged in
upstream and downstream operations in Argentina. See Item 3. Key InformationRisk FactorsFactors Relating to Our BusinessWe could be subject to organized labor action.

Argentine labor law currently obligates private sector businesses to maintain certain wage levels and provide certain benefits to their
employees. We cannot assure that the Argentine government will not in the future adopt measures requiring employers to offer increased wages or benefits, or that the employees of contractors we employ and/or unions to which they belong will not
directly solicit such increases from us.



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PESA maintains an employee defined contribution plan, two defined benefit plans and other
employment benefit obligations. See Note 23 to our Audited Consolidated Financial Statements.

SHARE OWNERSHIP

To our knowledge, none of our directors or members of our senior management owns more than 1% of PESAs outstanding shares.



|Item 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|------- | -------------------------------------------------

MAJOR
SHAREHOLDERS

Our share capital consists of 2,019,236,820 Class B shares, which have a nominal value of Ps.1.00, and are each entitled
to one vote per share.

Petrobras, through its subsidiary PPSL, holds 67.2% of the outstanding shares of PESA.

The table below sets forth certain information as of March 31, 2016 with respect to the ownership of PESAs capital stock by each
shareholder who is known to us to be the owner of more than 5% of such shares.



|            |  |                                     |               |  |                                  |  |      |     
|----------- |  | ----------------------------------- | ------------- |  | -------------------------------- |  | ---- | ----
|            |  | Class B Shares as of March 31, 2016 |              
|Shareholder |  | Number of Shares                    |               |  | % of the TotalOutstanding Shares | 
|PPSL        |  |                                     | 1,356,791,556 |  |                                  |  | 67.2 | %   
|ANSES       |  |                                     | 239,277,004   |  |                                  |  | 11.8 | %(1)



|(1) | Corresponds to holdings identified in information provided by Caja de Valores as of March 31, 2016. With respect to possible holdings in the form of ADSs on the NYSE, such information is not available.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

On November 20, 2008, the Argentine Congress enacted Law No. 26,425, unifying the Argentine pension and
retirement system into a system publicly administered by the ANSES and eliminating the retirement savings system previously administered by private pension funds under the supervision of a governmental agency. In accordance with the new law, private
pension funds transferred all of the assets administered by them under the retirement savings system to the ANSES. As of October 31, 2008, these funds held 13% of the outstanding shares of one of our predecessor companies, PEPSA. Based on Law
No. 26,425, the ANSES was subject to the same investment rules, prohibitions and restrictions that were applicable to the Argentine private pension funds under the retirement savings system, including Sections 75 and 76 of Law
No. 24,241, which limited the voting rights of private pension funds in shareholders meetings to 5% of the relevant companys shares. On April 13, 2011, paragraph f) of Section 76 of Law No. 24,421 was repealed by
Decree No. 441/11, which provides that the ANSES may fully exercise its voting rights in the companies in which it has an interest without the 5% limitation described above. Under such decree, the ANSES may be able to appoint representatives to
the boards of directors of companies according to the ANSES holding of shares. Pursuant to Decree No. 1,278/12, issued by the Executive Branch on July 25, 2012, these representatives are to report directly to the Ministry of Economy
and are subject to a mandatory information-sharing regime, under which, among other obligations, they must immediately inform the Ministry of Economy of the agenda for each board of directors meeting and provide related documentation. On
October 5, 2015, Law No. 27,181, declared of public interest the protection of the Argentine governments shareholdings that are part of, among others, the investment portfolio of the Sustainability Guarantee Fund (Fondo de
Garantía de Sustentabilidad) of the Argentine Integrated Social Security System (Sistema Integrado Previsional Argentino). To such effect, the Argentine Agency of Government Investments in Companies was created as the enforcement
authority. According to the provisions of such law, the transfer of the Companys shares held by the Sustainability Guarantee Fund of the Argentine Integrated Social Security System is subject to prior authorization by the Argentine Congress.

As of April 15, 2016, there were 19 registered holders of our ADSs in the United States and 29,133,447 of our ADSs were outstanding.
Since certain of our ADSs are held by brokers or other nominees, the number of direct record holders in the United States may not be fully indicative of the number of direct beneficial owners in the United States of our ADSs, or of where the direct
beneficial owners of such ADSs are resident. We have no information concerning holders with registered addresses in the United States that hold our shares which are not represented by ADSs.



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RELATED PARTY TRANSACTIONS

Acquisition of companies

On May 31,
2012, we agreed to acquire an additional 39.671% equity interest in PELSA from our shared controlling company PPSL for an amount of U.S.$249.4 million. As from such date, we have exercised control over PELSA with a total shareholding of 58.881%.

The price agreed between the parties further included a contingent obligation in favor of the seller for a period of ten years from the
acquisition to reflect the value of any identification of non-conventional resources in the commercially exploitable areas of Entre Lomas, Bajada del Palo, Agua Amarga and Charco del Palenque. The amount of such compensation would be determined
considering the market value of those resources to the valuation date, and the related valuation study would be conducted by an internationally recognized independent evaluator hired by agreement between the parties. At the date of this Annual
Report, non-conventional commercially exploitable resources have not been identified, for which reason the Company has not recognized liabilities related to this part of the transaction.

Sales of companies

On March 31,
2011, through our subsidiary Petrobras Energía Internacional S.A., we agreed to sell our indirect interest in Innova to Petrobras for a total price of U.S.$332 million, which sale implied the discontinuation of our operations in Brazil and
resulted in a gain of Ps.723 million before considering the effects of income taxes and the reclassification of deferred results of Ps.134 million for IFRS purposes. In April 2011, we received U.S.$228 million of the sale price, and in
October 2013, the remaining U.S.$104 million.

Financing

We have entered into a number of financing arrangements with subsidiaries of Petrobras, as detailed below. In 2007, we issued U.S.$300 million
principal amount of Series S corporate bonds, secured by a Standby Purchase Agreement provided by Petrobras. This bond matures in May 2017 and accrues interest at a 5.87% annual rate. See Item 5. Operating and Financial Review and
ProspectsDescription of Indebtedness.

Commercial operations

In the ordinary course of business, we carry out commercial transactions, purchase and sale of crude oil and oil related products with PELSA,
Refinor and EG3 Red, and transportation of oil and gas operations with Oldelval and TGS. In addition, we enter into crude oil and oil related products import and export transactions with certain subsidiaries of Petrobras, particularly with Brasken
S.A. and Petrobras Global Trading BV, and have entered into contracts to receive technical, administrative and technological assistance from Petrobras (including an administrative infrastructure cost sharing agreement) and Petrobras Venezuela
Inversiones y Servicios. We have entered into an oil transport capacity agreement with OCP (see Note 30 to our Audited Consolidated Financial Statements).

The outstanding balances from our transactions with related companies (including companies under joint control) as of December 31, 2015,
2014 and 2013 are as follows (in millions of pesos):



|                             |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 
|---------------------------- |  | ---------------- | -- |  | ---------------- |  | --- | --------------- |  |  | ---------- |  |  | ---------- | --- |  |  |  | -- | 
|                             |  | 2015             |   
|                             |  | Current          |    |  | Non-current      | 
|Company                      |  | TradeReceivables |    |  | OtherReceivables |  |     | AccountsPayable |  |  | Provisions |  |  | Provisions |    
|Associates                   |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 
|OCP                          |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |            | 299 |  |  |  | 88 | 
|Refinor                      |  |                  | 10 |  |                  |  |    |                 |  |  | 16         |  |  |            |    |  |  |  |   | 
|Other                        |  |                  |   |  |                  |  | 125 |                 |  |  | 14         |  |  |            | 3   |  |  |  |   | 
|                             |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 
|                             |  |                  | 10 |  |                  |  | 125 |                 |  |  | 30         |  |  |            | 302 |  |  |  | 88 | 
|                             |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 
|Entities under joint control |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 
|TGS                          |  |                  | 5  |  |                  |  | 31  |                 |  |  | 33         |  |  |            | 17  |  |  |  |   | 
|                             |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 
|                             |  |                  | 5  |  |                  |  | 31  |                 |  |  | 33         |  |  |            | 17  |  |  |  |   | 
|                             |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 



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|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 
|------------------------------------------------ |  | ---------------- | -- |  | ---------------- |  | --- | --------------- |  |  | ---------- |  |  | ---------- | --- |  |  |  | -- | 
|                                                 |  | 2015             |   
|                                                 |  | Current          |    |  | Non-current      | 
|Company                                          |  | TradeReceivables |    |  | OtherReceivables |  |     | AccountsPayable |  |  | Provisions |  |  | Provisions |    
|Petroleo Brasileiro Group Companies              |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 
|Braskem S.A.                                     |  |                  |   |  |                  |  |    |                 |  |  | 17         |  |  |            |    |  |  |  |   | 
|Petrobras Internacional - Braspetro B.V.         |  |                  |   |  |                  |  | 366 |                 |  |  |           |  |  |            |    |  |  |  |   | 
|Petrobras Venezuela Inversiones y Servicios S.A. |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |            | 62  |  |  |  |   | 
|Petrobras Global Trading B.V.                    |  |                  | 1  |  |                  |  | 1   |                 |  |  | 1          |  |  |            |    |  |  |  |   | 
|Petroleo Brasileiro                              |  |                  |   |  |                  |  | 6   |                 |  |  | 253        |  |  |            | 220 |  |  |  |   | 
|Petrobras Colombia Combustible                   |  |                  |   |  |                  |  | 34  |                 |  |  |           |  |  |            |    |  |  |  |   | 
|Other                                            |  |                  | 6  |  |                  |  | 58  |                 |  |  | 5          |  |  |            |    |  |  |  |   | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 
|                                                 |  |                  | 7  |  |                  |  | 465 |                 |  |  | 276        |  |  |            | 282 |  |  |  |   | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 
|Total                                            |  |                  | 22 |  |                  |  | 621 |                 |  |  | 339        |  |  |            | 601 |  |  |  | 88 | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    | 



|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 
|------------------------------------------------ |  | ---------------- | -- |  | ---------------- |  | --- | --------------- |  |  | ---------- |  |  | ---------- | --- |  |  |  | --- | 
|                                                 |  | 2014             |   
|                                                 |  | Current          |    |  | Non-current      | 
|Company                                          |  | TradeReceivables |    |  | OtherReceivables |  |     | AccountsPayable |  |  | Provisions |  |  | Provisions |    
|Associates                                       |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 
|OCP                                              |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |            | 130 |  |  |  | 299 | 
|Refinor                                          |  |                  | 13 |  |                  |  | 10  |                 |  |  | 8          |  |  |            |    |  |  |  |    | 
|Other                                            |  |                  |   |  |                  |  | 84  |                 |  |  | 7          |  |  |            | 2   |  |  |  |    | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 
|                                                 |  |                  | 13 |  |                  |  | 94  |                 |  |  | 15         |  |  |            | 132 |  |  |  | 299 | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 
|Entities under joint control                     |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 
|TGS                                              |  |                  | 39 |  |                  |  |    |                 |  |  | 22         |  |  |            |    |  |  |  |    | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 
|                                                 |  |                  | 39 |  |                  |  |    |                 |  |  | 22         |  |  |            |    |  |  |  |    | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 
|Petroleo Brasileiro Group Companies              |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 
|Petrobras Internacional - Braspetro B.V.         |  |                  |   |  |                  |  | 240 |                 |  |  |           |  |  |            |    |  |  |  |    | 
|Petrobras Venezuela Inversiones y Servicios S.A. |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |            | 36  |  |  |  |    | 
|Petrobras Global Trading B.V.                    |  |                  | 8  |  |                  |  |    |                 |  |  |           |  |  |            |    |  |  |  |    | 
|Petroleo Brasileiro                              |  |                  | 4  |  |                  |  | 15  |                 |  |  | 162        |  |  |            | 12  |  |  |  |    | 
|Other                                            |  |                  | 3  |  |                  |  | 91  |                 |  |  | 8          |  |  |            | 7   |  |  |  |    | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 
|                                                 |  |                  | 15 |  |                  |  | 346 |                 |  |  | 170        |  |  |            | 55  |  |  |  |    | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 
|Total                                            |  |                  | 67 |  |                  |  | 440 |                 |  |  | 207        |  |  |            | 187 |  |  |  | 299 | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |     | 



|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|------------------------------------------------ |  | ---------------- | -- |  | ---------------- |  | --- | --------------- |  |  | ---------- |  |  | ---------------- | --- |  | ---------- |  | --- |  |  |  | --- | 
|                                                 |  | 2013             |   
|                                                 |  | Current          |    |  | Non-current      | 
|Company                                          |  | TradeReceivables |    |  | OtherReceivables |  |     | AccountsPayable |  |  | Provisions |  |  | OtherInvestments |     |  | Provisions | 
|Associates                                       |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     | 
|OCP                                              |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |                  | 92  |  |            |  | 127 |  |  |  | 288 | 
|Refinor                                          |  |                  | 4  |  |                  |  | 13  |                 |  |  | 7          |  |  |                  |    |  |            |  |    |  |  |  |    | 
|Other                                            |  |                  | 6  |  |                  |  | 109 |                 |  |  | 6          |  |  |                  | 7   |  |            |  | 1   |  |  |  |    | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|                                                 |  |                  | 10 |  |                  |  | 122 |                 |  |  | 13         |  |  |                  | 99  |  |            |  | 128 |  |  |  | 288 | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Entities under joint control                     |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     | 
|TGS                                              |  |                  | 21 |  |                  |  | 8   |                 |  |  | 12         |  |  |                  |    |  |            |  |    |  |  |  |    | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|                                                 |  |                  | 21 |  |                  |  | 8   |                 |  |  | 12         |  |  |                  |    |  |            |  |    |  |  |  |    | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Petroleo Brasileiro Group Companies              |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     | 
|Braskem S.A.                                     |  |                  |   |  |                  |  |    |                 |  |  | 60         |  |  |                  |    |  |            |  |    |  |  |  |    | 
|Petrobras Internacional - Braspetro B.V.         |  |                  |   |  |                  |  | 237 |                 |  |  |           |  |  |                  |    |  |            |  |    |  |  |  |    | 
|Petrobras Venezuela Inversiones y Servicios S.A. |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |                  | 16  |  |            |  |    |  |  |  |    | 
|Petroleo Brasileiro                              |  |                  | 1  |  |                  |  | 3   |                 |  |  | 144        |  |  |                  |    |  |            |  |    |  |  |  |    | 
|Other                                            |  |                  | 11 |  |                  |  | 39  |                 |  |  | 10         |  |  |                  |    |  |            |  |    |  |  |  |    | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|                                                 |  |                  | 12 |  |                  |  | 279 |                 |  |  | 214        |  |  |                  | 16  |  |            |  |    |  |  |  |    | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Total                                            |  |                  | 43 |  |                  |  | 409 |                 |  |  | 239        |  |  |                  | 115 |  |            |  | 128 |  |  |  | 288 | 
|                                                 |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 



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The main transactions with related companies (including entities under joint control) for the
fiscal years ended December 31, 2015, 2014 and 2013 are as follows (in millions of pesos):



|                                                 |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|------------------------------------------------ |  | --------- | --- |  | ----- |  | --- | --------- |  |  | ----- |  |  | --------- | --- |  | ----- |  | --- |  |  |  | --- | 
|                                                 |  | 2015      |     |  | 2014  |  |     | 2013      | 
|Company                                          |  | Purchases |     |  | Sales |  |     | Purchases |  |  | Sales |  |  | Purchases |     |  | Sales | 
|Associates                                       |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|Oldelval                                         |  |           | 81  |  |       |  | 4   |           |  |  | 77    |  |  |           | 4   |  |       |  | 46  |  |  |  | 3   | 
|Refinor                                          |  |           | 166 |  |       |  | 84  |           |  |  | 151   |  |  |           | 67  |  |       |  | 86  |  |  |  | 42  | 
|                                                 |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|                                                 |  |           | 247 |  |       |  | 88  |           |  |  | 228   |  |  |           | 71  |  |       |  | 132 |  |  |  | 45  | 
|                                                 |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|Entities under joint control                     |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|TGS                                              |  |           | 127 |  |       |  | 161 |           |  |  | 88    |  |  |           | 221 |  |       |  | 68  |  |  |  | 202 | 
|                                                 |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|                                                 |  |           | 127 |  |       |  | 161 |           |  |  | 88    |  |  |           | 221 |  |       |  | 68  |  |  |  | 202 | 
|                                                 |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|Petroleo Brasileiro Group Companies              |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|Braskem S.A.                                     |  |           | 158 |  |       |  |    |           |  |  | 416   |  |  |           |    |  |       |  | 471 |  |  |  |    | 
|Petroleo Brasileiro                              |  |           | 69  |  |       |  | 5   |           |  |  | 40    |  |  |           | 5   |  |       |  | 122 |  |  |  | 17  | 
|Compañía Mega S.A.                               |  |           |    |  |       |  | 2   |           |  |  |      |  |  |           | 18  |  |       |  |    |  |  |  | 7   | 
|Petrobras Paraguay Operaciones y Logística S.R.L |  |           |    |  |       |  | 3   |           |  |  |      |  |  |           | 86  |  |       |  |    |  |  |  | 47  | 
|Petrobras Global Trading B.V.                    |  |           | 58  |  |       |  | 77  |           |  |  | 65    |  |  |           | 35  |  |       |  | 41  |  |  |  |    | 
|Petrobras Chile Distribución Limitada            |  |           |    |  |       |  | 75  |           |  |  |      |  |  |           | 77  |  |       |  |    |  |  |  | 27  | 
|Other                                            |  |           | 3   |  |       |  | 1   |           |  |  | 4     |  |  |           | 2   |  |       |  | 3   |  |  |  | 173 | 
|                                                 |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|                                                 |  |           | 288 |  |       |  | 163 |           |  |  | 525   |  |  |           | 223 |  |       |  | 637 |  |  |  | 271 | 
|                                                 |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|Total                                            |  |           | 662 |  |       |  | 412 |           |  |  | 841   |  |  |           | 515 |  |       |  | 837 |  |  |  | 518 | 
|                                                 |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 

We have not entered into any other material related party transactions.



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|Item 8. | FINANCIAL INFORMATION
|------- | ---------------------

CONSOLIDATED FINANCIAL STATEMENTS

See Item 18. Financial Statements.

LEGAL PROCEEDINGS

We are involved in various litigation and regulatory proceedings arising in the ordinary course of our business. We do not believe that any of
these proceedings is material to our operations or financial condition.

DIVIDENDS

We may only pay dividends from our retained earnings that are reflected in our annual audited consolidated financial statements as approved at
our respective annual general regular shareholders meetings. Payment of cash dividends depends upon our financial position, results of operations, cash requirements (including capital expenditures and payments of debt service), retained
earnings minimum requirements and other requirements imposed by Argentine law, and upon any other factors deemed relevant by our Board of Directors for the purpose of resolving upon the declaration of dividends.

While our Board of Directors may declare interim dividends pursuant to an audited interim-period financial statement, our Board of Directors
or our Statutory Audit Committee would be jointly and severally liable for any payments made in excess of retained earnings at fiscal year closing. The declaration, amount and payment of dividends to shareholders are subject to approval by a regular
shareholders meeting.

Under our bylaws, our net income shall be allocated as follows: (a) 5% to a legal reserve, until that
reserve equals 20% of outstanding capital; (b) to compensation of the members of the Board of Directors and Statutory Supervisory Committee; (c) to dividends on preferred stock, if any; and then (d) to dividends on common stock or to
a voluntary reserve, or to a new account, or as otherwise determined by the shareholders meeting. Dividends shall be paid within the year of their declaration and distributed pro rata to the number of common shares held by each shareholder.

Holders of ADSs will be entitled to receive any dividends payable in respect of our underlying Class B shares. We will pay cash dividends
to the depositary in pesos, although we reserve the right to pay cash dividends in any other currency, including U.S. dollars. The deposit agreement provides that the depositary will convert cash dividends received by the depositary in pesos into
U.S. dollars and, after a deduction or upon payment of fees and expenses of the depositary and any applicable taxes, will make payment to holders of the applicable ADSs in U.S. dollars.

Under Law No. 25,063, any dividends distributed, in cash or in kind, in excess of the taxable income accumulated as of the year-end
immediately prior to the respective payment or distribution date, will be subject to a 35% (thirty-five percent) income tax withholding, as a single and definitive payment. For this purpose, taxable income is deemed to be that resulting from adding
the income as determined under the general provisions of the income tax law and the dividends or income obtained from other corporations not taken into account in determining the former for the same tax period or periods.

Under the amendment introduced by Law No. 26,893 (regulated by Regulatory Decree No. 2,334/13), any dividend payments to our
Argentine individual shareholders and undivided estates as well to our foreign shareholders are subject to income tax at a 10% (ten percent) rate, as a one-time and definitive payment, without prejudice to the 35% (thirty-five percent) withholding
as may be applicable under Law No. 25,063. See Item 10. Additional InformationTaxationArgentine Taxes.

Pursuant to the resolutions adopted at the Board of Directors meetings held on July 30, 2015 and August 5, 2014 pursuant to
delegations effected at the shareholders meetings held on March 19, 2015 and March 27, 2014, we paid cash dividends in the amount of Ps.137 million and Ps.116 million, in 2015 and 2014, respectively.

PESAs shareholders meeting held on April 28, 2016: (a) approved (i) in accordance with legal requirements, an
increase of Ps.810 million in the reserve for future dividens and the transfer to the legal reserve of Ps.43 million based on our results in 2014, and (ii) the maintenance of the reserve for future investments (consisting of an
increase in the amount of Ps.5,474 million and a decrease in the amount of Ps.5,474 million);and (b) delegated with the Board of Directors the determination of the actual dividend distribution date and amount. As a result of the foregoing,
as of the date of this Annual Report, the reserve for future dividends amounts to Ps.1,969 million and the reserve for future investments amounts to Ps.5,730 million.



|Item 9. | OFFER AND LISTING
|------- | -----------------

Our ADSs, each representing ten Class B shares, are listed on the
NYSE under the trading symbol PZE. The ADSs began trading on the NYSE on September 30, 2009 following the completion of the merger and exchange of shares between PESA and PEPSA, and were issued by Citibank, N.A. as depositary.



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Our Class B shares have been listed on the Buenos Aires Stock Market since 1956. Currently the
trading symbol thereof is PESA.

The following table sets forth, for the periods indicated, the high and low closing sales
price of the ADSs on the NYSE and the Class B shares of PESA on the Buenos Aires Stock Market:



|               |  |             |       |     |                   |  |       |      |  |  |       |  |  |  |      | 
|-------------- |  | ----------- | ----- | --- | ----------------- |  | ----- | ---- |  |  | ----- |  |  |  | ---- | 
|               |  | ADS (1) (3) |       |     | Class B share (2) | 
|Full Year      |  | High        |       |     | Low               |  |       | High |  |  | Low   | 
|2009           |  |             | 19.40 | (3) |                   |  | 15.54 | (3)  |  |  | 7.55  |  |  |  | 5.20 | 
|2010           |  |             | 26.38 |     |                   |  | 12.91 |      |  |  | 10.65 |  |  |  | 5.20 | 
|2011           |  |             | 28.20 |     |                   |  | 12.16 |      |  |  | 11.35 |  |  |  | 5.78 | 
|2012 (4)       |  |             | 17.13 |     |                   |  | 3.89  |      |  |  | 7.90  |  |  |  | 2.51 | 
|2013           |  |             | 7.24  |     |                   |  | 3.47  |      |  |  | 6.39  |  |  |  | 2.79 | 
|2014           |  |             | 7.20  |     |                   |  | 4.34  |      |  |  | 9.93  |  |  |  | 4.77 | 
|2015           |  |             | 7.74  |     |                   |  | 4.44  |      |  |  | 9.55  |  |  |  | 5.24 | 
|2014:          |  |             |       |     |                   |  |       |      |  |  |       |  |  |  |      | 
|First Quarter  |  |             | 5.58  |     |                   |  | 4.34  |      |  |  | 5.50  |  |  |  | 4.77 | 
|Second Quarter |  |             | 6.83  |     |                   |  | 5.10  |      |  |  | 7.08  |  |  |  | 5.05 | 
|Third Quarter  |  |             | 7.20  |     |                   |  | 6.04  |      |  |  | 9.93  |  |  |  | 6.36 | 
|Fourth Quarter |  |             | 6.78  |     |                   |  | 4.55  |      |  |  | 9.10  |  |  |  | 5.10 | 
|2015:          |  |             |       |     |                   |  |       |      |  |  |       |  |  |  |      | 
|First Quarter  |  |             | 7.32  |     |                   |  | 4.44  |      |  |  | 8.62  |  |  |  | 5.24 | 
|Second Quarter |  |             | 7.74  |     |                   |  | 6.63  |      |  |  | 9.28  |  |  |  | 8.05 | 
|Third Quarter  |  |             | 7.23  |     |                   |  | 5.05  |      |  |  | 9.50  |  |  |  | 6.85 | 
|Fourth Quarter |  |             | 6.62  |     |                   |  | 4.80  |      |  |  | 9.55  |  |  |  | 6.60 | 
|November 2015  |  |             | 6.62  |     |                   |  | 5.84  |      |  |  | 9.55  |  |  |  | 8.33 | 
|December 2015  |  |             | 5.80  |     |                   |  | 5.12  |      |  |  | 8.62  |  |  |  | 7.35 | 
|2016:          |  |             |       |     |                   |  |       |      |  |  |       |  |  |  |      | 
|First Quarter  |  |             | 6.57  |     |                   |  | 5.37  |      |  |  | 10.15 |  |  |  | 7.09 | 
|January 2016   |  |             | 6.00  |     |                   |  | 5.37  |      |  |  | 8.60  |  |  |  | 7.09 | 
|February 2016  |  |             | 6.49  |     |                   |  | 5.76  |      |  |  | 10.00 |  |  |  | 8.35 | 
|March 2016     |  |             | 6.57  |     |                   |  | 6.21  |      |  |  | 10.15 |  |  |  | 9.00 | 
|April 2016 (5) |  |             | 6.58  |     |                   |  | 6.30  |      |  |  | 9.56  |  |  |  | 9.10 | 



|(1) | In U.S. dollars.
|--- | ----------------

|(2) | In Argentine pesos.
|--- | -------------------

|(3) | Since September 30, 2009.
|--- | -------------------------

|(4) | The price since September 2012 reflects the effects of a capital increase approved on March 29, 2012 by the shareholders of the Company and carried out starting September 26, 2012. This increase represented
the partial capitalization of retained earnings of the Company, and had the effect of doubling the number of our Class B shares outstanding.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) | Through April 15, 2016.
|--- | -----------------------

MARKETS

Buenos Aires Stock Market

The Buenos
Aires Stock Market, which is affiliated with the Buenos Aires Stock Exchange, is the largest stock market in Argentina. The Buenos Aires Stock Market is a corporation whose shareholder members are the only individuals and entities authorized to
trade in the securities listed on the Buenos Aires Stock Exchange. Trading on the Buenos Aires Stock Exchange floor is conducted by continuous open outcry and a computer-based trading system called SINAC from 11:00 a.m. to 5:00 p.m. each business
day. The Buenos Aires Stock Exchange also operates an electronic trading market system from 11:00 a.m. to 5:00 p.m. each business day.



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To control price volatility, the Buenos Aires Stock Market operates a system by which trading of
a security is suspended for 15 minutes whenever the price of such security changes 10% from its last closing price. Once the 15 minutes have elapsed, trading is resumed. From that point on during a trading day, trading will be suspended for ten
minutes whenever the trading price changes 5% from the last suspended price.

Capital Markets Law  Law No. 26,831

On December 28, 2012, the Capital Markets Law (Law No. 26,831) (the Capital Markets Law) was published in
the Official Gazette. This law eliminates self-regulation of the capital markets and grants powers to the CNV, to request reports and documents, to conduct investigations and inspections of natural and legal persons under its control, to call such
persons to testify and take informational and testimonial declarations, among others. Likewise, if as a result of investigations performed, it is determined that non-controlling interests or the interests of holders of securities subject to public
offering have been harmed, the CNV, according to the severity of the harm determined to have been caused, may appoint overseers with the power to veto resolutions adopted by the boards of directors and/or suspend the boards of directors of relevant
companies for a maximum period of 180 days until the deficiencies found are determined to have been remedied.

Certain information
regarding the Buenos Aires Stock Market is set forth in the table below:



|                                                    |  |      |        |   |      |  |        |      |  |  |        |   |  |      |       |   |  |  |        |  
|--------------------------------------------------- |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | - |  | ---- | ----- | - |  |  | ------ | -
|                                                    |  | 2015 |        |   | 2014 |  |        | 2013 |  |  | 2012   |   |  | 2011 |      
|Market capitalization (billions of pesos)           |  |      | 3,292  |   |      |  | 3,893  |      |  |  | 3,356  |   |  |      | 2,314 |   |  |  | 1,610  |  
|As a percentage of GDP(1)                           |  |      | 64,7   | % |      |  | 89     | %    |  |  | 99     | % |  |      | 84    | % |  |  | 70     | %
|Volume (in millions of pesos)                       |  |      | 47,655 |   |      |  | 39,813 |      |  |  | 18,945 |   |  |      | 9,954 |   |  |  | 13,579 |  
|Average daily trading volume (in millions of pesos) |  |      | 194.51 |   |      |  | 165.20 |      |  |  | 78.60  |   |  |      | 41.30 |   |  |  | 55.40  |  
|Number of listed companies(1)                       |  |      | 99     |   |      |  | 101    |      |  |  | 105    |   |  |      | 104   |   |  |  | 105    |  



|(1) | End-of-year figures for trading on the Buenos Aires Stock Exchange.
|--- | -------------------------------------------------------------------

Sources: The Bolsa de Comercio de Buenos
Aires, the CNV and the Instituto Argentino de Mercado de Capitales.



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|Item 10. | ADDITIONAL INFORMATION
|-------- | ----------------------

MEMORANDUM AND ARTICLES OF
ASSOCIATION

Registration and Merger

Our bylaws (estatutos sociales) were authorized by Decree No. 17105 dated June 18, 1947, and registered with the IGJ on
November 17, 1947 under No. 759, Page 569, Book 47, Volume A of Argentine Bylaws. Amendments to the bylaws were authorized as indicated below, and registered as amended with the Public Registry of Commerce as follows: (1) as amended
and authorized by Decree No. 29,460 dated September 24, 1948, and registered on May 27, 1949, under No. 369, Page 332, Book 48, Volume A, of Argentine Bylaws; (2) as amended and authorized by Decree No. 10,460 dated
June 24, 1954, and registered on October 4, 1954, under No. 1,323, Page 508, Book 49, Volume A, of Argentine Bylaws; (3) as amended and authorized by Decree No. 3,789 dated February 28, 1956, and registered on
September 5, 1956, under No. 1,686, Page 238, Book 50, Volume A, of Argentine Bylaws; (4) as amended and authorized by Decree No. 3,773 dated August 11, 1958, and registered on March 2, 1959, under No. 289, Page
391, Book 51, Volume A of Argentine Bylaws; (5) as amended and authorized by Decree No. 5,405 of the Argentine government dated June 12, 1962, and registered on September 28, 1962, under No. 2,161, Page 347, Book 55, Volume
A of Argentine Bylaws; (6) as amended and authorized by Resolution issued by PJ (Board of Legal Entities) No. 001129, Ministry of Education and Justice, dated June 19, 1963, and registered on September 24, 1963, under
No. 1,656, Page 109, Book 58, Volume A of Argentine Bylaws; (7) as amended and authorized by IGJ Resolution No. 6,307, Ministry of Justice, dated March 13, 1970, and registered on May 14, 1970, under No. 1,782, Page 56,
Book 72, Volume A of Argentine Stock Corporations Bylaws; (8) as amended and authorized by I.G.P.J. (Board of Legal Entities) Resolution No. 2,116, Superintendent of Legal Entities, dated April 29, 1971, and registered on July 7,
1971, under No. 2,286, Page 287, Book 74, Volume A of Argentine Stock Corporations Bylaws; (9) as amended and authorized by I.G.P.J. (Board of Legal Entities) Resolution No. 2,687, Superintendent of Legal Entities, dated
August 28, 1972, and registered on December 28, 1972, under No. 4,555, Page 479, Book 77, Volume A of Argentine Stock Corporations Bylaws; (10) as amended and registered on November 16, 1976, under No. 3,917, Book 84,
Volume A of Argentine Stock Corporations Bylaws; (11) as amended and registered on July 8, 1977, under No. 2,237, Book 87, Volume A of Argentine Stock Corporations Bylaws; (12) as amended and registered on December 21, 1978,
under No. 4,912, Book 88, Volume A of Argentine Stock Corporations Bylaws; (13) as amended and registered on December 6, 1979, under No. 4,401, Book 90, Volume A of Argentine Stock Corporations Bylaws; (14) as amended and
registered on March 25, 1981, under No. 1,105, Book 97, Volume A of Stock Corporations; (15) as amended and registered on February 21, 1983, under No. 545, Book 98, Volume A of Argentine Argentine Stock Corporations;
(16) as amended and registered on March 21, 1984, under No. 1,551, Book 99, Volume A of Argentine Stock Corporations; (17) as amended and registered on March 31, 1986, under No. 1,739, Book 101, Volume A of Argentine
Stock Corporations; (18) as amended and registered on January 22, 1992, under No. 372, Book 110, Volume A of Argentine Stock Corporations; (19) as amended and registered on October 3, 1995, under No. 9223, Book 117,
Volume A of Argentine Stock Corporations; (20) as amended registered on November 11, 1996, under No. 11,209, Book 120, Volume A of Argentine Stock Corporations; (21) as amended and registered on May 15, 1997, under
No. 4894, Book 121, Volume A of Argentine Stock Corporations; (22) as amended and registered on June 11, 1998 under No. 3812, Book 1, Volume of Corporations; (23) as amended and registered on July 14, 2000 under
No. 10116, Book 11, Volume of Corporations; (24) as amended and registered on October 26, 2000 under No. 16073, Book 13, Volume of Corporations; (25) as amended and registered on September 3, 2002, under No. 9737,
Book 18, Volume of Corporations; (26) as amended and registered on February 12, 2003, under No. 2042, Book 19, Volume of Corporations; (27) as amended and registered on July 4, 2003, under No. 9191, Book 22, Volume of
Corporations; (28) as amended and registered on August 22, 2003, under No. 11892, Book 22, Volume of Corporations; (29) as amended and registered on May 3, 2004, under No. 5377, Book 24, Volume of Corporations;
(30) as amended and registered on November 29, 2004 under No. 15158, Book 26, Volume of Corporations; (31) as amended and registered on June 30, 2005 under No. 7618, Book 28, Volume of Corporations; (32) as amended
and registered on January 26, 2009 under No. 1537, Book 43, Volume of Corporations; (33) as amended and registered on August 4, 2009 under No. 12887, Book 45, Volume of Corporations; (34) as adopted by the extraordinary
and regular shareholders meeting held on January 30, 2009, and to be registered in the Volume of Corporations; and (35) as adopted by the extraordinary and regular shareholders meeting held on March 27, 2009, and to be
registered in the Volume of Corporations.

Objects and Purposes

Section 3 of our bylaws states that the object and purposes of the company is to do and engage in the following:

(a) perform the following operations:



| | (1) | explore, exploit, prospect for, detect, bore and drill hydrocarbons and any other kind of wells, as well as carry out activities related to mining extraction in general;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | purchase, sell, lease and operate drilling equipment, its spare parts and accessories and enter into any contract, to perform any act and carry out any operation related to mining extraction;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | manufacture, process, industrialize, purchase, sell, import, export and transport its own or third parties hydrocarbons and their by-products, whether they be liquid, solid or gaseous; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| | (4) | enter into any kind of contracts for work and/or of service related to the aforementioned activities;
| | --- | -----------------------------------------------------------------------------------------------------

(b) commercial transactions through the import, export, purchase and sale, transportation and distribution of products and goods related to
electric power and mining, including the exercise or performance of representations, commissions, consignments and agencies;

(c) financial
transactions in general, including: loans and/or capital contributions to individuals or companies for present or future businesses; granting of bonds, guaranties and suretyships in favor of third parties; purchase and sale and management of shares,
public bonds, debentures and other securities, except for the transactions stipulated in the limitations provided for in the Financial Entities Law and those transactions requiring public bidding;

(d) real estate transactions through the acquisition, sale, barter, construction, fractionation, exploitation and lease of urban and rural real
estate, including cooperative property transactions and the creation of rightsin rem;

(e) operation of navigation and maritime
fluvial trade companies;

(f) power generation, transformation, transmission and distribution operations; and

(g) to render services or act as agent for itself or in favor of third parties.

In carrying out the aforementioned purposes and object, PESA has full capacity to perform any act, enter into any contract and carry out any
transaction directly or indirectly related thereto.

Provisions of the Bylaws Relating to Directors

Section 9 of the bylaws states that the Board of Directors shall hold a meeting with the majority of its members present at the meeting,
whether in person or remotely as long as they can each communicate among themselves through other means of simultaneous sound, image or word transmission, and shall adopt resolutions by the majority of the votes present thereat, including remote
participants. The Board of Directors meets formally at least once every three months, and is composed of nine members. All members of the Board of Directors have one vote for any matter decided upon. For more information on the election of
PESAs Board of Directors, see Item 6. Directors, Senior Management, and EmployeesDirectors and Senior ManagementPetrobras Argentina S.A. Board of Directors.

In accordance with our bylaws, in the event any members of the Board of Directors refrain from voting on account of having a conflict of
interest or material interest in the matter at hand, the Board of Directors shall adopt resolutions by a majority of the members who did not refrain from voting for such reason. Participation and vote of remote participants as well as all
transmission of data shall be registered in the minutes of the meetings. The Argentine Companies Law requires that directors refrain from voting on matters in which such director may have a conflict of interest.

Capital Stock

The
description that follows provides a summary of the material provisions of our capital stock, in accordance with our bylaws and Argentine law and regulations.

Voting Rights

Each PESA
Class B share entitles the holder to one vote.

All existing PESA Class A shares were converted into PESA Class B shares on
March 11, 2009. There are no PESA Class A shares currently outstanding.

Cumulative Voting

Under the Argentine Companies Law, a shareholder is entitled to cumulative voting procedures for the election of up to one-third of the
directors being elected. If any shareholder notifies us of its decision to exercise its cumulative voting rights no later than three business days prior to the date of a meeting, all shareholders are entitled, but not required, to exercise their
cumulative voting rights. Under cumulative voting, the aggregate number of votes that a shareholder may cast is multiplied by the number of vacancies to be filled in the election, and each shareholder may allocate the total number of its votes among
a number of candidates not to exceed one-third of the number of vacancies to be filled. Shareholders not exercising cumulative voting rights are entitled to cast the number of votes corresponding to their shares for each candidate. The
implementation of a staggered board does not impede or prohibit the exercise of cumulative voting in any manner.

Preemptive Rights

In the event of a capital increase, a holder of existing common shares of a given class has a preemptive right to subscribe for a
number of shares of the same class sufficient to maintain the holders existing proportionate holdings of shares of that class.



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Preemptive rights also apply to the issuance of certain convertible securities (obligaciones
negociables) but do not apply upon conversion of these securities. Holders of ADSs may be restricted in their ability to exercise preemptive rights if a prospectus under the Securities Act relating to those securities has not been filed or is
not effective or an exemption from registration is not available. You should note that we are not obligated to file a registration statement with respect to the shares relating to preemptive or accretion rights. Preemptive rights are exercisable
during the 30 days following the last publication of notice to the shareholders in the Official Gazette and an Argentine newspaper of wide circulation. Pursuant to the Argentine Companies Law, the 30-day period may be reduced to ten days by a
decision of our shareholders adopted at an extraordinary shareholders meeting. Preemptive rights may be suspended or limited in extraordinary circumstances with the favorable vote of more than 50% of all outstanding voting shares at an
extraordinary shareholders meeting at which all shares will be entitled to exercise one vote, regardless of whether there are shares with multiple votes where the purpose of the capital increases is to issue shares as consideration for a
contribution of assets to the company or to repay outstanding obligations.

Shareholders who have exercised their preemptive rights and
indicated their intention to exercise additional preemptive rights are entitled to accretion rights, pro rata to their respective subscriptions, with respect to any unsubscribed shares by other shareholders during the preemptive rights period, in
accordance with the terms of Article 194 et seq. of the Argentine Companies Law. Shares not subscribed by the shareholders by virtue of their exercise of preemptive rights or accretion rights may be offered to third parties.

Appraisal Rights

Whenever our shareholders approve (1) a spinoff or merger in which we are not the surviving corporation, (2) a change in our
corporate legal status, (3) a fundamental change in our corporate purpose, (4) a change of our domicile to a location outside Argentina, (5) a voluntary withdrawal from a public offering or delisting, (6) the continuation of our
company in the case of a mandatory delisting or cancellation of the authorization for a public offering, (7) a capital increase approved by an extraordinary shareholders meeting which would require a disbursement by shareholders or
(8) a total or partial recapitalization following a mandatory reduction of capital or liquidation, any shareholder that voted against this action may withdraw from our company and receive the book value of its shares, determined on the basis of
our latest balance sheet prepared or that should have been prepared in accordance with Argentine laws and regulations, provided that this shareholder exercises its appraisal rights within the period set forth below. However, because of the absence
of legal precedent directly on point, there is doubt as to whether holders of our ADSs will be able to exercise appraisal rights either directly or through the depositary with respect to Class B shares represented by our ADSs. Appraisal rights must
be exercised within five days following the adjournment of the meeting at which the resolution was adopted, in the event that the dissenting shareholder voted against such resolution, or within 15 days following such adjournment if the dissenting
shareholder did not attend such meeting and can prove that it was a shareholder on the date of such meeting. In the case of a merger or spinoff, appraisal rights may not be exercised if the shares to be received as a result of such transaction are
authorized for public offering or listed. Appraisal rights are extinguished if the resolution giving rise to such rights is revoked at another shareholders meeting held within 60 days of the meeting at which the resolution was adopted.

Payment on the appraisal rights must be made within one year of the date of the shareholders meeting at which the resolution was
adopted, except when the resolution was to delist our stock or to continue our company following our mandatory delisting, in which case the payment period is reduced to 60 days from the date of the related resolution.

Acquisition of Class B Shares by Class B Shareholders

Argentine law provides that if any person or group of persons acquires shares or securities convertible into shares representing at least three
percent of a public companys capital stock, then these persons must, within three days following the acquisition, give the company notice of the acquisition, irrespective of any additional notice requirements under applicable rules of any
stock exchange or regulatory agency. The notice must state the acquisition dates and prices, the voting power acquired, the purpose of the acquisition and the intention of the acquiror (including, without limitation, whether it intends to increase
its holding or to obtain control). This provision also applies to subsequent acquisitions involving a number of shares or securities convertible into shares representing at least three percent of the companys capital stock.

Capital Increases and Reductions

Our capital stock may be increased by resolution of an ordinary shareholders meeting. Capital increases do not require an amendment of
our bylaws, but must be approved by the CNV, published in the Official Gazette and registered with the Public Registry of Commerce. Capital reductions may be voluntary or mandatory. Voluntary reductions of capital must be approved by an
extraordinary shareholders meeting and may take place only after notice is published and creditors are given an opportunity to obtain payment or collateralization of their claims or attachment. Reductions of capital are mandatory when losses
have exceeded reserves or more than 50% of our stated capital.

Shares issued in connection with any increase in capital must be divided
among the various classes in proportion to the number of shares of each class outstanding at the date of the issuance, provided that the number of shares of each class actually issued may vary based on the exercise of preemptive rights and
additional preemptive rights in accordance with the procedure described in the preceding section.



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Redemption and Repurchase

Our shares are subject to redemption in connection with a reduction in capital by the vote of a majority of shareholders at an extraordinary
shareholders meeting. Any shares so redeemed must be cancelled by us.

We may repurchase fully paid shares of our capital stock with
retained earnings or freely available reserves, upon a determination of the Board of Directors that this repurchase is necessary in order to avoid a material adverse effect to us. The Board of Directors determination must be explained to
shareholders at the next annual shareholders meeting. We may also repurchase shares of our capital stock held by a company acquired by or merged with us. In either case, we are required to resell the shares purchased within one year and must
give shareholders a preemptive right to purchase these shares. Any shares repurchased by us will not be considered in the determination of a quorum or a majority.

Preferred Shares

We may
issue non-voting preferred shares or preferred shares with one vote per share. The economic preferences and rights of our preferred shares will be determined at the shareholders meeting authorizing the issue of the preferred shares. Non-voting
preferred shares may vote one vote per share in the following circumstances: (1) if we are in default with respect to the payment of preferred share dividends, (2) if the events described under Meetings of
ShareholdersQuorum and Voting Requirements occur, or (3) if the preferred shares have been listed on a stock exchange and that listing is cancelled or suspended.

Liquidation

The
liquidation of our Company may be carried out by our Board of Directors or by one or more liquidators appointed by the shareholders to wind up its affairs. In the event of liquidation, our assets will be applied to satisfy our debts and liabilities
including liquidation expenses. Any remaining amounts will be distributed as follows: (1) the amount of the preferred shares issued shall be reimbursed at their paid-in, nominal value; (2) the amount of common shares shall be reimbursed at
their paid-in, nominal value; (3) cumulative dividends in arrears on preferred shares shall be paid; and (4) the remaining balance shall be distributed pro rata among all holders of common shares.

Changes in Shareholder Rights

See Meetings of Shareholders below.

Audit Committee

The bylaws of PESA state that the Company shall have an audit committee composed of three regular directors and an equal or smaller number of
alternate members. For more details on our Audit Committee, see Item 6. Directors, Senior Management and EmployeesBoard PracticesAudit Committee.

Meetings of Shareholders

General

Shareholders meetings may be ordinary or extraordinary. We are required to hold an ordinary shareholders meeting within four months
of the close of each fiscal year to consider the approval of our annual financial statements, the allocation of net income for the fiscal year, the approval of the reports of the Board of Directors and the Statutory Supervisory Committee and the
election and remuneration of directors and members of the Statutory Supervisory Committee. Other matters that may be considered at an ordinary meeting include the responsibility of directors and members of the Statutory Supervisory Committee,
capital increases and the issuance of certain corporate bonds. Extraordinary shareholders meetings may be called at any time to consider matters outside the scope of authority of an ordinary meeting, including amendment of the bylaws, issuance
of debentures, early dissolution, merger, spinoff, reduction of capital stock and redemption of shares, changing our company from one type of legal entity to another and limitation of shareholders preemptive rights.

Notices

Notice of
shareholders meetings must be published for five days in the Boletín Oficial (the official gazette of the Republic of Argentina), in an Argentine newspaper of wide circulation and in the publications of Argentine exchanges or
securities markets in which our shares are traded, at least ten days prior to the date on which the meeting is to be held as per the Argentine Companies Law, and at least 20 days prior to the meeting as per CNV regulations. The notice must include
information regarding the type of meeting to be held, the date, time and place of the meeting and the agenda. If there is no quorum at the meeting, notice for a meeting on second call must be published for three days, at least eight days before the
date of the second meeting, and such second meeting must be held within 30 days of the date for which the first meeting was called. The first call and second call notices may be effected simultaneously in order for the meeting on second call to be
held on the same day as the meeting on first call, but only in the case of ordinary shareholders meetings. Shareholders meetings may be validly held without notice if all shares of our outstanding capital stock are present and
resolutions are adopted by unanimous vote.



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The Board of Directors will determine appropriate publications for notice outside Argentina in
accordance with requirements of jurisdictions and exchanges where our shares and ADSs are traded.

Quorum and Voting Requirements

The quorum for ordinary shareholders meetings on first call is a majority of the shares entitled to vote, and action may be
taken by the affirmative vote of an absolute majority of the shares present that are entitled to vote on such action. If a quorum is not available, a second call meeting may be held at which action may be taken by the holders of an absolute majority
of the shares present, regardless of the number of such shares. The quorum for extraordinary shareholders meetings on first call is 60% of the shares entitled to vote, and if such quorum is not available, a second call meeting may be held, for
which there is no quorum requirement.

Action may be taken at extraordinary shareholders meetings by the affirmative vote of an
absolute majority of shares present that are entitled to vote on such action, except that the approval of a majority of shares with voting rights is required in both first and second call for: (1) the transfer of our domicile outside Argentina,
(2) a fundamental change of the corporate object set forth in the bylaws, (3) our anticipated dissolution, (4) the total or partial repayment of capital, (5) a merger of our company, if we are not the surviving entity, (6) a
spinoff of our company, or (7) changing our corporate legal status.

Shareholders meetings may be called by the Board of
Directors or the members of the Statutory Supervisory Committee whenever required by law or whenever they deem it necessary. Also, the Board of Directors or the members of the Statutory Supervisory Committee are required to call shareholders
meetings upon the request of shareholders representing an aggregate of at least five percent of our outstanding capital stock. If the board or the Statutory Supervisory Committee fail to call a meeting following this request, a meeting may be
ordered by the CNV or by the courts. In order to attend a meeting, a shareholder must deposit with us a certificate of book-entry shares registered in its name and issued by Caja de Valores at least three business days prior to the date on which the
meeting is to be held. Shareholders may be represented by proxy. Proxies may not be granted to directors, members of the Statutory Supervisory Committee or officers or employees of our company.

Conflict of Interest

A
shareholder who votes on a matter involving our company in which its interest conflicts with ours may, under Argentine law, be liable for damages to us resulting from its decision, but only if the transaction would not have been approved without its
vote.

Limitations on Foreign Investment in Argentina

Under the Argentine Foreign Investment Law, as amended (the FIL), the purchase of stock by an individual or legal entity domiciled
abroad or by a local company of foreign capital (as defined in the FIL) constitutes a foreign investment subject to the FIL. Foreign investments are generally unrestricted. However, foreign investments in certain industries are restricted to a
certain percentage. No approval is necessary to purchase our Class B shares. The FIL does not limit the right of non-resident or foreign owners to hold or vote our Class B shares, and there are no restrictions in our bylaws limiting the rights of
non-residents or non-Argentines to hold or vote our Class B shares.

However, General Resolution No. 7 passed in September 2003 by
the IGJ and other related regulations set forth certain requirements for foreign entities registered with the IGJ. These regulations require, among other things, disclosure of information related to proprietary interests in assets located outside
Argentina to be at least equivalent in value to those located inside Argentina. The entities must comply with these requirements in order to (1) perform activities on a regular basis through their Argentine branches (Section 118, Argentine
Companies Law), or (2) exercise their ownership rights in Argentine Companies (Section 123, Argentine Companies Law). In cases where: (a) do not have assets outside Argentina; (b) the IGJ has concluded that the entities have
non-current assets that are not materially significant compared to those non-current assets which are owned by them and located in Argentina; or (c) the entitys address in Argentina becomes the place where this entity makes a majority of
its decisions, corporate or otherwise, the entities may be required to amend and register their bylaws to comply with Argentine law, thereby becoming an Argentine entity subject to Argentine law according to Section 124 of the Argentine
Companies Law. In addition, Argentine companies with shareholders consisting of such entities that fail to comply with these requirements may be subject to the following sanctions: (1) the IGJ may not register corporate decisions adopted by the
Argentine company when its offshore shareholder votes as a shareholder and when that vote is essential in attaining a majority and any decisions made pursuant to such vote related to the approval of its annual balance sheet may be declared null and
void for administrative purposes; (2) whether or not the vote of the offshore entity is necessary for purposes of determining quorum or majority, the IGJ may register the decision without considering that vote; and (3) the directors of the
Argentine company may be held personally liable for actions taken by the Argentine company.

Change of Control

In 2001, the Argentine government issued Decree No. 677/01 (Decree 677) which, among other things, allowed listed companies to
opt out of the rules mandating tender offers upon the occurrence of a change of control of a public company.



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According to Decree 677, any person or entity that directly or indirectly acquired a certain percentage of the voting shares of a public company with the intention of obtaining control was
required to publicly offer to purchase all of the targets outstanding shares. However, under Decree 677 listed companies were allowed to opt out of the mandatory tender offer requirement, provided that they did so expressly in
their bylaws. We, with the approval of our shareholders, opted out of the mandatory tender offer requirement. Prospective acquirors could, nevertheless, voluntarily launch an offer for all of our shares.

In 2012, the Argentine government enacted the Capital Markets Law, which was regulated in 2013 by Resolution No. 622/2013 of the CNV. The
new rules establish a general mandatory tender offer system applicable to all listed companies, with no possibility to opt out. To the extent that the application of this new rule to companies that had opted out of the tender offer requirement under
the previous regime is not clear as of the filing date of this Annual Report, PESA cannot assess the outcome of potential future claims by any of our shareholders arising out of a change of control consummated in accordance with rights acquired
under the previous regime.

MATERIAL CONTRACTS

We are party to a number of material financing agreements, including the underlying agreements for the companys global note program, and
letters of credit entered into to backstop certain financial commitments under the Ship or Pay contract with OCP. These agreements and other financing agreements are briefly described under Item 5. Operating and Financial Review and
ProspectsOff-Balance Sheet Transactions, Item 5. Operating and Financial Review and ProspectsLiquidity and Capital ResourcesFinancing activities and Item 5. Operating and Financial Review and
ProspectsLiquidity and Capital Resources Description of Indebtedness.

On September 12, 2012, PESA appointed J.P.
Morgan Chase Bank N.A. as depositary for the Companys ADR program. The program was transferred from Citibank, N.A. to J.P. Morgan Chase Bank N.A. on September 13, 2012 and the contract has a duration of five years.

On July 13, 2012, in connection with the restructuring of CIESAs indebtedness, CIESA, Grupo Pampa and PESA entered into (i) a
settlement agreement and (ii) a fifth amendment to the CIESA Restructuring Agreement. See Item 4. Information on the CompanyGas and EnergyGas TransportationTGSOur Interest in TGS and Corporate Developments,
Item 5. Operating and Financial Review and ProspectsFactors Affecting Our Consolidated Results of OperationsRegulation of the Energy Industry in ArgentinaCIESAs Debt Restructuring and Exhibits 4.3 and 4.4 to this
Annual Report.

Our agreements with related parties are described in Related Party Transactions under Item 7.

EXCHANGE CONTROLS

For more information on exchange controls imposed by the Argentine government, see Item 3. Key InformationExchange Rates,
Item 3. Key InformationExchange Controls and Item 5. Operating and Financial Review and ProspectsDescription of Indebtedness.

TAXATION

The discussion in this section, Taxation, describes tax matters relating to the acquisition, ownership and disposition of our
Class B shares and ADSs, pursuant to the Deposit Agreement entered into with JPMorgan Chase Bank, N.A. (previously Citibank, N.A.) as depositary.

There is at present no income tax treaty between Argentina and the United States.

Argentine Taxes

General

This discussion describes the principal Argentine tax consequences of the acquisition, ownership and disposition of our Class B shares or ADSs,
but it does not purport to be a comprehensive description of all of the Argentine tax considerations that may be relevant to your decision to acquire our Class B shares or ADSs.

The discussion is based upon Argentine tax laws, regulations and administrative and judicial interpretations in effect as of the date of this
Annual Report and subject to change with possible retroactive effect. In addition, this summary is based in part on representations of the depositary and assumes that each obligation provided for in, or otherwise contemplated by, the Deposit
Agreement for our ADSs or any related document will be performed in accordance with its terms. Prospective purchasers of Class B shares or ADSs should consult their own tax advisors as to the Argentine or other tax consequences of the acquisition,
ownership and disposition of our Class B shares or ADSs in their particular circumstances.



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Income Tax

Recent modifications to the Income Tax Law

On September 23, 2013, the Argentine government enacted Law No. 26,893 (regulated by Regulatory Decree 2,334/2013) introducing
modifications to the income tax regime, specifically related to the taxability of the income originating from the purchase and sale of shares and the collection of dividends.

Capital gains

Sales or
other dispositions of shares, quotas, equity interests, certificates, bonds and other securities of Argentine issuers by non-residents of Argentina will be subject to income tax at a rate of 15% of the net gain derived from such transactions. The
net gain is presumed to be 90% of the gross sale price, which equates to an effective tax rate of 13.5% of the gross sale price. Alternatively, Argentine law allows non-residents of Argentina to calculate the net gain by deducting from the sale
price certain costs allowed under Argentine tax regulations, however, procedures for exercising this alternative option have not yet been determined. In the event both the seller and the buyer are non-residents of Argentina, Argentine law requires
that the buyer pay the income tax resulting from such sale to the Argentine tax authorities, however, there are no regulations providing for procedures with respect to the payment of the capital gains tax under these circumstances.

Capital gains of legal entities domiciled in Argentina resulting from the sale or other disposition of our Class B shares or ADSs will be
subject to income tax at a 35% rate. Certain investment funds and foundations are not subject to income tax.

Sales or other dispositions
of shares, quotas, equity interests, certificates, bonds and other securities by Argentine individuals residents or undivided estates located in Argentina that are executed through exchange markets duly authorized by the Argentine Securities and
Exchange Commission (CNV) are exempt from income tax.

With respect to income tax applicable to sales abroad by foreign residents, the tax
rate may be reduced under the provisions of tax treaties between Argentina and the country of residence.

As noted above, several aspects
of Law No. 26,893 are unclear and there is currently no administrative or judicial interpretation of the law. Holders are encouraged to consult a tax advisor as to the particular Argentine income tax consequences of holding and disposing of
ADSs or Class B shares.

Dividends

Dividends paid on our Class B shares or ADSs in excess of the Companys taxable accumulated income for the previous fiscal period, whether
in cash, property or other equity securities, and any other payment in kind, are subject to income tax withholding at the rate of 35% in respect of such excess (Equalization Tax). This is a final tax and it is not applicable if
dividends are paid in shares (acciones liberadas).

In addition, dividends paid by us to our Argentine individual shareholders and
undivided estates as well as to our foreign shareholders are subject to withholding tax at a 10% rate. The 10% withholding tax rate is calculated over the net dividend after giving effect to the Equalization Tax.

With respect to dividends paid to shareholders residing abroad, such withholding may be reduced by a tax treaty between Argentina and their
country of residence.

JPMorgan Chase Bank, N.A. is our paying agent in the United States. See Item 8. Financial
InformationDividends and Item 9. Offering and Listing.

Capital reductions and other distributions

Capital reductions and redemptions of our Class B shares and ADSs are not subject to income tax up to an amount equivalent to the contributed
capital corresponding to the Class B shares and ADSs to be redeemed. Any distribution exceeding this amount, however, will be considered as a dividend for tax purposes and subject to withholding tax at the rate of 35% (plus an additional 10%, if
applicable, as described above).

Personal property tax

Corporations, partnerships, establishments, financial trusts and other legal entities domiciled or located in Argentina are not subject to the
personal property tax.



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Shareholdings or interests in corporations incorporated in Argentina that are held by individuals
or undivided estates domiciled or located in Argentina or abroad, or by companies or other legal persons located abroad, are subject to the personal property tax. A company is liable for the personal property tax payable on behalf of its
shareholders in respect of their share ownership, except for shareholders residing in countries which have signed a tax treaty with Argentina including an applicable exemption. A company liable for this tax payment will be entitled to seek
reimbursement of the amount paid from the shareholders, by way of withholding or by foreclosing directly on the assets that gave rise to such payment. Consequently, we are liable to pay personal property tax in respect of our Class B shares and ADSs
and we are entitled to seek reimbursement of the amount paid from shareholders. We usually seek these reimbursements through a withholding on dividend payments. The applicable tax rate is 0.50% on the equity value of the shares, calculated as of
December 31 of the year under consideration.

For purposes of the above paragraph, shareholdings or interests in companies governed
by the Argentine Companies Law held by companies or any other kinds of corporations incorporated in other countries are presumed to indirectly belong to individuals domiciled abroad or to undivided estates located abroad. Contrary evidence is not
accepted to rebut this presumption.

Tax treaties

There is currently no income tax treaty or convention between Argentina and the United States.

Other taxes

There is no
inheritance, gift, succession or VAT applicable to the ownership, transfer, exchange or disposition of our Class B shares or ADSs, except for the inheritance tax applicable only to corporations or individuals with tax domicile in the Province of
Buenos Aires and the Province of Entre Ríos (the tax rate ranges between 4% and 22% depending on the relationship and the amount of inheritance).

There is neither VAT nor gross revenue tax applicable to the ownership, transfer, exchange or disposition of our Class B shares or ADSs.

Our Class B shares or ADSs owned by legal entities (corporations, partnerships, certain associations and trusts organized in Argentina and
permanent establishments owned by foreign beneficiaries) are exempt from tax on minimum presumed income.

Commissions paid on brokerage
transactions for the sale of our Class B shares on the Buenos Aires Stock Exchange are subject to a VAT at a rate of 21%.

United States Federal Income
Taxes

General

The following discussion summarizes the United States federal income tax considerations relevant to the acquisition, ownership and disposition
of Class B shares or ADSs by U.S. holders (as defined below). This discussion is based on the United States Internal Revenue Code of 1986, as amended (the Code), Treasury regulations promulgated or proposed under the Code, published
rulings, and administrative and judicial interpretations of the Code and the Treasury regulations, all as of the date hereof, and all of which are subject to change (possibly with retroactive effect) and to differing interpretations. This summary is
based in part on representations of the depositary and assumes that each obligation provided for in or otherwise contemplated by the Deposit Agreement for our ADSs or any related document will be performed in accordance with its terms. This
discussion is addressed only to U.S. holders and does not address any United States federal income tax considerations that might be relevant to persons other than U.S. holders. Further, this discussion deals only with U.S. holders that hold ADSs as
capital assets (generally, property held for investment) within the meaning of Section 1221 of the Code, and does not address the tax treatment of holders that may be subject to special tax rules, such as banks, insurance companies, tax-exempt
organizations, financial institutions, brokers or dealers in securities or currencies, traders in securities or currencies that elect mark-to-market treatment, persons that hold the ADSs as part of a hedge, straddle, conversion
transaction or other integrated investment, persons that hold Class B shares or ADSs through a partnership or other pass-through entity, U.S. holders who have a functional currency other than the U.S. dollar or U.S. holders that
own or are treated as owning 10% or more of the voting power of our shares.

This discussion does not describe all aspects of United
States federal income taxation that may be relevant to a particular investor in light of such investors particular circumstances. U.S. holders should consult their own tax advisors as to the specific tax consequences of the acquisition,
ownership and disposition of our Class B shares or ADSs, including the application and effect of United States federal, state, local, foreign and other tax laws and the possible effects of changes in United States federal or other tax laws.



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In general, for United States federal income tax purposes, if you hold our ADSs, you will be
treated as the beneficial owner of our Class B shares represented by those ADSs. For purposes of this discussion, you are a U.S. holder if you are a beneficial owner of our Class B shares and you are, for United States federal income tax purposes,
(a) an individual who is a citizen or resident of the United States, (b) a corporation (or other business entity treated as a corporation) created or organized in or under the laws of the United States or of any state or the District of
Columbia, or (c) otherwise subject to United States federal income taxation on a net income basis with respect to the ADSs or the Class B shares.

The U.S. federal income tax consequences of a partner in a partnership holding our Class B shares or ADSs generally will depend on the status
of the partner and the activities of the partnership. Partners in such a partnership should consult with their own tax advisors.

Taxation of our ADSs

Distributions

Distributions we
make on our Class B shares or ADSs will be treated as taxable dividends to you to the extent of our current and accumulated earnings and profits as determined under United States federal income tax principles. A dividend, generally, will be included
in the gross income of a U.S. holder when the dividend is actually or constructively received by the depositary. Such dividends will not be eligible for the dividends-received deduction generally allowed to U.S. corporations in respect of dividends
received from other U.S. corporations.

Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of
dividends received by an individual U.S. holder with respect to the ADSs will generally be subject to taxation at preferential rates if the dividends are qualified dividends. Dividends paid on the ADSs will be treated as qualified
dividends if (1) the ADSs are readily tradable on an established securities market in the United States and (2) we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in which the dividend is
paid, a passive foreign investment company (a PFIC). The ADSs are listed on the New York Stock Exchange, and will qualify as readily tradable on an established securities market in the United States so long as they are so listed.
Based on our audited consolidated financial statements and relevant market and shareholder data, we believe that we were not treated as a PFIC for United States federal income tax purposes with respect to our 2014 or 2015 taxable year. In addition,
based on our audited consolidated financial statements and our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC
for our 2016 taxable year.

Based on existing guidance, it is not entirely clear whether dividends received with respect to the Class B
shares will be treated as qualified dividends, because the Class B shares are not themselves listed on a U.S. exchange. In addition, the U.S. Treasury has announced its intention to promulgate rules pursuant to which U.S. holders of ADSs or common
stock and intermediaries through whom such securities are held will be permitted to rely on certifications from issuers to establish that dividends are treated as qualified dividends. Because such procedures have not yet been issued, it is not clear
whether we will be able to comply with them. U.S. holders of Class B shares or ADSs should consult their own tax advisors regarding the availability of the reduced dividend tax rate in the light of their own particular circumstances.

The amount of dividend income taxable to you generally will include the amount of Argentine taxes, if any, that we withhold (as described
under Argentine Taxes). Thus, in the event such withholding taxes are imposed, you most likely will be required to report income in an amount greater than the cash you receive in respect of payments made in respect of the ADSs.
Subject to various limitations, you may be eligible to claim the Argentine income tax withheld in connection with any distribution on ADSs as a credit or deduction for purposes of computing your United States federal income tax liability. Foreign
tax credits will not be allowed for withholding taxes imposed with regard to certain short-term or hedged positions in securities and may not be allowed with regard to arrangements in which a U.S. holders expected economic profit is
insubstantial. Dividends we pay in respect of our ADSs generally will be treated as foreign source income and generally will constitute passive income for foreign tax credit purposes. Special rules will apply to the calculation of
foreign tax credits in respect of dividend income that is subject to preferential rates of United States federal income tax. U.S. holders should consult with their own tax advisors with regard to the availability of foreign tax credits and the
application of the foreign tax credit limitations in light of their particular situation.

If a dividend is paid in pesos, the amount you
must include in gross income will be the U.S. dollar value of the distributed pesos, as determined on the date of receipt by the depositary, regardless of whether the payment is in fact converted into U.S. dollars at that time. You will have a tax
basis in such pesos for United States federal income tax purposes equal to the U.S. dollar value on the date of such receipt. Any subsequent gain or loss in respect of such pesos arising from exchange rate fluctuations will be ordinary income or
loss and will be treated as income from U.S. sources for foreign tax credit purposes.

It is unlikely that you will be able to claim a
foreign tax credit for any Argentine personal property tax (as described in Argentine Taxes), but you may be able to deduct such tax in computing your United States federal income tax liability, subject to applicable limitations.



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Sale, exchange or other disposition

Deposits and withdrawals of our Class B shares by U.S. holders in exchange for our Class B shares or ADSs will not result in the realization of
gain or loss for United States federal income tax purposes.

Upon a sale, exchange or other disposition of our Class B shares or ADSs, a
U.S. holder generally will recognize capital gain or loss equal to the difference between the amount realized on such disposition (which, in the event of a redemption, will include any amount withheld by us in respect of Argentine taxes imposed on
such redemption) and the U.S. holders adjusted tax basis in our Class B shares or ADSs (which, generally, is the U.S. dollar cost thereof). Any gain that you recognize generally will be treated as U.S. source income for United States
foreign tax credit purposes. Consequently, if foreign income or withholding tax is imposed on such gain, you will not be able to use any corresponding tax credit unless you have other foreign source income of the appropriate type in respect of which
the credit may be used. Long-term capital gains recognized by an individual holder are generally taxable at preferential rates. Capital losses may be deducted from the U.S. holders taxable income, subject to limitations.

Backup withholding

The
information reporting requirements of the Code generally will apply to distributions on, as well as to proceeds from the sale or exchange of our Class B shares or ADSs. Subject to certain exceptions, backup withholding may apply to
payments of dividends on our Class B shares or ADSs and to payments of the proceeds of a sale or exchange of the Class B shares or ADSs that are made to a non-corporate U.S. holder (or S Corporation) if such holder fails to provide a correct
taxpayer identification number or otherwise comply with applicable requirements of the backup withholding rules. The backup withholding tax is not an additional tax and may be credited against a U.S. holders United States federal income tax
liability, provided that correct information is provided to the Internal Revenue Service. U.S. holders should consult their own tax advisors regarding their qualification for exemption from backup withholding and the procedure for obtaining such
exemption, if applicable.

DOCUMENTS ON DISPLAY

We file reports, including annual reports on Form 20-F, and other information with the SEC pursuant to the rules and regulations of the SEC
that apply to foreign private issuers. You may read and copy any materials filed with the SEC at its public reference rooms in Washington, D.C., at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference room. Foreign private issuers, like PESA, have been required to make filings with the SEC by electronic means since November 4, 2002. Any filings we make electronically are available to the public over the
Internet at the SECs web site at http://www.sec.gov.



|Item 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- | ----------------------------------------------------------

Our results of operations
and financial condition are exposed to market risk from three principal areas: (1) commodity price risk, (2) foreign currency exchange rate risk and (3) interest rate risk. We periodically review the risks associated with our
businesses at a senior management level, based on an approach that has evolved from an independent analysis of each business unit to a risk management strategy that focuses on measuring and monitoring the risks that affect our overall portfolio of
assets. We believe our risk management strategy, which is consistent with our business strategy, allows for efficiency while balancing market risks in the business value chain.

For further information on our market risks, please see Note 4 to our Audited Consolidated Financial Statements.



|Item 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|-------- | ------------------------------------------------------

A- Not applicable.

B- Not applicable.

C- Not applicable.



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12.D  American Depositary Shares

Fees and Charges Applicable to ADS Holders

Effective September 13, 2012, JPMorgan Chase Bank, N.A. succeed Citibank, N.A, as the depositary for our ADR program.

The depositary collects its fees for delivery and surrender of ADSs directly from investors depositing shares or surrendering ADSs for the
purpose of withdrawal or from intermediaries acting for them. The depositary also collects fees for making distributions to investors, by deducting those fees from amounts being distributed or by selling a portion of the distributable property to
pay the fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

Holders
of ADSs and persons depositing or withdrawing shares or ADSs, or persons to whom distributions are made, must pay:



|                                                                 |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|---------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Rate:                                                            |  | For:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                 | 
|Up to U.S.$5.00 per 100 ADSs (or portion thereof)                |  | Issuance of ADSs, including issuances against deposit of shares, issuances in respect of share distributions, rights and other
distributions, issuances pursuant to a stock dividend or stock split declared by the Company, or issuances pursuant to a merger, exchange of securities or any other transaction or event affecting the ADSs or the deposited securities.
 Surrender of ADSs for the purpose of withdrawal of deposited securities or cancellation or
reduction of ADSs for any other reason.
|                                                                 | 
|U.S.$0.05 or less per ADS                                        |  | Any cash distribution.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                 | 
|U.S.$1.50 per ADR or ADRs                                        |  | Transfers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                                                 | 
|U.S.$0.05 or less per ADS per calendar year (or portion thereof) |  | Services performed by the depositary in administering the ADRs.                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                 | 
|Registration fees                                                |  | Registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities.                                                                                                                                                                                                                                                                                                                                                           
|                                                                 | 
|Expenses of the depositary                                       |  | Cable, telex and facsimile transmission and delivery charges incurred at the request of persons depositing, or holders delivering shares,
ADRs or deposited securities.  Conversion of foreign currency into U.S.
dollars.                                                                                                                                                                                                                                                                                  
|                                                                 | 
|Taxes and other governmental charges                             |  | As necessary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

Fees and Direct and Indirect Payments Made by the Depositary to the Company

Past Fees and Payments

During 2015, the Company received from the depositary a reimbursement of U.S.$213,228.

Future Fees and Payments

The depositary may reimburse the Company for certain expenses incurred by the Company in respect of the ADR program established pursuant to the
Deposit Agreement upon such terms and conditions as the Company and the depositary have agreed and as may be further agreed upon from time to time. The Company shall pay to the depositary such fees and charges and reimburse the depositary for such
reasonable out-of-pocket expenses as the depositary and the Company may agree from time to time.



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|Item 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|-------- | -----------------------------------------------

Not applicable.



|Item 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|-------- | ----------------------------------------------------------------------------

Not applicable.



|Item 15. | CONTROLS AND PROCEDURES
|-------- | -----------------------

(a) Disclosure Controls and Procedures

We carried out an evaluation under the supervision and with the participation of our management, including our chief executive officer and
chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act),
as of December 31, 2015. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures.
Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon this evaluation, our chief executive officer and chief financial officer concluded that our
disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that they file or submit under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding
required disclosure.

(b) Managements Annual Report on Internal Control over Financial Reporting

The Companys management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Companys internal controls is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles.

All internal control systems, no matter how well designed,
have inherent limitations. Therefore, even those systems determined to be effective may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The
Companys management assessed the effectiveness of the Companys internal controls over financial reporting as of December 31, 2015. In making this assessment, management used the criteria established in Internal
ControlIntegrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluations and those criteria, our management has concluded that the Companys
internal control over financial reporting was effective as of December 31, 2015.

(c) Attestation Report of the Registered Public
Accounting Firm

The effectiveness of our internal controls over financial reporting as of December 31, 2015 has been audited by
Price Waterhouse & Co. S.R.L., an independent registered public accounting firm in Buenos Aires, Argentina, member firm of PricewaterhouseCoopers International Limited network, as stated in their report which is included herein on pages F-2
through F-3.

(d) Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act during the
period covered by this Annual Report on Form 20-F that have materially affected or are reasonable likely to materially affect our internal control over financial reporting. Additionally, there have been no changes in our internal controls over
financial reporting or other factors that have occurred subsequent to the balance sheet date and through the date of this Annual Report that might materially and adversely affect our internal controls over financial reporting as of December 31,
2015.



|Item 16A. | AUDIT COMMITTEE FINANCIAL EXPERT
|--------- | --------------------------------

Our Board of Directors has determined that Cedric
Bridger is an audit committee financial expert, and that Mr. Bridger is independent, within the meaning of this Item 16A. See Item 6. Directors, Senior Management and Employees  Audit Committee.



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|Item 16B. | CODE OF ETHICS
|--------- | --------------

We have adopted a code of ethics, as defined in Item 16B of Form
20-F. Our code of ethics applies to our chief executive officer and our chief financial officer, as well as to other executive officers and employees. Our code of ethics is available on our web site at http://www.petrobras.com.ar, in the section
Corporate Governance, inside the section entitled Investor Center.



|Item 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|--------- | --------------------------------------

Audit and Non-Audit Fees

Fees for professional services provided to us by our independent auditors during the fiscal years ended December 31, 2015 and 2014 in each
of the following categories are discussed below:

The following table summarizes the fees for professional services provided to PESA, on a
consolidated basis:



|                   |  |                         |      |  |      |  |      | 
|------------------ |  | ----------------------- | ---- |  | ---- |  | ---- | 
|                   |  | Year ended December 31, |     
|                   |  | 2015                    |      |  | 2014 | 
|                   |  | (in millions of pesos)  |     
|Audit fees         |  |                         | 13.9 |  |      |  | 11.1 | 
|Audit-related fees |  |                         |     |  |      |  |     | 
|Tax fees           |  |                         |     |  |      |  |     | 
|                   |  |                         |      |  |      |  |      | 
|Total fees         |  |                         | 13.9 |  |      |  | 11.1 | 
|                   |  |                         |      |  |      |  |      | 

Audit fees. Audit fees in the above table are mainly for professional services rendered in connection
with the audit of our consolidated annual financial statements and the review of our quarterly reports and statutory audits of the financial statements of certain of our subsidiaries.

Independent Auditors. For the year ended December 31, 2015 and 2014, Price Waterhouse & Co. S.R.L., an independent
registered public accounting firm in Buenos Aires, Argentina, member firm of PricewaterhouseCoopers International Limited network, served as our independent auditors and audited our financial statements.

The shareholders meeting of PESA held on April 28, 2016 designated Price Waterhouse & Co. S.R.L., an independent
registered public accounting firm in Buenos Aires, Argentina, member firm of PricewaterhouseCoopers International Limited network, as PESAs independent auditors for the year ending December 31, 2016.

Audit Committee Pre-Approval Policies and Procedures

Our Audit Committee must pre-approve all services provided by the external auditors to ensure the auditors independence and compliance
with all applicable legal restrictions. Pre-approval is either general or specific in nature. All services that are predictable and recurrent in nature and can be performed in a reasonably foreseeable time frame and at a cost that can be reasonably
estimated may be approved by the Audit Committee in a general fashion on an annual basis. Services to be pre-approved on a general basis must be described in sufficient detail so that their scope is readily apparent. This description must also
include an estimate of the fees payable for such services. Specific pre-approval is required for any services not subject to general pre-approval and/or exceeding the estimated cost of those services. Detailed, written descriptions of any proposed
services must be delivered to the administrative manager, who will determine whether such services have already been pre-approved and bring to the Audit Committees attention those services that have not been pre-approved. Any doubts as to the
scope of a pre-approved service must be resolved exclusively by the Audit Committee. Prior to Audit Committee meetings and at least three times a year, the administrative manager must provide a report on all services provided by the external auditor
and related fees to the Audit Committee. The Audit Committee is also required to periodically discuss with the external auditors the services they provide to us and our associates and subsidiaries and the compensation they receive for those
services.

All services performed by the independent auditor during 2014 were approved by the Audit Committee in accordance with this
policy and the aforementioned procedures. This approval applied to the audit of all of our subsidiaries.



|Item 16D. | EXEMPTION FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|--------- | ---------------------------------------------------------

Not applicable.



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|Item 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|--------- | ----------------------------------------------------------------------

From
January 1, 2015 to December 31, 2015, no purchases of our ordinary shares or ADSs were made by us or on our behalf or by any affiliated purchaser.

The Company, in its capacity as trustor, entered into a trust agreement with BNP Paribas Argentina Investment Partners S.A., in its capacity
as trustee. The trust assets consist of shares of the Company which as of December 31, 2015 numbered 5,811,866. The sole purpose of the trust is to make periodical contributions of shares and/or funds resulting from the sale of the shares for
the Company to comply with the funding obligations under its Compensatory Fund and the Employees Supplementary Pension Plan.



|Item 16F. | CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
|--------- | --------------------------------------------

Not applicable.



|Item 16G. | CORPORATE GOVERNANCE
|--------- | --------------------

Companies listed on the NYSE must comply with certain standards
regarding corporate governance as codified in Section 303A of the NYSEs Listed Company Manual, as amended. Nevertheless, the Company, while a listed company, also qualifies as a foreign private issuer and, as such, is permitted to follow
its home country corporate governance practices, governed by the Argentine Companies Law, Capital Market Law No. 26,381 and the Standards of the CNV, in lieu of the provisions of Section 303A, except that it is required to comply with
Sections 303A.06, 303A.11 and 303A.12(b) and (c).

Accordingly:

(i) we must satisfy the audit committee requirements of Rule 10A-3 under the Exchange Act (Rule 10A-3) (Section 303A.06);

(ii) we must provide a brief description of any significant differences between our corporate governance practices and those followed by U.S.
companies under NYSE listing standards (Section 303A.11); and

(iii) (a) our chief executive officer (as of the date hereof,
Mr. Marcos Benicio Pompa Antunes) must promptly notify the NYSE in writing after any executive officer of the Company becomes aware of any non-compliance with the applicable NYSE corporate governance rules (Section 303A.12(b)); and (b) we
must submit an executed written affirmation (in relation to the members of our audit committee) annually, or interim written affirmations, if required, to the NYSE (Section 303A.12(c)).

As required by the NYSE and Item 16G of Form 20-F, the table below discloses the significant differences between our corporate governance
practices and the NYSE rules. Our corporate governance practices are described in further detail elsewhere in this Annual Report. See Item 6. Directors, Senior Management and Employees and Item 10. Additional
InformationMemorandum and Articles of Association.



|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|----------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Section of the NYSE
Listed Company
Manual |  | New York Stock Exchange Corporate Governance
Rules for Domestic Issuers                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Our Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|303A.01                                   |  | Independent Directors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                          |  | Listed companies must have a majority of independent directors on their board of directors. Controlled companies, which would include our company if it were a U.S. issuer, need not comply with this requirement. A
controlled company is one in which more than 50% of the voting power is held by an individual, a group or another company, rather than the public.                                                                                                                                            |  | Argentine law does not require us to have a majority of independent board members. Only the majority of the directors on the Audit Committee must be independent.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|303A.02                                   |  | Independence Tests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                          |  | This section establishes general standards to determine directors independence.
 (a) No director qualifies as independent unless the board of directors
affirmatively determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). The board of directors is also
required to identify which directors are independent and disclose the basis for that determination. |  | At our annual shareholders meeting, our shareholders determine in accordance with Resolution No. 622/13 of the CNV and Capital Market
Law No. 26,381 whether or not each of our directors is independent based on the following criteria. Pursuant to the above mentioned resolution, a director is not independent if such director is:
 (1) a member of management or an employee of shareholders who hold significant interests
in the issuer, or of other entities in which these shareholders hold either directly or indirectly significant interests, or over which these shareholders exercise a significant influence;



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|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|----------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Section of the NYSE
Listed Company
Manual |  | New York Stock Exchange Corporate Governance
Rules for Domestic Issuers                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Our Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                          |  | (b) In addition, a director is not independent if:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                          |  | (i) the director is, or has been within the last three years, an
employee, or an immediate family member is, or has been within the last three years, an executive officer, of the listed company, its parent or a consolidated subsidiary, other than employment as interim chairman or chief executive officer or other
executive officer;                                                                                                                                                                                                |  | (2) an employee of the issuer or was an employee of the issuer in the
last three years;                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                          |  | (ii) the director has received, or has an immediate family member who
has received, during any 12-month period within the last three years, more than U.S.$120,000 in direct compensation from the listed company, its parent or a consolidated subsidiary, other than director and committee fees and pension or other forms
of deferred compensation for prior services (provided such compensation is not contingent in any way on continued service);                                                                                   |  | (3) a person who has professional relations with or is part of a company
or professional association that maintains professional relations with, or that receives remunerations or fees (other than directors fees) from, the issuers or from its shareholders that hold either directly or indirectly significant interests
in or exercise a significant influence over the issuer, or in which such shareholders hold either directly or indirectly significant interests or over which they exercise a significant influence;
|                                          |  | (iii) (A) the director is a current partner or employee of a firm
that is the listed companys internal or external auditor; (B) the director has an immediate family member who is a current partner of such firm; (C) the director has an immediate family member who is a current employee of such firm
and personally works on the companys audit; or (D) the Director or an immediate family member was within the last three years a partner or employee of such firm and personally worked on the companys audit within that time; |  | (4) a person who is either directly or indirectly a holder of
significant interests in the issuer or in an entity that has significant interests in or exercises a significant influence over the issuer;                                                                                                                                                                                                                                                                                                                        
|                                          |  | (iv) the director or an immediate family member is, or has been with the
last three years, employed as an executive officer of another company where any of the listed companys present executive officers at the same time serves or served on that companys compensation committee;                                                                                                                                                                                                                                                     |  | (5) the member is married or is a family member, up to fourth degree by
blood or up to second degree by affinity, to an individual who would not qualify as independent; and                                                                                                                                                                                                                                                                                                                                                     
|                                          |  | (v) the director is a current employee, or an immediate family member is
a current executive officer, of a company that has made payments to, or received payments from, the listed company, its parent or a consolidated subsidiary for property or services in an amount which, in any of the last three fiscal years, exceeds
the greater of U.S.$1 million or 2% of such other companys consolidated gross revenues.                                                                                                                   |  | (6) a person who sells or provides either directly or indirectly goods
or services to the issuer or to shareholders that hold either directly or indirectly significant interests in or exercise a significant influence over the issuer, and receives compensation for such services that is substantially higher than that
payable to a director.                                                                                                                                                                              
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Significant interests shall mean shareholdings that
represent at least 15% of the capital stock of the relevant entity, or a smaller percentage when the person has the right to elect one or more directors by class of shares or by having entered into shareholders, agreements relating to the governance
and management of the relevant entity or of its controlling shareholders.                                                                                                                                        



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|                                          |  |                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|----------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Section of the NYSE
Listed Company
Manual |  | New York Stock Exchange Corporate Governance
Rules for Domestic Issuers                                                                                                                                                                                                                                                      |  | Our Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                          |  |                                                                                                                                                                                                                                                                                                                             
|                                          |  | There is a three-year look-back period before non-independent directors can be considered independent.
 Immediate family member includes a persons spouse, parents, children,
siblings, mothers and fathers-in-law, sons and daughters-in-law, and anyone (other than domestic employees) who share such persons home. |  | Cedric Bridger, Roberto Luis Monti, Roberto Alejandro Fortunati, Alejandro Poletto and Santiago Luis Montezanti are currently members of our Board of Directors who qualify as independent directors pursuant to the factors listed
above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                          |  |                                                                                                                                                                                                                                                                                                                             
|303A.03                                   |  | Executive Sessions                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                          |  |                                                                                                                                                                                                                                                                                                                             
|                                          |  | The non-management directors of each listed company must meet at regularly scheduled executive sessions without management.                                                                                                                                                                                                  |  | Under Argentine Law, a board of directors must meet at least once every three months.
 Marcos Benício Pompa Antunes and Maelcio Mauricio Soares, in addition to serving on
the Board of Directors, have management positions. Our other seven directors are non-managing directors. The non-managing directors do not meet at regularly scheduled executive sessions without the presence of the managerial directors. See
Item 6. Directors, Senior Management and EmployeesDirectors and Senior ManagementBoard of Directors.                                                                                                                                                                                                                  
|                                          |  |                                                                                                                                                                                                                                                                                                                             
|303A.04                                   |  | Nominating/Corporate Governance Committee                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                          |  |                                                                                                                                                                                                                                                                                                                             
|                                          |  | Listed companies must have a nominating/corporate governance committee composed entirely of independent directors, with a written charter that covers the committees purpose and responsibilities and an annual performance
evaluation of the committee.                                                                    |  | Argentine law does not require the establishment of a nominating committee or a corporate governance committee. We do not have either of these committees. Instead, their functions are carried out by the Compensation Committee or by
the Board of Directors, with the assistance of the Executive Management of Legal Affairs, the Management of Human Resources and the General Secretary.                                                                                                                                                                                                                                                                                                                                                       
|                                          |  |                                                                                                                                                                                                                                                                                                                             
|303A.05                                   |  | Compensation Committee                                                                                                                                                                                                                                                                                                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                          |  |                                                                                                                                                                                                                                                                                                                             
|                                          |  | Listed companies must have a compensation committee composed entirely of independent directors, with a written charter that covers the committees purpose and responsibilities and an annual performance evaluation.                                                                                                        |  | Argentine regulations do not require the establishment of a compensation committee.
 However, at its October 6, 2006 meeting, in order to better supervise salary and
compensation matters, our Board of Directors created a Compensation Committee, whose purpose is to assure the compliance with and revise, whenever necessary, policies relating to compensation that aim to provide the Company with greater flexibility
to make more effective decisions. The Committee meets to approve matters relating to compensation policy, including variable compensation practices. The Committee, composed by Roberto Luis Monti, André Lima Cordeiro and Marcos Benício
Pompa Antunes, must report to the Board of Directors at least semiannually.



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|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|----------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Section of the NYSE
Listed Company
Manual |  | New York Stock Exchange Corporate Governance
Rules for Domestic Issuers                                                                                                                                                                                                                                                                                                                                                                                      |  | Our Practices                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|303A.06 303A.07                           |  | Audit Committee                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                          |  | Listed companies must have an Audit Committee with a minimum of three independent, financially literate members (at least one member must
have accounting or related financial management expertise) that satisfy the independence requirements of Rule 10A-3. 
The Committee must have a written charter that addresses its purpose, annual performance evaluation and duties and responsibilities.
 Listed companies must have an internal audit function. |  | The Audit Committee is an advisory committee to the Board of Directors. Argentine law requires that the audit committee be composed of three
members from the Board of Directors (with a majority of independent directors), all of whom are well-versed in business, financial or accounting matters. The Audit Committee is composed of three directors, who each satisfy the independence
requirements of Rule 10A-3. One member of our Audit Committee, Mr. Cedric Bridger, qualifies as a financial expert within the meaning of Item 16A of Form 20-F. See Item 16A. Audit Committee Financial
Expert.  Our Audit Committee is responsible for, among other things: (1)
monitoring and evaluating the activities of the internal and external auditors, (2) supervising the process for preparation of our financial statements, (3) ensuring that our financial statements comply with applicable legal requirements, (4)
providing the market with complete information with respect to transactions where members of corporate bodies or controlling shareholders of ours have conflicts of interest, and (5) opining on the reasonableness of compensatory plans for directors
and managers. See Item 6. Directors, Senior Management and EmployeesBoard PracticesAudit Committee. 
Under Argentine law, the shareholders must appoint the external auditor. The Board of Directors may present a proposal regarding the appointment of the
external auditor to the shareholders meeting. The Audit Committee must issue an opinion on any such proposal presented to the shareholders. 
We also have an internal audit department.
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | In accordance with Argentine law, we also have established a
Statutory Supervisory Committee that is comprised of three members and three alternate members, approved by our shareholders. Members of the Statutory Supervisory Committee are not members of our Board of Directors. The primary responsibilities of
the Statutory Supervisory Committee are to monitor the Board of Directors and managements compliance with the Argentine Companies Law, our bylaws and our shareholders resolutions. The Statutory Supervisory Committee also performs
other functions, including: (1) attending meetings of the Board of Directors and shareholders, (2) calling extraordinary shareholders meetings when deemed necessary or when required by shareholders, in accordance with the Argentine Companies
Law, (3) presenting a report on the reports of the Board of Directors and the annual financial statements at ordinary shareholders meetings, and (4) investigating written complaints of shareholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



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|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                       
|----------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Section of the NYSE
Listed Company
Manual |  | New York Stock Exchange Corporate Governance
Rules for Domestic Issuers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Our Practices                                                                                                                                                                                                                                                                                                                                                                         
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | representing not less than 2% of the capital stock. See Item 6. Directors, Senior Management and EmployeesBoard PracticesStatutory Supervisory Committee.                                                                                                                                                                                                                         
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|303A.08                                   |  | Shareholder Approval of Equity Compensation Plans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                                                                                                                                                                                                                                                                                                                                                                       
|                                          |  | Shareholders must be given the opportunity to vote on equity
compensation plans and material revisions thereto, except for employment inducement awards, certain grants, plans and amendments in the context of mergers and acquisitions, and certain specific types of plans as set forth in the NYSE rules.                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Our Board of Directors approves equity compensation plans for our
executive officers and senior management. For a description of our stock option programs for our executive officers and senior management see Item 6. Directors, Senior Management and EmployeesCompensation.                                                                                                    
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | The Audit Committee issues an opinion on the reasonableness of the Board
of Directors proposals regarding fees and executive equity compensation plans.                                                                                                                                                                                                                              
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|303A.09                                   |  | Corporate Governance Guidelines                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                                                                                                                                                                                                                                                                                                                                                                                       
|                                          |  | Listed companies must adopt and disclose corporate governance
guidelines.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Adoption of corporate governance guidelines is not required by Argentine
law, but the CNV requires companies to publicly report annually on their adoption of certain recommended corporate governance practices. We have nonetheless adopted the practice of issuing corporate governance policies, and public reports on these
policies, on an annual basis, as required by the CNV.
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|303A.10                                   |  | Code of Business Conduct and Ethics                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  |                                                                                                                                                                                                                                                                                                                                                                                       
|                                          |  | Listed companies must adopt and disclose a code of business conduct and
ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | We have adopted a Code of Conduct and Business Ethics applicable to all
employees. See Item 16B. Code of Ethics. Any amendment to the code will be disclosed on our web site at www.petrobras.com.ar/inversores                                                                                                                                                                     
|                                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|303A.12                                   |  | Certification Requirements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                       
|                                          |  | (a) Each listed company chief executive officer must certify to the NYSE
each year that he or she is not aware of any violation by the company of NYSE corporate governance listing standards, qualifying the certification to the extent necessary. 
(b) Each listed company CEO must promptly notify the NYSE in writing after any executive officer of the listed company becomes aware of any non-compliance with
any applicable provisions of Section 303A of the NYSE Listed Company Manual.  (c) Each
listed company must submit an executed Written Affirmation annually to the NYSE. In addition, each listed company must submit an interim written affirmation as and when required by the interim written affirmation form specified by the NYSE. |  | Our CEO will promptly notify the NYSE in writing if an executive officer
becomes aware of any material non-compliance with any applicable provision of the NYSE corporate governance rules.                                                                                                                                                                                           



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|Item 16H. | MINE SAFETY DISCLOSURE
|--------- | ----------------------

Not applicable.



|Item 17. | FINANCIAL STATEMENTS
|-------- | --------------------

Not applicable.



|Item 18. | FINANCIAL STATEMENTS
|-------- | --------------------

Pages F-1 to F-81 and S-1 to S-12 of this Annual Report are
incorporated herein by reference. We have included in this Annual Report, in addition to our Audited Consolidated Financial Statements unaudited oil and gas supplementary disclosures under ASC Topic 932, beginning on page S-1 of this
Annual Report.



|Item 19. | EXHIBITS
|-------- | --------

Pursuant to the rules and regulations of the SEC, we have filed certain
agreements as exhibits to this Annual Report on Form 20-F. These agreements may contain representations and warranties by the parties. These representations and warranties have been made solely for the benefit of the other party or parties to such
agreements and (1) may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties to such agreements if those statements turn out to be inaccurate, (2) may have been qualified by disclosures
that were made to such other party or parties and that either have been reflected in the companys filings or are not required to be disclosed in those filings, (3) may apply materiality standards different from what may be viewed as
material to investors and (4) were made only as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent developments. Accordingly, these representations and warranties may not
describe our actual state of affairs at the date hereof.



|        |  |                                                                                                                                                                                                                                                                                                                             |  |                           |       |  |       |  |      |      |  |  |         |  |  |          |      |   |  | 
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----- |  | ----- |  | ---- | ---- |  |  | ------- |  |  | -------- | ---- | - |  | 
|Exhibit |  |                                                                                                                                                                                                                                                                                                                             |  | Incorporated by Reference |       |  | Filed
|Number  |  | Description                                                                                                                                                                                                                                                                                                                 |  | Filer                     |       |  | Form  |  |      | Date |  |  | No.     |  |  | Herewith
|        |  |                                                                                                                                                                                                                                                                                                                             |  |                           |       | 
|1.1     |  | English translation of bylaws (estatutos sociales) of Petrobras Energía S.A.                                                                                                                                                                                                                                                |  |                           | PESA  |  |       |  | 20-F |      |  |  | 6/30/09 |  |  |          | 1.2  |   |  | 
|        |  |                                                                                                                                                                                                                                                                                                                             |  |                           |       | 
|2.1     |  | Form of Deposit Agreement among Petrobras Energía S.A., Citibank, N.A., as depositary, and the Holders and Beneficial Owners of American Depositary Shares evidenced by American Depositary Receipts issued thereunder,
including the form of American Depositary Receipt.                                                  |  |                           | PESA  |  |       |  | 20-F |      |  |  | 6/24/10 |  |  |          | 2.1  |   |  | 
|        |  |                                                                                                                                                                                                                                                                                                                             |  |                           |       | 
|2.2     |  | Form of Amended and Restated Deposit Agreement among Petrobras Argentina S.A., JPMorgan Chase Bank, N.A., as depositary, and all holders from time to time of ADRs issued thereunder, including the Form of American Depositary
Receipt.                                                                                    |  |                           | PESA  |  |       |  | F-6  |      |  |  | 9/5/12  |  |  |          | (a   | ) |  | 
|2.3     |  | Amended and Restated Indenture, dated August 1, 2002, amending and restating the Indenture dated May 1, 1998, between Petrobras Energía S.A. and Citibank, N.A.                                                                                                                                                             |  |                           | PEPSA |  |       |  | 20-F |      |  |  | 6/30/03 |  |  |          | 2.11 |   |  | 
|        |  |                                                                                                                                                                                                                                                                                                                             |  |                           |       | 
|4.1     |  | Restructuring Agreement dated as of September 1, 2005 among Compañía de Inversiones de Energía S.A., Petrobras Energía S.A., Petrobras Hispano Argentina S.A., Enron Pipeline Company Argentina
S.A., ABN AMRO BANK N.V. Sucursal Argentina, and the Creditors named therein.                                               |  |                           | PEPSA |  |       |  | 20-F |      |  |  | 6/29/06 |  |  |          | 4.4  |   |  | 
|        |  |                                                                                                                                                                                                                                                                                                                             |  |                           |       | 
|4.2     |  | Third Amendment to the Restructuring Agreement dated as of March 25, 2008 among Compañía de Inversiones de Energía S.A., Petrobras Energía S.A., Petrobras Hispano Argentina S.A., Enron Pipeline
Company Argentina S.A., ABN AMRO BANK N.V. Sucursal Argentina, and AEI.                                                   |  |                           | PEPSA |  |       |  | 20-F |      |  |  | 6/27/08 |  |  |          | 4.2  |   |  | 
|        |  |                                                                                                                                                                                                                                                                                                                             |  |                           |       | 
|4.3     |  | Fifth Amendment to the Restructuring Agreement dated as of July 13, 2012 among Compañía de Inversiones de Energía S.A., Petrobras Argentina S.A., Petrobras Hispano Argentina S.A., Pampa Energía S.A.,
Pampa Inversiones S.A., Inversiones Argentina I, EPCA S.A. and The Royal Bank of Scotland N.V., Sucursal Argentina. |  |                           | PESA  |  |       |  | 20-F |      |  |  | 4/29/13 |  |  |          | 4.3  |   |  | 



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|        |  |                                                                                                                                                                                                                             |  |                           |       |  |       |  |      |      |  |  |         |  |  |          |      |  |  |  |   | 
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----- |  | ----- |  | ---- | ---- |  |  | ------- |  |  | -------- | ---- |  |  |  | - | 
|Exhibit |  |                                                                                                                                                                                                                             |  | Incorporated by Reference |       |  | Filed | 
|Number  |  | Description                                                                                                                                                                                                                 |  | Filer                     |       |  | Form  |  |      | Date |  |  | No.     |  |  | Herewith |     
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|4.4     |  | Settlement Agreement dated July 13, 2012 among Compañía de Inversiones de Energía S.A., Petrobras Argentina S.A., Petrobras Hispano Argentina S.A., Pampa Energía S.A., Pampa Inversiones S.A. and
Inversiones Argentina I. |  |                           | PESA  |  |       |  | 20-F |      |  |  | 4/29/13 |  |  |          | 4.4  |  |  |  |   | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|4.5     |  | Loan Agreement Number 0088/2005, dated February 21, 2005, between Petrobras Energía S.A., as borrower, and Petrobras International Braspetro B.V., as lender (English translation).                                         |  |                           | PEPSA |  |       |  | 20-F |      |  |  | 6/30/05 |  |  |          | 2.16 |  |  |  |   | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|4.6     |  | Loan Agreement, dated December 15, 2008, between Petrobras International Braspetro B.V., as borrower, and Petrobras Energía S.A., as lender (English translation).                                                          |  |                           | PEPSA |  |       |  | 20-F |      |  |  | 6/30/09 |  |  |          | 4.4  |  |  |  |   | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|4.7     |  | Loan Agreement, dated December 15, 2008, between Petrobras International Braspetro B.V., as borrower, and Petrobras Holding Austria AG, as lender (English translation).                                                    |  |                           | PEPSA |  |       |  | 20-F |      |  |  | 6/30/09 |  |  |          | 4.5  |  |  |  |   | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|4.8     |  | Stock Purchase Agreement, dated December 21, 2007, between Petrobras Energía, S.A., as seller, and Petrobras International Braspetro B.V., as purchaser.                                                                    |  |                           | PEPSA |  |       |  | 20-F |      |  |  | 6/27/08 |  |  |          | 4.7  |  |  |  |   | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|4.9     |  | Stock Purchase Agreement, dated April 27, 2009, between Petrobras Energía S.A., as seller, and Petrobras International Braspetro B.V., as purchaser.                                                                        |  |                           | PEPSA |  |       |  | 20-F |      |  |  | 6/30/09 |  |  |          | 4.7  |  |  |  |   | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|5.0     |  | Share Purchase Agreement, dated May 31, 2012, between Petrobras Participaciones S.L., as Vendor, and Petrobras Argentina S.A., as Purchaser.                                                                                |  |                           | PESA  |  |       |  | 20-F |      |  |  | 4/29/13 |  |  |          | 5.0  |  |  |  |   | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|5.1     |  | DeGolyer and MacNaughton reserves report, dated January 14, 2016.                                                                                                                                                           |  |                           |       |  |       |  |      |      |  |  |         |  |  |          |      |  |  |  | X | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|8.1     |  | List of Subsidiaries of Petrobras Argentina S.A.                                                                                                                                                                            |  |                           |       |  |       |  |      |      |  |  |         |  |  |          |      |  |  |  | X | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|12.1    |  | Petrobras Argentina S.A. CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated April 29, 2016.                                                                                                 |  |                           |       |  |       |  |      |      |  |  |         |  |  |          |      |  |  |  | X | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|12.2    |  | Petrobras Argentina S.A. CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated April 29, 2016.                                                                                                 |  |                           |       |  |       |  |      |      |  |  |         |  |  |          |      |  |  |  | X | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|13.1    |  | Petrobras Argentina S.A. CEO Certification furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated April 29, 2016.                                                                                       |  |                           |       |  |       |  |      |      |  |  |         |  |  |          |      |  |  |  | X | 
|        |  |                                                                                                                                                                                                                             |  |                           |       | 
|13.2    |  | Petrobras Argentina S.A. CFO Certification furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated April 29, 2016.                                                                                       |  |                           |       |  |       |  |      |      |  |  |         |  |  |          |      |  |  |  | X | 

Omitted from exhibits with this Annual Report are certain instruments and agreements with respect to
PESAs long-term debt, none of which authorizes securities in a total amount exceeding 10% of our total assets. We hereby agree to furnish to the SEC a copy of any such omitted instruments or agreements as the SEC requests.



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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this Annual Report on its behalf.



PETROBRAS ARGENTINA S.A.By:

/s/ Marcos Benicio Pompa AntunesName:

Marcos Benicio Pompa AntunesTitle:

Chief Executive OfficerBy:

/s/ Maelcio Mauricio SoaresName:

Maelcio Mauricio SoaresTitle:

Chief Financial Officer


Date: April 29, 2016



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INDEX TO FINANCIAL STATEMENTS

PETROBRAS ARGENTINA S.A.



|                                                                                                                                                                                                                     |  |  |     | 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | --- | 
|                                                                                                                                                                                                                     | 
|Report of independent registered public accounting firm on the Consolidated Financial
Statements and on Internal Control over Financial Reporting of Petrobras Argentina S.A. as of December 31, 2015, 2014 and 2013 |  |  | F-2 | 
|                                                                                                                                                                                                                     | 
|Consolidated statements of income of Petrobras Argentina S.A. for the years ended
December 31, 2015, 2014 and 2013                                                                                                   |  |  | F-4 | 
|                                                                                                                                                                                                                     | 
|Consolidated statements of comprehensive income of Petrobras Argentina S.A. for
the years ended December 31, 2015, 2014 and 2013                                                                                     |  |  | F-5 | 
|                                                                                                                                                                                                                     | 
|Consolidated statements of financial position of Petrobras Argentina S.A. as of
 December 31, 2015, 2014 and 2013                                                                                                    |  |  | F-6 | 
|                                                                                                                                                                                                                     | 
|Consolidated statements of changes in equity of Petrobras Argentina S.A. for the
 years ended December 31, 2015, 2014 and 2013                                                                                       |  |  | F-7 | 
|                                                                                                                                                                                                                     | 
|Consolidated statements of cash flows of Petrobras Argentina S.A. for the years
 ended December 31, 2015, 2014 and 2013                                                                                              |  |  | F-8 | 
|                                                                                                                                                                                                                     | 
|Notes to the consolidated financial statements of Petrobras Argentina S.A. as
 of the years ended December 31, 2015, 2014 and 2013                                                                                   |  |  | F-9 | 



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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Petrobras Argentina S.A.

In our opinion, the accompanying consolidated statements of financial position at December 31, 2015, 2014 and 2013 and the related consolidated statements of
income, comprehensive income, changes in equity, and cash flows present fairly, in all material respects, the financial position of Petrobras Argentina S.A. and its subsidiaries at December 31, 2015, 2014 and 2013, and the results of its operations
and its cash flows for each of the three years in the period ended December 31, 2015 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework(2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). The Companys management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness
of internal control over financial reporting, included in Managements Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Companys internal
control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements
included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement
presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our
opinions.

A companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors
of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.



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Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

Autonomous City of Buenos Aires, April 29, 2016

PRICE WATERHOUSE & CO. S.R.L.

By: /s/ Miguel A. Urus
(Partner)



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CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013

(Stated in millions of Argentine pesos)



|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|------------------------------------------------- |  | ----- | ---- |  | ---- |  | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                  |  | Notes |      |  | 2015 |  |         | 2014 |  |  | 2013    |  
|Sales                                             |  |       |      |  |      |  | 21,955  |      |  |  | 20,738  |   |  |  | 15,340  |  
|Cost of sales                                     |  |       | 6    |  |      |  | (15,554 | )    |  |  | (14,490 | ) |  |  | (11,260 | )
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Gross profit                                      |  |       |      |  |      |  | 6,401   |      |  |  | 6,248   |   |  |  | 4,080   |  
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Administrative and selling expenses               |  |       | 7    |  |      |  | (2,921  | )    |  |  | (2,416  | ) |  |  | (1,797  | )
|Exploration expenses                              |  |       | 8    |  |      |  | (148    | )    |  |  | (70     | ) |  |  | (82     | )
|Other operating expenses, net                     |  |       | 9    |  |      |  | (123    | )    |  |  | (779    | ) |  |  | (571    | )
|Share of net loss of equity accounted investments |  |       | 17.3 |  |      |  | (1,290  | )    |  |  | (1,735  | ) |  |  | (279    | )
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Operating income                                  |  |       |      |  |      |  | 1,919   |      |  |  | 1,248   |   |  |  | 1,351   |  
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Financial results                                 |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Financial income                                  |  |       | 10   |  |      |  | 1,539   |      |  |  | 1,124   |   |  |  | 936     |  
|Financial costs                                   |  |       | 10   |  |      |  | (1,592  | )    |  |  | (1,052  | ) |  |  | (883    | )
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Income (loss) before income tax                   |  |       |      |  |      |  | 1,866   |      |  |  | 1,320   |   |  |  | 1,404   |  
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Income tax                                        |  |       | 11   |  |      |  | (971    | )    |  |  | (742    | ) |  |  | (552    | )
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Net income                                        |  |       |      |  |      |  | 895     |      |  |  | 578     |   |  |  | 852     |  
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Earnings per share basic / diluted (in pesos)     |  |       | 12   |  |      |  | 0.422   |      |  |  | 0.227   |   |  |  | 0.386   |  
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Attributable to:                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Shareholders of the Company                       |  |       |      |  |      |  | 853     |      |  |  | 458     |   |  |  | 779     |  
|Non-controlling interest                          |  |       |      |  |      |  | 42      |      |  |  | 120     |   |  |  | 73      |  
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  
|Total                                             |  |       |      |  |      |  | 895     |      |  |  | 578     |   |  |  | 852     |  
|                                                  |  |       |      |  |      |  |         |      |  |  |         |   |  |  |         |  

The accompanying Notes 1 to 36 are an integral part of these consolidated financial statements.



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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013

(Stated in millions of Argentine pesos)



|                                                               |  |      |       |  |      |  |       |      |  |  |       | 
|-------------------------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                               |  | 2015 |       |  | 2014 |  |       | 2013 | 
|Net income for the year                                        |  |      | 895   |  |      |  | 578   |      |  |  | 852   | 
|Other comprehensive income (net of taxes)                      |  |      |       |  |      |  |       |      |  |  |       | 
|Items that will not be reclassified to profit or loss:         |  |      |       |  |      |  |       |      |  |  |       | 
|Actuarial profits and loss                                     |  |      |       |  |      |  |       |      |  |  |       | 
|Recognized in equity                                           |  |      | 33    |  |      |  | 6     |      |  |  | 10    | 
|Recognized to non-controlling interest                         |  |      | 11    |  |      |  | (5    | )    |  |  |      | 
|Items that may be subsequently reclassified to profit or loss: |  |      |       |  |      |  |       |      |  |  |       | 
|Foreign currency translation                                   |  |      |       |  |      |  |       |      |  |  |       | 
|Recognized in equity                                           |  |      | 601   |  |      |  | 277   |      |  |  | 107   | 
|Recognized to non-controlling interest                         |  |      | 571   |  |      |  | 241   |      |  |  | 171   | 
|                                                               |  |      |       |  |      |  |       |      |  |  |       | 
|Other comprehensive income for the year                        |  |      | 1,216 |  |      |  | 519   |      |  |  | 288   | 
|                                                               |  |      |       |  |      |  |       |      |  |  |       | 
|Total other comprehensive income                               |  |      | 2,111 |  |      |  | 1,097 |      |  |  | 1,140 | 
|                                                               |  |      |       |  |      |  |       |      |  |  |       | 
|Attributable to:                                               |  |      |       |  |      |  |       |      |  |  |       | 
|Shareholders of the Company                                    |  |      | 1,487 |  |      |  | 741   |      |  |  | 896   | 
|Non-controlling interest                                       |  |      | 624   |  |      |  | 356   |      |  |  | 244   | 
|                                                               |  |      |       |  |      |  |       |      |  |  |       | 
|Total                                                          |  |      | 2,111 |  |      |  | 1,097 |      |  |  | 1,140 | 
|                                                               |  |      |       |  |      |  |       |      |  |  |       | 

The accompanying Notes 1 to 36 are an integral part of these consolidated financial statements.



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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

AS OF DECEMBER 31, 2015, 2014 AND 2013

(Stated in
millions of Argentine pesos)



|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|------------------------------------------- |  | ----- | ---- |  | ---- |  | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                            |  | Notes |      |  | 2015 |  |        | 2014 |  |  | 2013   |  
|CURRENT ASSETS                              |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Cash and cash equivalents                   |  |       | 13   |  |      |  | 2,229  |      |  |  | 2,278  |   |  |  | 1,193  |  
|Other investments                           |  |       | 18   |  |      |  | 43     |      |  |  | 33     |   |  |  | 23     |  
|Trade receivables                           |  |       | 14   |  |      |  | 3,241  |      |  |  | 2,945  |   |  |  | 2,519  |  
|Other receivables                           |  |       | 15   |  |      |  | 3,100  |      |  |  | 1,676  |   |  |  | 1,551  |  
|Inventories                                 |  |       | 16   |  |      |  | 2,130  |      |  |  | 1,951  |   |  |  | 1,310  |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Total current assets                        |  |       |      |  |      |  | 10,743 |      |  |  | 8,883  |   |  |  | 6,596  |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|NON-CURRENT ASSETS                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Trade receivables                           |  |       | 14   |  |      |  | 48     |      |  |  | 60     |   |  |  | 73     |  
|Other receivables                           |  |       | 15   |  |      |  | 186    |      |  |  | 163    |   |  |  | 245    |  
|Deferred income tax assets                  |  |       | 11   |  |      |  | 7      |      |  |  | 47     |   |  |  |       |  
|Inventories                                 |  |       | 16   |  |      |  | 78     |      |  |  | 67     |   |  |  | 58     |  
|Other investments                           |  |       | 18   |  |      |  | 290    |      |  |  | 153    |   |  |  | 301    |  
|Investments in associates                   |  |       | 17.2 |  |      |  | 3,130  |      |  |  | 2,979  |   |  |  | 3,568  |  
|Investments in joint venture                |  |       | 17.1 |  |      |  | 441    |      |  |  | 491    |   |  |  | 497    |  
|Property, plant and equipment               |  |       | 19   |  |      |  | 14,174 |      |  |  | 11,589 |   |  |  | 9,524  |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Total non-current assets                    |  |       |      |  |      |  | 18,354 |      |  |  | 15,549 |   |  |  | 14,266 |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Total assets                                |  |       |      |  |      |  | 29,097 |      |  |  | 24,432 |   |  |  | 20,862 |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|CURRENT LIABILITIES                         |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Accounts payable                            |  |       |      |  |      |  | 4,097  |      |  |  | 3,045  |   |  |  | 2,553  |  
|Short-term loans                            |  |       | 20.3 |  |      |  | 61     |      |  |  | 92     |   |  |  | 208    |  
|Payroll and social security taxes           |  |       |      |  |      |  | 473    |      |  |  | 371    |   |  |  | 304    |  
|Taxes payable                               |  |       | 21   |  |      |  | 775    |      |  |  | 1,134  |   |  |  | 578    |  
|Provisions                                  |  |       | 22   |  |      |  | 1,655  |      |  |  | 1,253  |   |  |  | 385    |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Total current liabilities                   |  |       |      |  |      |  | 7,061  |      |  |  | 5,895  |   |  |  | 4,028  |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|NON-CURRENT LIABILITIES                     |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Accounts payable                            |  |       |      |  |      |  |       |      |  |  | 4      |   |  |  | 7      |  
|Long-term loans                             |  |       | 20.3 |  |      |  | 3,910  |      |  |  | 2,587  |   |  |  | 2,024  |  
|Employment benefit obligations              |  |       | 23   |  |      |  | 534    |      |  |  | 438    |   |  |  | 336    |  
|Deferred income tax liabilities             |  |       | 11   |  |      |  | 863    |      |  |  | 499    |   |  |  | 548    |  
|Provisions                                  |  |       | 22   |  |      |  | 2,166  |      |  |  | 2,394  |   |  |  | 2,224  |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Total non-current liabilities               |  |       |      |  |      |  | 7,473  |      |  |  | 5,922  |   |  |  | 5,139  |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Total liabilities                           |  |       |      |  |      |  | 14,534 |      |  |  | 11,817 |   |  |  | 9,167  |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|EQUITY                                      |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Capital Stock                               |  |       | 24   |  |      |  | 2,019  |      |  |  | 2,019  |   |  |  | 2,019  |  
|Other items in Capital                      |  |       |      |  |      |  | 2,186  |      |  |  | 2,186  |   |  |  | 2,186  |  
|Reserves income                             |  |       | 25   |  |      |  | 7,465  |      |  |  | 7,144  |   |  |  | 6,508  |  
|Other                                       |  |       |      |  |      |  | (693   | )    |  |  | (693   | ) |  |  | (693   | )
|Unappropiated retained earnings             |  |       | 26   |  |      |  | 853    |      |  |  | 458    |   |  |  | 752    |  
|Other comprehensive income                  |  |       | 27   |  |      |  | 1,106  |      |  |  | 472    |   |  |  | 189    |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Total shareholders equity attributable to: |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Shareholders of the Company                 |  |       |      |  |      |  | 12,936 |      |  |  | 11,586 |   |  |  | 10,961 |  
|Non-controlling interest                    |  |       |      |  |      |  | 1,627  |      |  |  | 1,029  |   |  |  | 734    |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Total equity                                |  |       |      |  |      |  | 14,563 |      |  |  | 12,615 |   |  |  | 11,695 |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|TOTAL LIABILITIES AND EQUITY                |  |       |      |  |      |  | 29,097 |      |  |  | 24,432 |   |  |  | 20,862 |  
|                                            |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  

The accompanying Notes 1 to 36 are an integral part of these consolidated financial statements.



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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013

(Stated in millions of Argentine pesos)



|                                          |  |       |    |   |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  
|----------------------------------------- |  | ----- | -- | - | ------------------------------------------- |  | ----- | --------------------------- |  |  | --------------------------------- |  |  | ------------------------------------------------- | --- |  | ------------------------------ |  | -- | ------------------------ |  |  | ---------------------- |  |  |  | ------ | - |  |  | ----- | - |  |  | ---- | - |  |  | ------ | - |  |  | ----- |  |  |  | ------ | - |  |  | ----- | - |  |  | ------ | -
|                                          |  |       |    |   | Attributable to shareholders of the company |  |       | Non-controllinginterest (c) |  |  | Totalequity                       | 
|                                          |  |       |    |   | Capital stock                               |  |       | Rertained earnings          |  |  | OCI(b)                            |  |  | Total                                             |     |  |                               
|                                          |  |       |    |   |                                             |  |       | Other items in Capital      |  |  | Reserves income                   |  |  | Other(a)                                          |     |  | Unappropriatedretainedearnings |  |    |                          |  | 
|                                          |  | Notes |    |   | Capitalstock                                |  |       | Adjustmentto capitalstock   |  |  | Additionalpaid-incapitalfrommeger |  |  | Additionalpaid-incapital onsales ofstock ofparent |     |  | Legalreserve                   |  |    | Futureinvestmentreserves |  |  | Futuredividendsreserve |  |  |  |        |   |  | 
|Balances as of December 31, 2012          |  |       |    |   |                                             |  | 2,019 |                             |  |  | 1,230                             |  |  |                                                   | 912 |  |                                |  | 44 |                          |  |  | 483                    |  |  |  | 4,781  |   |  |  | 689   |   |  |  | (693 | ) |  |  | 528    |   |  |  | 72    |  |  |  | 10,065 |   |  |  | 506   |   |  |  | 10,571 |  
|                                          |  |       |    |   |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  
|Other comprehensive income for the period |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  |      |   |  |  |     |   |  |  |       |   |  |  | 117   |  |  |  | 117    |   |  |  | 171   |   |  |  | 288    |  
|Societal resolution                       |  |       | (d | ) |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  
|- Legal reserve                           |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  | 32                     |  |  |  |       |   |  |  |      |   |  |  |     |   |  |  | (32    | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Future investments reserve              |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  | 523    |   |  |  |      |   |  |  |     |   |  |  | (523   | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Reversal by investments                 |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  | (2,999 | ) |  |  |      |   |  |  |     |   |  |  | 2,999  |   |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Constitution for new investments        |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  | 2,638  |   |  |  |      |   |  |  |     |   |  |  | (2,638 | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Future dividends reserve                |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  | 361   |   |  |  |     |   |  |  | (361   | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|Dividends in cash                         |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  |      |   |  |  |     |   |  |  |       |   |  |  |      |  |  |  |       |   |  |  | (16   | ) |  |  | (16    | )
|Net income                                |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  |      |   |  |  |     |   |  |  | 779    |   |  |  |      |  |  |  | 779    |   |  |  | 73    |   |  |  | 852    |  
|                                          |  |       |    |   |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  
|Balances as of December 31, 2013          |  |       |    |   |                                             |  | 2,019 |                             |  |  | 1,230                             |  |  |                                                   | 912 |  |                                |  | 44 |                          |  |  | 515                    |  |  |  | 4,943  |   |  |  | 1,050 |   |  |  | (693 | ) |  |  | 752    |   |  |  | 189   |  |  |  | 10,961 |   |  |  | 734   |   |  |  | 11,695 |  
|                                          |  |       |    |   |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  
|Other comprehensive income for the period |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  |      |   |  |  |     |   |  |  |       |   |  |  | 283   |  |  |  | 283    |   |  |  | 236   |   |  |  | 519    |  
|Societal resolution                       |  |       | (e | ) |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  
|- Legal reserve                           |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  | 38                     |  |  |  |       |   |  |  |      |   |  |  |     |   |  |  | (38    | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Future investments reserve              |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  | 714    |   |  |  |      |   |  |  |     |   |  |  | (714   | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Reversal by investments                 |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  | (2,524 | ) |  |  |      |   |  |  |     |   |  |  | 2,524  |   |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Constitution for new investments        |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  | 2,299  |   |  |  |      |   |  |  |     |   |  |  | (2,299 | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Future dividends reserve                |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  | 225   |   |  |  |     |   |  |  | (225   | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|Dividends in cash                         |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  | (116  | ) |  |  |     |   |  |  |       |   |  |  |      |  |  |  | (116   | ) |  |  | (61   | ) |  |  | (177   | )
|Net income                                |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  |      |   |  |  |     |   |  |  | 458    |   |  |  |      |  |  |  | 458    |   |  |  | 120   |   |  |  | 578    |  
|                                          |  |       |    |   |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  
|Balances as of December 31, 2014          |  |       |    |   |                                             |  | 2,019 |                             |  |  | 1,230                             |  |  |                                                   | 912 |  |                                |  | 44 |                          |  |  | 553                    |  |  |  | 5,432  |   |  |  | 1,159 |   |  |  | (693 | ) |  |  | 458    |   |  |  | 472   |  |  |  | 11,586 |   |  |  | 1,029 |   |  |  | 12,615 |  
|                                          |  |       |    |   |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  
|Other comprehensive income for the period |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  |      |   |  |  |     |   |  |  |       |   |  |  | 634   |  |  |  | 634    |   |  |  | 582   |   |  |  | 1,216  |  
|Societal resolution                       |  |       | (f | ) |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  
|- Legal reserve                           |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  | 23                     |  |  |  |       |   |  |  |      |   |  |  |     |   |  |  | (23    | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Future investments reserve              |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  | 435    |   |  |  |      |   |  |  |     |   |  |  | (435   | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Reversal by investments                 |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  | (3,853 | ) |  |  |      |   |  |  |     |   |  |  | 3,853  |   |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Constitution for new investments        |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  | 3,716  |   |  |  |      |   |  |  |     |   |  |  | (3,716 | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|- Future dividends reserve                |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  | 137   |   |  |  |     |   |  |  | (137   | ) |  |  |      |  |  |  |       |   |  |  |      |   |  |  |       |  
|Dividends in cash                         |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  | (137  | ) |  |  |     |   |  |  |       |   |  |  |      |  |  |  | (137   | ) |  |  | (26   | ) |  |  | (163   | )
|Net income                                |  |       |    |   |                                             |  |      |                             |  |  |                                  |  |  |                                                   |    |  |                                |  |   |                          |  |  |                       |  |  |  |       |   |  |  |      |   |  |  |     |   |  |  | 853    |   |  |  |      |  |  |  | 853    |   |  |  | 42    |   |  |  | 895    |  
|                                          |  |       |    |   |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  
|Balances as of December 31, 2015          |  |       |    |   |                                             |  | 2,019 |                             |  |  | 1,230                             |  |  |                                                   | 912 |  |                                |  | 44 |                          |  |  | 576                    |  |  |  | 5,730  |   |  |  | 1,159 |   |  |  | (693 | ) |  |  | 853    |   |  |  | 1,106 |  |  |  | 12,936 |   |  |  | 1,627 |   |  |  | 14,563 |  
|                                          |  |       |    |   |                                             |  |       |                             |  |  |                                   |  |  |                                                   |     |  |                                |  |    |                          |  |  |                        |  |  |  |        |   |  |  |       |   |  |  |      |   |  |  |        |   |  |  |       |  |  |  |        |   |  |  |       |   |  |  |        |  



|(a) | Balances due to business combination of companies under common control (Note 2.6.8)
|--- | -----------------------------------------------------------------------------------

|(b) | Note 27.
|--- | --------

|(c) | Note 17.7.
|--- | ----------

|(d) | As required by the Shareholders Meeting of March 21, 2013.
|--- | -----------------------------------------------------------

|(e) | As required by the Shareholders Meeting of March 27, 2014.
|--- | -----------------------------------------------------------

|(f) | As required by the Shareholders Meeting of March 19, 2015.
|--- | -----------------------------------------------------------

The accompanying Notes 1 to 36 are an
integral part of these consolidated financial statements.



F-7



---

##### Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013

(Stated in millions of Argentine pesos)



|                                                                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|----------------------------------------------------------------------------------------- |  | ----- | ---- |  | ---- |  | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                                                                          |  | Notes |      |  | 2015 |  |        | 2014 |  |  | 2013   |  
|Cash provided by (used in) operations:                                                    |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Net income                                                                                |  |       |      |  |      |  | 895    |      |  |  | 578    |   |  |  | 852    |  
|Reconciliation to net cash provided by (used in) operating activities:                    |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Share of profit of equity accounted investments                                           |  |       | 17.3 |  |      |  | 1,290  |      |  |  | 1,735  |   |  |  | 279    |  
|Financial results, net                                                                    |  |       |      |  |      |  | (269   | )    |  |  | (572   | ) |  |  | (419   | )
|Depreciation of property, plant and equipment                                             |  |       | 19   |  |      |  | 2,630  |      |  |  | 2,632  |   |  |  | 2,194  |  
|Abandoned and non-productive well write-downs                                             |  |       | 8    |  |      |  | 83     |      |  |  | 11     |   |  |  | 27     |  
|Contingencies                                                                             |  |       | 9    |  |      |  | 9      |      |  |  | 109    |   |  |  | 103    |  
|Environmental costs                                                                       |  |       | 9    |  |      |  | 29     |      |  |  | 193    |   |  |  | 27     |  
|Cease of operations in Jagüel de los Machos area                                          |  |       | 9    |  |      |  | 121    |      |  |  |       |   |  |  |       |  
|Result from sale of Puesto Hernández                                                      |  |       | 9    |  |      |  |       |      |  |  | (181   | ) |  |  |       |  
|Result from sale of Distrilec S.A.                                                        |  |       | 9    |  |      |  |       |      |  |  |       |   |  |  | 34     |  
|Defined benefit plan and other employment benefits                                        |  |       | 23   |  |      |  | 194    |      |  |  | 120    |   |  |  | 98     |  
|Impairment Colpa y Caranda in Bolivia                                                     |  |       | 9    |  |      |  | 164    |      |  |  | 94     |   |  |  |       |  
|Impairment El Tordillo area                                                               |  |       | 9    |  |      |  | 471    |      |  |  |       |   |  |  |       |  
|Result from sale of Austral Basin                                                         |  |       | 9    |  |      |  | (675   | )    |  |  |       |   |  |  |       |  
|Crude oil transportation agreement with OCP                                               |  |       | 9    |  |      |  | (507   | )    |  |  |       |   |  |  |       |  
|Impairment Santa Cruz II area                                                             |  |       | 9    |  |      |  |       |      |  |  |       |   |  |  | 11     |  
|Income tax                                                                                |  |       | 11   |  |      |  | 971    |      |  |  | 742    |   |  |  | 552    |  
|Accrued interest                                                                          |  |       | 20.3 |  |      |  | 213    |      |  |  | 192    |   |  |  | 212    |  
|Other                                                                                     |  |       |      |  |      |  | (101   | )    |  |  | 110    |   |  |  | 35     |  
|Changes in assets and liabilities:                                                        |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Trade receivables                                                                         |  |       |      |  |      |  | (99    | )    |  |  | (318   | ) |  |  | (271   | )
|Other receivables                                                                         |  |       |      |  |      |  | (1,039 | )    |  |  | (3     | ) |  |  | (298   | )
|Inventories                                                                               |  |       |      |  |      |  | (256   | )    |  |  | (644   | ) |  |  | (294   | )
|Accounts payable                                                                          |  |       |      |  |      |  | 640    |      |  |  | 346    |   |  |  | 241    |  
|Payroll and social security taxes                                                         |  |       |      |  |      |  | (30    | )    |  |  | 150    |   |  |  | 118    |  
|Taxes payable                                                                             |  |       |      |  |      |  | (397   | )    |  |  | (18    | ) |  |  | 161    |  
|Provisions                                                                                |  |       |      |  |      |  | 841    |      |  |  | (61    | ) |  |  | (158   | )
|Dividends collected                                                                       |  |       | 17.4 |  |      |  | 6      |      |  |  | 55     |   |  |  | 23     |  
|Interest paid                                                                             |  |       | 20.3 |  |      |  | (198   | )    |  |  | (181   | ) |  |  | (216   | )
|Income tax paid                                                                           |  |       |      |  |      |  | (747   | )    |  |  | (323   | ) |  |  | (435   | )
|                                                                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Net cash provided by operations                                                           |  |       |      |  |      |  | 4,239  |      |  |  | 4,646  |   |  |  | 2,778  |  
|                                                                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Cash provided by (used in) investing activities:                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Acquisition of property, plant and equipment                                              |  |       |      |  |      |  | (5,474 | )    |  |  | (3,853 | ) |  |  | (2,524 | )
|Sale of interests in companies and oil and gas areas                                      |  |       |      |  |      |  | 792    |      |  |  | 373    |   |  |  | 605    |  
|Net variation in investments other than cash and cash equivalents                         |  |       |      |  |      |  | 32     |      |  |  | 11     |   |  |  | 35     |  
|Financial Trust for Works on Gasoducto Sur (Fideicomiso Financiero de Obra Gasoducto
Sur) |  |       |      |  |      |  | 30     |      |  |  | 39     |   |  |  | 34     |  
|                                                                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Net cash used in investing activities                                                     |  |       |      |  |      |  | (4,620 | )    |  |  | (3,430 | ) |  |  | (1,850 | )
|                                                                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Cash provided by (used in) financing activities:                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Net increase (decrease) in short term loans                                               |  |       | 20.3 |  |      |  | (24    | )    |  |  | (124   | ) |  |  | 96     |  
|Increase in long term loans                                                               |  |       | 20.3 |  |      |  |       |      |  |  |       |   |  |  | 49     |  
|Payment of loans with original long-term maturity                                         |  |       | 20.3 |  |      |  | (46    | )    |  |  | (111   | ) |  |  | (1,302 | )
|Cash dividends paid                                                                       |  |       |      |  |      |  | (163   | )    |  |  | (177   | ) |  |  | (16    | )
|                                                                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Net cash used in financing activities                                                     |  |       |      |  |      |  | (233   | )    |  |  | (412   | ) |  |  | (1,173 | )
|                                                                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Increase (decrease) in cash and cash equivalents                                          |  |       |      |  |      |  | (614   | )    |  |  | 804    |   |  |  | (245   | )
|Cash and cash equivalents at the beginning of the year                                    |  |       |      |  |      |  | 2,278  |      |  |  | 1,193  |   |  |  | 1,260  |  
|Effect of exchange rate change on cash and cash equivalents                               |  |       |      |  |      |  | 565    |      |  |  | 281    |   |  |  | 178    |  
|                                                                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  
|Cash and cash equivalents at the end of the year                                          |  |       | 13   |  |      |  | 2,229  |      |  |  | 2,278  |   |  |  | 1,193  |  
|                                                                                          |  |       |      |  |      |  |        |      |  |  |        |   |  |  |        |  

The accompanying Notes 1 to 36 are an integral part of these consolidated financial statements.



F-8



---

##### Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

AS OF THE YEARS ENDED DECEMBER 31, 2015, 2014 AND 2013

(Stated in millions of Argentine pesos, except as otherwise indicated)

1. General information

1.1. The
Company

Petrobras Argentina is a corporation (sociedad anónima) with its main office located in the Autonomous
City of Buenos Aires, Argentina.

Petrobras Argentinas shares are listed on the Buenos Aires Stock Exchange. Its ADS,
each of them representing 10 Class B common shares of Petrobras Argentina, are listed on the NYSE.

The Company is not
subject to the Optional Statutory System for Binding Public Offering.

1.2. Business of the Company

Petrobras Argentinas business is mainly focused on the energy sector, specifically in oil and gas exploration and
production, refining and distribution, petrochemical activities, electricity and sale and distribution of hydrocarbons. Petrobras Argentina S.A. holds operations in Argentina, Bolivia, Ecuador and Venezuela. The Companys fiscal year ends on
December 31 of each year.

In these consolidated financial statements, Petrobras Argentina and its subsidiaries are
jointly referred to as the Company, the Group or PESA.

The Board of Directors approved
the issuance of these consolidated financial statements (hereinafter financial statements) on March 3, 2016.

1.3.
Controlling Group

Petrobras Participaciones S.L. is the immediate parent company of Petrobras Argentina, with an
ownership interest of 67.2%.

Petrobras Participaciones S.L. is a subsidiary of Petróleo Brasileiro, a Brazilian
company whose business is focused on exploration, production, refining, sale and transportation of oil and its byproducts in Brazil and abroad.

2.
Basis of presentation

2.1. Statement of compliance

These financial statements have been prepared in accordance with IFRS as issued by the IASB.

2.2. Summary of the significant accounting policies

Significant accounting policies adopted in the preparation of these financial statements are described below, which have been
consistently applied in these financial statements.

These accounting policies have been applied consistently by all Group
companies.



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Disclosure of prior periods presentation has been adjusted to achieve
comparability with the current period.

2.2.1. New accounting standards and interpretations issued by the IASB effective as of
December 31, 2015 and adopted by the Company

Annual improvements to IFRSs  2010-2012 and 2011-2013 Cycles

Application of improvements to IFRSs issued did not have an impact on the results of operations or financial position of the
Company; however, additional information regarding the aggregation criteria for operating segments made by the Company was disclosed in Note 2.5.

2.2.2. New accounting standards and interpretations issued by the IASB that are not effective as of December 31, 2015, and have not
been early adopted by the Company

IAS 1 Presentation of Financial Statements

In December 2014, the IASB amended IAS 1 Presentation of Financial Statements providing a new guidance for the
presentation of Financial Statements. The amendments are effective for annual periods beginning on or after January 1, 2016. Earlier application is permitted.

The Company believes that the application of the same will not impact significantly on the presentation of financial
statements.

IAS 27 Separate Financial Statements

In August 2014, the IASB amended IAS 27 Separate Financial Statements. The amendments allow the use of the equity
method to account as it is described in IAS 28 for investments in subsidiaries, joint ventures and associates and are effective for annual periods beginning on or after January 1, 2017. Earlier application is permitted.

The Company uses the equity method to account for investments in subsidiaries, joint ventures and associates in the preparation
of the separate financial statements according to Technical Resolution No. 26 issued by the FACPCE. Therefore, the application of the amendment will not impact the results of operations or the financial position of the Company.

IFRS 9 Financial Instruments

In July 2014, the IASB issued a new version of IFRS 9 Financial Instruments which supersedes previous versions and
sets out new requirements for the classification and measurement of financial assets and liabilities, effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

The Company is currently analyzing the impact of the application of IFRS 9. However, it is estimated that its application will
not have a significant impact on the results of operations or the financial position of the Company.

IFRS 15 Revenues from
contracts with Customers

In May 2014, the IASB issued IFRS 15 Revenues from contracts with
Customers, later, in September 2015, amended the effective date for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

It addresses the principles for recognizing revenue and establishes the requirements for reporting about the nature, amount,
timing and uncertainty of revenue and cash flows arising from a contract with a customer.

The basic principle implies the
recognition of revenue that represent the transfer of goods or services to customers at an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services.

The Company is currently analyzing the impact of IFRS 15. However, it is estimated that this standard will not significantly
impact the results of operations or the financial position of the Company.



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Improvements to IFRSs  2012-2014 Cycle

In September 2014, the IASB published amendments to the IFRSs that are applicable for periods beginning on or after
January 1, 2016. Earlier application is permitted.

The Company estimated that these amendments will not have an
impact on the results of operations or the financial position of the Company.

2.3. Consolidation and interests in other companies

2.3.1. Investments in related companies

2.3.1.1. Subsidiaries

Subsidiaries are entities over which the Company exercises control as a consequence of their exposure or rights to variable
returns and their ability to influence them through its power to direct the relevant activities, including generally a shareholding of more than half of the voting rights.

Subsidiaries are fully consolidated as from the date on which control is transferred to the Company. They are deconsolidated
from the date that control ceases.

Since the functional currency of some subsidiaries is different from the functional
currency of the Company, exchange gains or losses arise from intercompany operations. Those exchange results are included in Financial results in the Consolidated Statement of Income.

The accounting policies of subsidiaries have been changed as deemed necessary for consistency with the accounting policies
adopted by the Company.

Petrobras Argentina has consolidated line by line its financial statements with those of companies
over which it exercises control.

For consolidation of subsidiaries, the amount of the investment and the share in their
profit or loss and cash flows are replaced by the aggregate assets, liabilities, income (loss) and cash flows of such subsidiaries, while the non-controlling interest is reflected separately. The intercompany receivables, payables and transactions
within the consolidated group are eliminated in the consolidation. The unrealized intercompany gains or losses from transactions within the consolidated group have been completely eliminated.

2.3.1.2. Interest in joint arrangements

A joint arrangement is a contractual agreement whereby two or more parties engage joint control. Joint control exists only when
decisions relating to the relevant activities require the unanimous consent of the parties sharing control.

A joint
operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement.

2.3.1.2.1. Joint ventures

Investments in joint ventures are initially recognized at cost and are subsequently measured under the equity method.

As of December 31, 2015, 2014 and 2013, the Company exercises joint control over CIESA.

The intercompany gains or losses from transactions between the Company and entities under joint control are eliminated
proportionally to the Companys interest in such companies.

The accounting policies of entities under joint control
were changed as deemed necessary for consistency with the accounting policies adopted by the Company.



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The carrying value of investments in joint ventures, which is considered a
cash-generating unit, is assessed for impairment when facts or changes in circumstances indicate that the book value could not be recoverable and, if applicable, an impairment loss is recorded.

2.3.1.2.2. Joint operations

The Company recognizes its proportionate interest in the joint operations assets, liabilities, revenues, costs and expenses
related to its participation in joint operations in different consortia and joint operations for exploration and production of hydrocarbons.

2.3.1.3. Associates

Associates are entities over which the Company has significant influence but not control, generally representing a shareholding
of between 20% and 50% of the voting rights. Investments in associates are initially recognized at cost, including goodwill recognized at the acquisition date and subsequently measured under the equity method.

The intercompany gains or losses from transactions between the Company and associates are eliminated proportionally to the
Companys interest in such companies.

The accounting policies of associates have been changed as deemed necessary for
consistency with the accounting policies adopted by the Company.

The carrying value of investments in associates, each of
which is considered a cash-generating unit, is assessed for impairment when facts or changes in circumstances indicate that the book value could not be recoverable and, if applicable, an impairment loss is recorded.

2.3.1.4. Business combination

The Company applies the acquisition method to account for business combinations. The acquisition cost is determined as the fair
value of the assets transferred, equity instruments issued and debt assumed at acquisition date. Costs directly attributable to acquisition are charged to income as incurred.

A non-controlling interest in the acquired company is measured at fair value at acquisition date or on the basis of the
proportional value of net assets acquired. The excess of acquisition cost and the non-controlling interest amount in the acquired company over net identifiable assets is recorded as goodwill. If this amount is lower than fair value of net assets
acquired, the difference is recognized in the Consolidated Statement of Income.

Business combinations between companies
under common control are accounted for considering the book value of the acquired company in the holding company. The difference between the price paid and the carrying amount mentioned before is recorded in equity (Other Note 2.6.8).
The transaction costs are expensed in the period in which they accrue.

2.3.2. Financial information

In preparing these financial statements, the financial information of companies over which the Company exercises control, joint
control and associates as of December 31, 2015, 2014 and 2013, or the best available financial information as of those dates, adapted to an equal period of time, was used. Adjustments have also been considered.



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2.4 Translation of foreign operations

The main considerations of translation into presentation currency are shown below.

2.4.1. Functional and presentation currency

The financial information of PESAs entities was prepared in their functional currency, that is, the currency of the
primary economic environment in which the entity operates.

The functional and the presentation currency of Petrobras
Argentinas financial statements is the Argentine peso. The Company has evaluated and concluded that the date of the financial statements are not met the conditions set out in IAS 29 Financial reporting in hyperinflationary
economies to consider Argentina as a hyperinflationary economy. These conditions include the cumulative inflation for the last three years approaches or exceed 100%. At the date of issuance of these financial statements, this pattern, measured
as the variation in the rates published by the National Institute of Statistics and Censuses price it is not reached. Therefore, these financial statements have not been restated.

2.4.2. Outstanding balances and transactions

Foreign currency transactions are remeasured into the functional currency using the exchange rates prevailing at the date of
the transaction.

Foreign exchange gains and losses resulting from settlement of such operations or from remeasurement at
year-end of monetary assets and liabilities denominated in foreign currency are recognized in the Consolidated Statements of Income, except for cash flow or net investment hedges that qualify for exposure as Other comprehensive income
(Note 2.6.8).

2.4.3. Subsidiaries and associates

The results and financial position of subsidiaries and associates that have a different functional currency from PESAs
presentation currency are translated into the presentation currency as follows:



| |  |  | the assets and liabilities are translated using the closing exchange rate;
| | - |  | --------------------------------------------------------------------------



| |  |  | the gains or losses are translated using the exchange rates prevailing at the date of the transactions.
| | - |  | -------------------------------------------------------------------------------------------------------

The results from the remeasurement process into the functional currency are recorded in line Financial results of
the Consolidated Statement of Income.

The results from the remeasurement process into the functional currency to
presentation currency transactions are recognized in Other Comprehensive Income. When an investment is sold or disposed of, in whole or in part, the related exchange differences are recognized in the Consolidated Statement of Income as
part of the gain/loss on the sale or disposal.

2.5. Operating Segments Reporting

The Company has adopted IFRS 8Segment Reporting, which states that those business segments are identified on the basis of
internal reports about components of the Company reviewed regularly by the Board Committee, chief operating decision maker in order to allocate resources and evaluate their performance.

In segmentation the Company considers transactions with third parties and intercompany operations, which are valued as defined
by internal transfer prices between segments, with verification methodologies based on market parameters.

In the
aggregation of segments, Management of the Company has primarily considered the nature of the regulatory framework of the Energy Industry in Argentina and product integration in the Companys production process.



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The Companys business is mainly focused on the energy sector, basically
through its activities relating to oil and gas exploration and production, refining and distribution, petrochemicals and gas and energy. Accordingly, the identified operating segments are as follows:

(a) Oil and Gas Exploration and Production, composed of Companys participation in oil and gas blocks and its interest in
Oleoductos del Valle S.A., OCP, direct and indirect interest in mixed companies in Venezuela and PELSA, consolidate company as of June 1, 2012.

(b) Refining and Distribution, including Companys own operations in Bahía Blanca refinery and gas stations
network, Companys equity interest in Refinería del Norte S.A. and commercialization of oil produced in Argentina, which is transferred at market prices from the Oil and Gas Exploration and Production operating segment. Aggregation of
refining and distribution segments responds primarily to the confluence of a common strategy in line with vertical integration of the Companys operations according to industry regulations aimed at ensuring the supply of the domestic market.

(c) Petrochemicals, includes styrenics operations and catalytic reformer plant operations developed in Argentina.

(d) Gas and Energy, comprising Companys own operations relating to the sale of gas produced in Argentina and gas and
liquefied petroleum gas brokerage activities, its interest in TGS, the electricity generation activities of Genelba Power Plant and of Pichi Picún Leufú Hydroelectric Complex, and its interest in Enecor. Aggregation of gas and energy
segments responds primarily to the confluence of a common strategy to maximize profitability and ensure self-supply.

The
liquids obtained from the processing of oil and gas are produced in the business segments of Exploration and Production of Oil and Gas, Refining and Distribution and Petrochemicals. Until the year ended December 31, 2013, the sales of these
products was on the segment Gas and Energy, and from January 1, 2014, such sales were decentralized in each of the segments where they are produced.

(e) Assets and operating income related to the Central Service Structure, includes those that are not attributable to any other
operating segment and intercompany eliminations are collectively shown.

In the Central Service Structure includes common
costs to individual business segments, among others, management fees, tax on financial transactions, financial liabilities and interest income tax, which are incurred by the Company in the ordinary course of its operations and control economy that
are managed from the central structure and not reappropriate between operating segments.

2.6. Basis of measurement

The main measurement criteria used in the preparation of these financial statements are as follows:

2.6.1. Financial instruments

2.6.1.1. Classification of financial assets

The Company classifies its financial assets as follows:

Financial assets at fair value through profit or loss

This category includes financial assets acquired or held for trading or sale in the short term or those so designated by
Management. Gains and losses derived from changes in fair value are recognized in the Consolidated Statement of Income.

Within this category, the Company has mutual funds which are measured at the fair value of those funds at each reporting date.

Loans and Receivables

Loans and receivables are non-derivatives financial instruments with fixed or determinable payments that are not quoted in an
active market. They are initially recognized at fair value plus any directly attributable transaction cost. After initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less impairment loss, if
applicable. Gains and losses derived from the use of the interest method are recognized in the Consolidated Statement of Income under Financial Results.



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Also, the fair value of current bank and financial debt does not differ
significantly from their carrying amount as of December 31, 2015, 2014 and 2013.

Within this category, the Company
has time deposits, loans to several associates companies, other investments, trade receivables, other receivables, accounts payable and loans.

2.6.1.2. Impairment of financial assets

The Company assesses at each reporting date whether there is objective evidence that a financial asset or group of financial
assets is impaired and if so, an impairment charge is recorded under Other operating income (expense).

In the
years ended December 31, 2015, 2014 and 2013, impairment charges of financial assets related to the allowance for doubtful accounts are indicated in Note 14.

2.6.1.3. Cash and cash equivalents

Cash and cash equivalents include cash on hand, term deposits and other short-term highly liquid investments with original
maturities of three months or less, subject to an insignificant risk of change in value.

Bank overdrafts are accounted for
within Loans in current liabilities in the Consolidated Statement of Financial Position. For purposes of the cash flow statement, bank overdrafts are part of the cash equivalents.

2.6.1.4. Trade receivables and accounts payable

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective
interest method, net of an allowance for doubtful accounts, if applicable.

The amortized cost of trade receivables, other
receivables, other long-term investments, accounts payable and other payables approximates to its fair value.

An allowance
for doubtful accounts is recognized when there is objective evidence that the Company will not be able to collect its receivables at their original maturities or for the full amount. To the recognition of allowance for doubtful accounts, the Company
evaluates different factors, including the customers credit risk, historical trends and other relevant information. This evaluation may require future adjustments if economic conditions substantially differ from the assumptions made. The
amount of the allowance is the difference between the book value of the asset and the present value of the estimated future cash inflow, discounted at the effective interest rate. The asset is presented net of the allowance for doubtful accounts, if
applicable. The loss from doubtful accounts is recognized in the Consolidated Statement of Income under Administrative and selling expenses.

Accounts payable are initially recognized at fair value and subsequently measured at amortized cost using the effective
interest method.

2.6.1.5. Accounting for derivative financial instruments

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.

Changes in the measurement of
derivative financial instruments designated as effective cash flow hedges are recognized under Other comprehensive income in Equity (see Note 2.6.1.7). Changes in the measurement of derivative financial instruments that do
not qualify for hedge accounting or are not designated as hedges are recognized in the Consolidated Statement of Income under Financial results.

As of December 31, 2015, the Company maintains derivative financial instruments of USD 48; gains of 59 derived of the use
of derivative financial instruments during 2015 were recognized in the Consolidated Statement of Income under Financial Results.

As of December 31, 2014 and 2013, the Company did not maintain relevant derivative financial instruments, and no
significant charges were recorded in results for this type of operations in the fiscal years then ended.



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2.6.1.6. Loans

Loans are initially recognized at fair value net of incurred transaction costs. Subsequently, they are carried at amortized
cost using the effective interest method. Any difference between the proceeds (net of transaction costs) and redemption value is recognized in the Consolidated Statement of Income throughout the life of the loans using the effective interest method.

The loans are classified as current liabilities unless the Company has the right to defer settlement of the liability by
at least twelve months following the reporting date.

2.6.1.7. Hedge Accounting

A hedge qualifies for hedge accounting only if at the inception there is formal designation and documentation of the hedging
relationship and the risk management objective and the strategy for undertaking the hedge.

Hedging relationships are of
three types: (i) fair value hedge: a hedge of the exposure to changes in fair value of the total or identified portion of a recognized asset or liability or an unrecognized firm commitment, that is attributable to a particular risk;
(ii) cash flow hedge: a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction; and (iii) hedge of a net
investment in a foreign operation: a hedge of the amount of the entitys interest in the net assets of that operation.

If a relationship qualifies for fair value hedge accounting, the gain or loss from remeasuring the hedging instrument and the
hedge item at fair value shall be recognized in profit or loss.

If a relationship qualifies for cash flow hedges
accounting, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge shall be recognized in other comprehensive income; and shall be reclassified to profit or loss as in the same period which the hedged
cash flows affect profit or loss. The ineffective portion of the gain or loss on the hedging instrument shall be recognized in profit or loss.

A hedge is considered effective when originally, as in the rest of life, its changes offset from eighty and a hundred twenty
five percent change in the opposite direction of the hedged item. In this regard, the Company excludes the specific component attributable to time value of an option in the measurement of the effectiveness of the instruments that qualify for hedge
accounting.

In case the hedging instrument expires or is sold, terminated or exercised, or no longer meets the criteria
for hedge accounting or the entity revokes the designation, the cumulative gain or loss that has been recognized in other comprehensive income shall remain separately in equity until the forecast transaction occurs. If the forecast transaction is no
longer expected to occur, the cumulative gain or loss on the hedging instrument that has been recognized in other comprehensive income shall be reclassified to profit or loss.

If a relationship qualifies for hedge of a net investment in a foreign operation accounting, the portion of the gain or loss on
the hedging instrument that is determined to be an effective hedge shall be recognized in other comprehensive income and shall be reclassified to profit or loss on the disposal or partial disposal of the foreign operation. The ineffective portion
shall be recognized in profit or loss.

As of December 31, 2015, 2014 and 2013, the Company has designated a
significant portion of its debt (mainly long-term debt) in dollars (non-derivative financial instruments) as hedging instruments of the net investment in foreign operations (activities that are based or conducted in a different country or currency)
to reflect the natural hedge effect over changes in the exchange rate between a significant portion of the debt denominated in dollars and the entitys interest in the net assets of those operations.



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2.6.2. Other receivables and payables

Other receivables and payables have been initially recognized at fair value and subsequently measured at their amortized cost
using the effective interest method. In addition, Other receivables includes, among others, advances to suppliers measured on the basis of the amounts actually disbursed.

2.6.3. Inventories

This line item includes crude oil stock, raw materials, work in progress and finished products relating to the Refining and
Distribution, Petrochemicals and Gas and Energy business segments.

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 Consolidated Statement of Income when the inventories are overstated.

2.6.4. Property, plant and equipment

2.6.4.1. General principles

Property, plant and equipment, except as indicated below, is measured following the cost model. Any expenditure subsequent to
the original recognition of the asset is added as a component of the asset only when the expenditure improves its condition and it is probable that future economic benefits, in excess of the originally assessed ones, will be generated by such asset
or when the expenditure relates to recognize a major repair or overhaul of the asset which is conducted to allow the continued use of the asset, provided: (i) such expenditure is allocated to the replacement of the component parts of the asset,
(ii) the useful life of such component parts has been calculated based on their own wear and tear or depletion and (iii) it is probable that future economic benefits will flow as a result of the expenditure.

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. In 2015, 2014 and 2013 no borrowing costs were capitalized.

Property, plant and equipment related to foreign operations have been translated into the functional currency at
historical exchange rates, and they have been translated into pesos at the closing exchange rates.

2.6.4.2. Oil and gas exploration and
production activities

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.

According to the successful efforts method of accounting, exploration 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.



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The initial estimated asset retirement obligations in hydrocarbons areas,
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.

2.6.4.3. Depreciation

The Company 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.

The Companys remaining items of property, plant and
equipment are depreciated by the straight-line method based on estimated useful lives, as detailed below:



|                                |  |                      |  |                  
|------------------------------- |  | -------------------- |  | -----------------
|Property, plant and equipment   |  | Years of useful life |  | Depreciation rate
|Machinery, tools and equipments |  | 5 - 20               |  | 5% - 20%         
|Electricity generation plants   |  | 25 - 33              |  | 3% - 4%          
|Industrial complex              |  | 25                   |  | 4%               
|Others                          |  | 3 - 50               |  | 2% - 33%         

The depreciation method is reviewed at each year-end. If expectations differ from previous
estimates, adjustments are made prospectively at closing of each year, if applicable.

Petrobras Argentina depreciates,
using the straight-line method, each significant component of the assets not related to oil and gas production areas that: (i) is identifiable as an independent component with a significant cost in relation to the total value of the asset, and
(ii) has an operating useful life that differs from another significant part of the same asset.

2.6.4.4. Impairment of
nonfinancial assets

The carrying value of property, plant and equipment does not exceed their recoverable value.
The Companys Management assesses the recoverability of property, plant and equipment items whenever events or changes in circumstances (including significant decreases in the market value of assets, in the prices of the main products sold by
the Company or in oil and gas reserves, as well as changes in the regulatory framework for the Companys activities, significant increases in operating expenses, or evidence of obsolescence or physical damage) indicate that the carrying amount
may not be recoverable. The book value of an asset is adjusted down to its recoverable value if its carrying amount exceeds the latter.

From a regulatory standpoint, recoverable amount is defined as the higher of fair value less costs of disposal and value in
use, the latter is defined as the addition of the discounted expected net cash flows that arise as a direct result of the use and eventual final disposition of the assets. For that purposes, among other elements, the assumptions that represent the
best estimate made by Management of the economic conditions that will prevail throughout the useful life of the assets are considered.

Discount rates used to calculate the value in use are the respective WACC. For each asset or cash generating unit a specific
WACC was determined which considered the business segment and the country conditions where the operations are performed.

In subsequent periods, the reversal of the impairment charge is evaluated if there are changes in the assumptions used to
determine the asset recoverable value. In such a case, the book value of the asset or cash generating unit is written up to the lower of: a) the book value that the asset or cash generating unit would have had if the impairment had never been
recognized; and b) its recoverable value.



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As of December 31, 2015, 2014 and 2013, the Company recognized an impairment
charge of 635, 94 and 11 on property, plant and equipment (Note 19), respectively.

2.6.5. Labor costs liabilities

Labor costs liabilities are accrued in the periods in which the employees provide the services that trigger the consideration.

The cost of defined contribution plans is periodically recognized in accordance with the contributions made by Petrobras
Argentina.

For purposes of determining the estimated cost of post-retirement benefits granted to employees, the Company
has used actuarial calculation methods, making estimates with respect to applicable demographic and financial variables. The amount recognized as liability attributable to such benefits represents the addition of the present value of the obligation,
net of the present value of the assets of the plan, with which the obligations will be settled.

Actuarial gains and losses
are recognized in Other comprehensive income and costs of services provided in the past in the consolidated statement of income.

2.6.6. Taxes payable

2.6.6.1. Income tax

Income tax expense for the year comprises current and deferred tax and is recognized in the Consolidated Statement of Income,
except to the extent it relates to items recognized in the Consolidated Statement of Comprehensive Income. In this case, the corresponding tax effect is also recognized in such statement.

The current income tax expense is calculated on the basis of the tax laws in force or in process of enactment at the reporting
date in the countries where the Companys subsidiaries operate and generate taxable income. The Companys management periodically evaluates criteria adopted in tax returns as regards situations in which applicable tax regulation is subject
to interpretation and sets up provisions where appropriate.

The Company accounts for the deferred tax balance using the
liability method, which establishes the determination of net deferred tax assets and liabilities on the basis of temporary differences between the accounting and tax measurement of assets and liabilities. Temporary differences result in the
recognition of tax assets and liabilities when their future reversal decreases or increases the taxes to be determined, without affecting the compensation of the pertinent amounts. The Company recognizes deferred tax assets if, and only if, it is
considered probable that there will be sufficient future taxable profit against which the tax loss could be used.

Deferred
assets and liabilities are measured at the tax rate that is expected to be applicable in the period when the asset will be realized or the liability settled, on the basis of the tax rates in force or in process of enactment at the reporting date.

Deferred tax assets and liabilities are offset by company if there is a legally enforceable right to set off tax assets
and liabilities and if the deferred income tax is related to the same tax authority.

The deferred tax assets and
liabilities are stated at their nominal value.

Income tax rates prevailing at year-end in Argentina, Venezuela, Ecuador,
Bolivia and Spain are 35%, 50%, 22%, 25% and 28%, respectively. Additionally, payment of Bolivian-source income to beneficiaries outside Bolivia is levied with a 12.5% withholding income tax.



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2.6.6.2. Minimum presumed income tax

In Argentina, the minimum presumed income tax is supplementary to income tax, since while the latter is levied on the taxable
income for the year, the minimum presumed income tax is a minimum tax levied on the potential income of certain productive assets at the rate of 1%, so that the Companys final liability will be equal to the higher of both taxes. However, if
the minimum presumed income tax exceed the calculated income tax in any given year, such excess may be applied to reduce any excess of income tax over the minimum presumed income tax in any of the ten succeeding years.

In the years ended December 31, 2015, 2014 and 2013, income tax expenses were higher than minimum presumed income tax.
Therefore, the Company only recorded income tax expense.

2.6.6.3. Hydroelectric royalties

For the operation of Pichi Picún Leufú Hydroelectric Complex, the Company pays hydroelectric royalties of 12% of
the amount resulting from applying the rate for the bulk sale to the power sold under the terms of Section No. 43 of Law No. 15,336, as amended by Law No. 23,164. In addition, the Company is subject to a monthly license fee payable to
the Federal Government for the use of the power source equivalent to 0.5% of the same basis used for the calculation of the hydroelectric royalty.

2.6.6.4. Withholdings on exports of hydrocarbons

The Public Emergency and Exchange System Reform Law No. 25,561 established the creation of a system of withholdings on
exports of hydrocarbons for five years from March 1, 2002, which was subsequently extended for five years by Law No. 26,217. The effect of such withholdings is deducted from the respective selling prices.

Crude Oil

Effective since November 2007, Resolution No. 394/07 issued by the Ministry of Economy and Production established a new
method for calculating withholdings on exports of crude oil, and gave equivalent treatment to certain oil related products. This amendment results in the application of a variable export withholding based on a formula that considers the
international price of crude oil and a cut-off price by product. Under this method, when the international (quoted) price of crude oil exceeds USD 60.90 per barrel, an increasing withholding rate is set for crude oil exports that results in a
price cap of USD 42 per barrel of standard-quality crude oil. When the international price of crude oil dips below USD 45 per barrel, the regulations call for the authorities to determine a new applicable withholding rate within 90 days.
The same rules apply to exports of refined products such as gasoline, fuel oil and lube oils, for which different cut-off and reference prices were defined. On January 3, 2013 the Ministry of Economy and Public Finance, by Resolution
No. 01/13, proceeded to modify the methodology for the calculation of taxes on exports of crude oil by increasing the reference value at USD 80 per barrel and cutoff value at USD 70 per barrel.

In October 2014, through Resolution No. 803/14, the Ministry of Finance amended Resolution No. 394/07 and modified
the withholding tax on hydrocarbon exports linking the rate (ranging from 10% to 13%) to a specific price schedule.

On
January 1, 2015 Resolution No. 1,077/14 of the Ministry of Economy and Public Finance came into effect. This resolution supersedes Resolution No. 394/07 as amended by Resolution No. 803/14 and provides that for so long as the
International price of crude oil is less than USD 71 per barrel the withholding tax rate shall be 1%, and incremental tax rates will apply for so long as the international price of crude oil is equal or higher than USD 71 per barrel.

In December 2015, through Resolution No. 160/15, the Ministry of Production established a 0% rate on exports of derivative
products, such as rubber, styrene, polystyrene, bops and toluene.



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Natural gas

In March 2008, the Ministry of Economy and Production issued Resolution No.127/08 which, in connection with natural gas,
amended Resolution No. 534/06, whereby a 45% withholding rate was established on the price of the gas imported from Bolivia, and imposed a 100% withholding on natural gas exports, considering for valuation purposes the highest price set for
natural gas under the applicable agreements for natural gas imports into Argentina. In addition, pursuant to such resolution, the methodology for calculating withholdings on exports of crude oil, under Resolutions No. 394/07 and No. 1/13,
was also applied to LPG. During 2015, the Argentine government issued some measures for the LPG market. Resolution 60/15 reduced withholding tax on LPG exports from 45% to 1% and Resolution SE No. 792/15 updated and increases export parity
prices for which the LPG is sold in the local market to customers who are not reached by the New Stabilization Program.

2.6.6.5.
Foreign Exchange Regime  Obligation to exchange into local currency 100% of foreign currency proceeds from exports of crude oil and oil related products

Decree No. 1,722/2010 dated October 25, 2011 reestablished the obligation that all foreign currency proceeds from
exports of crude oil and oil related products, natural gas and liquefied gas must be negotiated in the local exchange market regulated by BCRA.

The decree therefore makes it mandatory for Petrobras Argentina to exchange into local currency 100% of the proceeds of its
exports of goods and services in Argentine.

2.6.6.6. New regulations for hydrocarbon activities in Argentina.

Law No. 26,741 issued in May 2012 declared of public interest and a state priority in the Republic of Argentina the
achievement of self-sufficiency in hydrocarbons supply and the activities of hydrocarbon exploration, exploitation, industrialization, transportation and marketing. In addition, YPF S.A.s and Repsol YPF Gas S.A.s assets were declared of
public interest and subject to expropriation in a fifty one per cent (51%).

By means of Decree No. 1,277 issued in
July 2012, the regulations for the implementation of Law No. 26,741 was approved and Rules of the Argentine Hydrocarbon Sovereignty regime were issued, which established the creation of the Commission of Planning and Strategic Coordination of
the National Hydrocarbon Investments Plan (the Commission) under the Ministry of Economic Development Policy and Planning of the Ministry of Economy and Finance, as well as the National Hydrocarbon Investment Register (the
Register) . Decree No. 1,277/12 established the obligation of Argentine companies in the oil and gas industries to present to the Commission an annual investment plan of exploration and exploitation. The Commission is required to
design a Hydrocarbon National Investment Plan, which seek to maximize investment and sustainability of the industry in the short, medium and long term. In addition, Decree No. 1,277 also derogated certain sections of Decrees No. 1,055/89,
No. 1,212/89 and No. 1,589/89 that provided for the free availability of hydrocarbons produced in concession areas granted, the free commercialization in the domestic and foreign markets and the freedom to set prices.

The Company has complied with all applicable periods information requirements.

In February 2013, by Resolution No. 1/2013, the Commission created the Stimulus Program for Surplus Injection of
Natural Gas (Programa de Estímulo a la Inyección Exedente de Gas Natural), companies can participate enrolling in the Register and submitting projects to increase the total volume of natural gas to be injected into the
domestic market during the proposed period. Once the project is implemented, it provides: a) compensation for injection based on surplus at a price of 7.5 USD / MBTU and b) a fine in the case of the company during a specified period, has not managed
to increase production volumes committed. In order to develop gas fields in Argentina, the Company formalized presentations required for the qualification of Resolution No. 1/2013 and so far the Commission has not issued.



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Additionally, in November 2013, by Resolution No. 60/2013, the Commission
created the Stimulus Program for Surplus Injection of Natural Gas for Companies with Reduced injection (Programa de Estímulo a la Inyección de Gas Natural para Empresas con Inyección Reducida). Producers had
time to present their project to contribute to increase levels of natural gas production until March 31, 2014. The same is aimed at companies without previous production, or capped at 3.5 MMm3/day, with price incentives before increases
production, and LNG import penalties if the companies do not comply with the committed volumes. Also, those companies that were program beneficiaries mentioned in the preceding paragraph and meet the conditions thereof, can request the termination
of its participation in that program and its incorporation into the present. Resolution No.60/2013, as amended (Resolutions No. 22/2014 and No. 139/2014) established a price ranging between 4 USDUSD/MBtu and 7.5 USD/MBtu, according the
higher production curve reached.

On January 30, 2015, registration of the Company to the mentioned program was
admitted through Resolution No. 13/2015 issued by the Secretary of Economic Policy and Development Planning of the Ministry of Economy and Public Finance. During the third quarter of 2015, all additional filings required by such Committee were
submitted and implementation of the program was approved with retroactive effect to July 1, 2014.

In October 2014,
Law No. 27,007 was issued, amending Hydrocarborn Law No. 17,319, which defined and regulated the exploration and exploitation of unconventional hydrocarbons, introduced changes to the extension of concession terms, established a special
royalty system and a system to promote hydrocarbon investments, and prohibited the creation of reserved areas in favor of state-owned corporations or corporations with private controlling interest. In addition, among its temporary provisions, the
law granted a 90-day term to complete the negotiation process to extend existing concessions.

In February, 2015 the
Commission issued Resolution 14/2015 creating the Crude Oil Production Stimulus Program (Programa de Estímulo a la Producción de Petróleo Crudo) providing for export and/or production stimulus payment for
registered companies subject to certain requirements. By Resolution 33/15, the Commission approved the General Regulation Program to Promote Production of Crude Oil.

Subsequently, through Resolution 123/15, the Commission approved the Regulation of Procurement, sales and transfers of
areas, Rights and Participation under the Incentive Program Injection Natural Gas Surplus Stimulus Program and the Gas Injection Natural Reduced injection for Business.

By Decree 272/15, the PEN decided to dissolve the Committee of Strategic Planning and Coordination of the National Hydrocarbon
Investment Plan created by the art. 2 of Regulation Regime Hydrocarbon Sovereignty approved as Annex I of Dec. 1277/12. The powers granted to the Commission shall be exercised by the Ministry of Energy and Mining. The Art. 5 of Decree 272 provides
that acts adopted by the Commission in exercising its powers granted by the Regulation or other regulations retain their validity until the contrary is not provided by specific resolution of the Ministry of Energy and Mining.

The Company, through PELSA, has participated in the Petroleo Plus Program, which established certain incentives for producers.
During the third quarter of 2015, Decree No. 1.330/2015 rendered such Program ineffective and ordered payment of pending incentives by means of Government Bonds BONAD 2018 and BONAR 2024.

On March 9, 2016 the Ministry of Energy and Mining issued Resolution 21/2016 creating an export stimulus program of crude
oil surplus, after domestic demand for crude oil Escalante from the San Jorge Gulf Basin is satisfied, to be in effect from January 1, 2016 to December 31, 2016. The stimulus will be paid for each shipment and to the extent that the
average price of Brent oil does not exceed U.S.$47 per barrel two days before and two day after the shipment. The compensation to be paid by the Argentine government will amount to U.S.$7.50 per barrel, as long as the criteria is met.

2.6.7. Provisions and contingent liabilities

Provisions are liabilities of uncertain timing or amount, that are recognized when: a) the Company has a present obligation
(legal or constructive) as a result of a past event, b) it is probable that an outflow of resources will be required to settle that obligation, and c) a reliable estimate can be made of the amount of the obligation.

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 financial statements based on assumptions and methods considered appropriate. 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.



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Contingent liabilities are: i) 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 ii) 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 recognized. The Company discloses in notes to the 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.

2.6.8. Equity accounts

Except as noted in Retained earnings, the activity in the Equity accounts reflects resolutions adopted by
Shareholders in their meetings, or the effects of the laws or regulations in force.

Capital Stock

The capital stock consists of contributions made by shareholders represented by shares and capitalization of retained earnings,
and comprises outstanding shares at their nominal value issued under Argentine law.

Adjustment to capital stock

Capital stock accounts were restated in constant currency. The capital stock account was kept at nominal value and the
adjustment arising from such restatement is shown under Adjustment to capital stock.

Capital stock adjustment
is not distributable in cash or in goods but may be capitalized through issuance of shares. In addition, this balance may be used to compensate accumulated losses in accordance with the compensation method specified under Retained
earnings.

Additional paid in capital from merger

This account was generated in January 2005 as a result of the merger of Eg3, PAR and Petrolera Santa Fe, whereby all assets,
liabilities, rights and obligations of the absorbed companies were included in the Companys equity and shares of the Company were issued based on the approved share exchange ratio.

Additional paid-in capital on sales of stock of parent

The account additional paid-in capital on sales of stock of parent was generated until 2010, as a result of the sale of shares
of the Company, with sales values greater than their acquisition costs.

During the third quarter of 2010 and in compliance
with the terms and conditions in section 220 of the LSC, the Company sold these treasury shares under the preemptive right provisions set forth in Sections 221 and 194 of the LSC, and subsequently transferred to Optimum Petrobras Trust the remaining
shares of the Company (Note 23.4).

Legal reserve

Pursuant to the provisions of the LSC, the Company is required to set up a legal reserve by providing at least 5% of the
aggregate amount of net income for the year, prior year adjustments, transfers of other comprehensive income to retained earnings and accumulated losses of prior years, when this aggregate amount exceeds zero until the legal reserve equals 20% of
the sum of Capital stock and Adjustment to capital stock balances.

Reserve for future investments

The Companys Shareholders Meeting allocates a specific amount to establish a special Reserve to develop the
Companys investment activities, which are focused on the oil and gas exploration and production business.



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Future dividends reserve

It relates to the amount allocated by the Shareholders to set up a reserve for future dividends. In addition, the Shareholders
delegated on the Companys Board of Directors the determination of the date and amount of the dividend distribution until the following Shareholders Regular Meeting.

Other comprehensive income

It includes: i) the gain and loss from the remeasurement of foreign operations, net of foreign exchange differences arising
from the indebtedness of the Company denominated in foreign currency designated as hedge of the net foreign investment; ii) actuarial gains and losses for defined benefit plans and the related tax effect (Note 27).

Unappropriated retained earnings

This account therefore includes retained earnings carried forward from prior years, amounts transferred from other
comprehensive income and prior year adjustments resulting from the application of IFRS.

General Resolution
No. 593/2011 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.

Distribution of dividends

The cash dividend is recognized as a liability in PESAs financial statements in the year in which they are approved by
the shareholders of the Company.

Other items in Equity

The Other financial statement line corresponds to the amount generated by the acquisition of business combination
of companies under common control determined as the difference between the carrying amount of assets and liabilities at the date of the transaction and the amount paid (see Note 2.3.1.4). Total distributable retained earnings are reduced by the
balance of this item.

2.6.9. Basic and diluted earnings per share

Basic earnings per share are calculated by dividing the amount of income or loss attributable to Shareholders of the Company by
the weighted average number of ordinary shares outstanding during the year.

Since the Company does not have preferred
shares or debt convertible into shares, basic and diluted earnings per share are the same.

2.6.10. Revenue recognition

Revenues from the sale of crude oil, natural gas, petrochemical and refined products are recognized when the products are
delivered. Revenue is measured at the fair value of the consideration received or receivable taking into account the amount of any trade discounts and volume rebates allowed by the entity.

Revenue from the sale of goods is recognized when all the following conditions have been satisfied:



| | (a) | the entity has transferred to the buyer the significant risks and rewards of ownership of the goods;
| | --- | ----------------------------------------------------------------------------------------------------



| | (b) | the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | the amount of revenue can be measured reliably;
| | --- | -----------------------------------------------



| | (d) | it is probable that the economic benefits associated with the transaction will flow to the entity; and
| | --- | ------------------------------------------------------------------------------------------------------



| | (e) | the costs incurred or to be incurred in respect of the transaction can be measured reliably.
| | --- | --------------------------------------------------------------------------------------------



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Revenues from oil and natural gas production in which the Company has a joint
interest with other producers are recognized on the basis of the net working interest, regardless of actual assignment. Any imbalance between actual and contractual assignment will result in the recognition of an amount payable or receivable
according to the actual share in production, whether above or below the production resulting from the Companys contractual interest in the consortium.

The Company performs diesel oil and gasoline sale transactions with other refining companies in different geographical areas to
optimize the logistics chain. These transactions are disclosed on a net basis in the Statement of Income.

Revenues arising
from the rendering of services are measured at the fair value of the consideration received or receivable, taking into account the estimated amount of any discount, thus determining the net amounts. Revenues are recognized when all of the following
conditions are satisfied:



| | (a) | the amount of revenue can be measured reliably;
| | --- | -----------------------------------------------



| | (b) | it is probable that the economic benefits associated with the transaction will flow to the entity;
| | --- | --------------------------------------------------------------------------------------------------



| | (c) | the stage of completion of the transaction at the end of the reporting period can be measured reliably; and
| | --- | -----------------------------------------------------------------------------------------------------------



| | (d) | the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.
| | --- | ----------------------------------------------------------------------------------------------------------

3. Critical accounting judgments and estimates

The preparation of the financial statements in conformity with IFRS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimates are revised and in any future periods affected.

The most significant estimates and
assumptions are described below:

3.1. Oil and gas reserves

Reserves mean 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.

Reserve estimates are adjusted when so justified by changes in the evaluation criteria or at least once a year. These reserve
estimates are based on the reports of oil and gas consulting professionals.

The Company uses the information obtained from
the calculation of reserves in the determination of depreciation of assets used in the areas of oil and gas, as well as assessing the recoverability of these assets (Notes 2.6.4.3., 2.6.4.4., 17.2 and 19).

3.2. Asset retirement obligations

Asset retirement obligations 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. It is worth a mention that 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 when it is justified by changes in the
evaluation criteria or at least once a year.



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3.3. Impairment of non-financial assets

For the purpose of assessing recoverability of non-financial assets, assets are grouped at the lower levels for which there are
individually identifiable cash flows (cash generating units). For this purpose, each associated company and each jointly venture and jointly operations is considered a cash generating unit.

The methodology used for estimating the recoverable amount of assets mainly consists in determining the value in use.

3.4. 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s Management reviews the status of each contingency and assesses potential
financial liability, applying the criteria indicated in note 2.6.7, for which elaborates the estimates mainly with the assistance of legal advisors.

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 to the ultimate resolution of each
contingency, which will be included in the provision if they may be reasonably estimated.

3.5. Environmental costs

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.

3.6. Employment benefit

Actuarial commitments with employee benefit plans 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 pension plan obligations depends on multiple factors that are determined according to actuarial estimates which are revised annually by an independent actuary, 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.



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4. Financial and non-financial equity risk management

4.1. Risk management objectives and policies

In performing its operations, the Company is exposed to some risks associated to the markets in which it operates.

The Company adopts an integrated risk management methodology, which is not focused on the individual risks of the operations of
its business units but on a wider monitoring of risks affecting its entire portfolio.

The Companys risk management
strategy, in line with its business integration strategy, seeks to achieve a balance between profitability goals and its exposure to risk.

The Company and its subsidiaries are not engaged in or trade in derivative financial instruments for speculative purposes.

The Board of Directors establishes the policies for managing each of the risks set out below, which have been applied
consistently in the years included in these financial statements:

4.1.1. Financial risks management

4.1.1.1 Exchange rate risks

The Companys results of operations and financial position are sensitive to changes in the exchange rates between the
currencies in which transactions are carried out and the functional currency of each subsidiary.

The Company is mainly
exposed to changes in the peso exchange rate against the U.S. dollar. Petrobras Argentinas exposure to currencies other than the US dollar is not significant.

The Company uses derivative financial instruments to mitigate the exchange rate risk. associated with exchange rates. During
year 2015, the Company used derivative financial instruments; derived gains of 59 were recognized in the Consolidated Statement of Income under Financial Results. During the years 2014 and 2013, the Company used derivative financial
instruments, which did not produce significant results.



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The carrying amounts of assets and liabilities denominated in foreign currencies
at the end of each fiscal year are as follows:



|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|------------------------- |  | ------------------------- |  |  | ------------ |  |  | ------------------------- | ----- | ----- |  |  | ----- | ------------------------- |  |  | -------------------------------- |  |  | ------------------------- |  |  | ----- |  | ----- |  | ----- |  |  |  | ----- | 
|                          |  | Foreigncurrency andamount |  |  | Exchangerate |  |  | Bookvalue inlocalcurrency |       |       |  |  |       | Foreigncurrency andamount |  |  | Exchangerate                     |  |  | Bookvalue inlocalcurrency | 
|CURRENT ASSETS            |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  | CURRENT LIABILITIES              |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|Cash and cash equivalents |  | USD                       |  |  | 122.5        |  |  |                           | 13.04 |       |  |  | 1,597 |                           |  |  | Accounts payable                 |  |  | USD                       |  |  | 180.3 |  |       |  | 13.04 |  |  |  | 2,352 | 
|                          |  | EU                        |  |  | 0.2          |  |  |                           | 14.21 |       |  |  | 3     |                           |  |  |                                  |  |  | EU                        |  |  | 0.9   |  |       |  | 3.00  |  |  |  | 3     | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | Bol                       |  |  | 3.0          |  |  |                           | 2.07  |       |  |  | 6     |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  | 2,355 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  | 1,606 |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  | Short-term debt                  |  |  | USD                       |  |  | 2.7   |  |       |  | 13.04 |  |  |  | 36    | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|Trade receivables         |  | USD                       |  |  | 33.9         |  |  |                           | 13.04 |       |  |  | 442   |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  | Payroll and social securitytaxes |  |  | USD                       |  |  | 0.1   |  |       |  | 13.04 |  |  |  | 1     | 
|Other receivables         |  | USD                       |  |  | 129.9        |  |  |                           | 13.04 |       |  |  | 1,694 |                           |  |  |                                  |  |  | $ Bol                     |  |  | 16.2  |  |       |  | 1.87  |  |  |  | 30    | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | Bol                       |  |  | 29.2         |  |  |                           | 2.07  |       |  |  | 60    |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  | 31    | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | $Bol                      |  |  | 11.3         |  |  |                           | 1.87  |       |  |  | 21    |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  | 1,755 |                           |  |  | Taxes payable                    |  |  | USD                       |  |  | 0.5   |  |       |  | 13.04 |  |  |  | 6     | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  | Provisions                       |  |  | USD                       |  |  | 115.2 |  |       |  | 13.04 |  |  |  | 1,502 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | TOTAL 12/31/2015          |  |  |              |  |  |                           |       | 3,823 |  |  |       |                           |  |  | TOTAL 12/31/2015                 |  |  |                           |  |  |       |  | 3,930 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | TOTAL 12/31/2014          |  |  |              |  |  |                           |       | 2,234 |  |  |       |                           |  |  | TOTAL 12/31/2014                 |  |  |                           |  |  |       |  | 2,525 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | TOTAL 12/31/2013          |  |  |              |  |  |                           |       | 1,996 |  |  |       |                           |  |  | TOTAL 12/31/2013                 |  |  |                           |  |  |       |  | 1,762 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|NON-CURRENT ASSETS        |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  | NON CURRENTLIABILITIES           |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|Trade receivables         |  | USD                       |  |  | 0.4          |  |  |                           | 13.04 |       |  |  | 6     |                           |  |  | Long-term debt                   |  |  | USD                       |  |  | 299.8 |  |       |  | 13.04 |  |  |  | 3,910 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|Other receivables         |  | USD                       |  |  | 5.4          |  |  |                           | 13.04 |       |  |  | 70    |                           |  |  | Provisions                       |  |  | USD                       |  |  | 142.8 |  |       |  | 13.04 |  |  |  | 1,862 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  | Bol                       |  |  | 3.8   |  |       |  | 2.07  |  |  |  | 8     | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|Other investments         |  | USD                       |  |  | 20.0         |  |  |                           | 13.04 |       |  |  | 261   |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  | 1,870 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | TOTAL 12/31/2015          |  |  |              |  |  |                           |       | 337   |  |  |       |                           |  |  | TOTAL 12/31/2015                 |  |  |                           |  |  |       |  | 5,780 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | TOTAL 12/31/2014          |  |  |              |  |  |                           |       | 180   |  |  |       |                           |  |  | TOTAL 12/31/2014                 |  |  |                           |  |  |       |  | 4,647 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | TOTAL 12/31/2013          |  |  |              |  |  |                           |       | 295   |  |  |       |                           |  |  | TOTAL 12/31/2013                 |  |  |                           |  |  |       |  | 3,906 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|TOTAL ASSETS              |  | TOTAL 12/31/2015          |  |  |              |  |  |                           |       | 4,160 |  |  |       | TOTAL LIABILITIES         |  |  | TOTAL 12/31/2015                 |  |  |                           |  |  |       |  | 9,710 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | TOTAL 12/31/2014          |  |  |              |  |  |                           |       | 2,414 |  |  |       |                           |  |  | TOTAL 12/31/2014                 |  |  |                           |  |  |       |  | 7,172 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 
|                          |  | TOTAL 12/31/2013          |  |  |              |  |  |                           |       | 2,291 |  |  |       |                           |  |  | TOTAL 12/31/2013                 |  |  |                           |  |  |       |  | 5,668 | 
|                          |  |                           |  |  |              |  |  |                           |       |       |  |  |       |                           |  |  |                                  |  |  |                           |  |  |       |  |       |  |       |  |  |  |       | 



|USD | Millions United States Dollars (a)
|--- | ----------------------------------

|EU | Millions Euros (a)
|-- | ------------------

|$Bol | Millions Bolivian Pesos (b)
|---- | ---------------------------

|Bol | Millions Bolivares (b)
|--- | ----------------------



|(a) | As of December 31, 2015 according to exchange rate released by the National Bank of Argentine.
|--- | ----------------------------------------------------------------------------------------------

|(b) | As of December 31, 2015 according to exchange rate released by the National Bank of Bolivia and Central Bank of Venezuela, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------

The Company has designated a significant portion of its debt as hedge of investment in foreign currency, as a consequence, the
Company has a net liability financial position in foreign currency of USD 14 million as of December, 31, 2015 and a net asset financial position in foreign currency of USD 70 million and USD 124 million as of December 31, 2014
and 2013, respectively. Exchange differences generated by the debt designated as hedge are recognized in Other comprehensive income (see Note 2.6.1.7).



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##### Table of Contents

Exchange rate sensitivity analysis

Considering the net monetary position, investments in companies with dollar debts and investments with a functional currency
other than Argentine peso December 31, 2015, Management estimated that for every increase or decrease in the exchange rate of 20% against the dollar US would result in:



| | - | a gain or loss by Foreign exchange before taxes 36 respectively,
| | - | ------------------------------------------------------------------

| | - | an increase or decrease of 65 in Other comprehensive income, respectively, for the conversion of transactions denominated in foreign currency, net debt designated as a hedge,
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | a gain or loss of 70 results valued under the equity method investments, respectively, for the shareholding in CIESA which has a net liability position in foreign currency,
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | and a loss or gain of 180 in the Income taxes, net of attributable to non-controlling interests, respectively, for the conversion of operations with functional currency other than the weight.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

This sensitivity analysis does not represent the inherent risk.

At December 31, 2014, Management estimated that for every increase or decrease in the exchange rate of 20% against the US
dollar would result in: (i) a gain or loss Foreign exchange before taxes of 120, respectively; (Ii) an increase or decrease of 19 in Other Comprehensive Income; (Iii) a loss or gain of 85 Share of profit of
equity-accounted investments, respectively; and (iv) a loss or gain of 110 in the Income taxes, net of attributable to non-controlling interests, respectively.

At December 31, 2013, Management estimated that for every increase or decrease in the exchange rate of 20% against the US
dollar would result in: (i) a gain or loss Foreign exchange before taxes of 160 respectively; (Ii) an increase or decrease of 130 in Other comprehensive income, respectively; (Iii) a loss or gain of 75 Share of
profit of equity-accounted investments, respectively, and (iv) a loss or gain of 80 in the Income taxes, net of Profit attributable to the non-controlling interest, respectively.

4.1.1.2 Interest rate risks

Management of interest rate risk aims at reducing financial costs and the Companys exposure to interest rate increases.

As of December 31, 2015, 2014 and 2013 approximately 99%, 98% and 90%, respectively, of our total financial debt was
subject to fixed interest rates while the remaining portion was subject to variable interest rates. Information regarding the financing of the Company and related interest rates is included in Note 20.

During the years ended December 31, 2015, 2014 and 2013, Petrobras Argentina was not engaged in any derivative financial
instruments to mitigate the risks of interest rate fluctuations.

Interest rate sensitivity analysis

As of December 31, 2015, 2014 and 2013 the Companys debt subject to variable interest rates was 7, 48 and 220,
respectively. Considering the low amount of debt in 2015, 2014 and 2013, the Company considers that is not currently exposed to a significant cash flow risk as a consequence of interest rate fluctuations.

4.1.1.3 Liquidity risk

The liquidity risk relates to the Companys lack of sufficient funds to comply with all its economic, labor or business
commitments.

The liquidity risk is associated with the Companys ability to finance its commitments and carry out its
business plans with stable sources of financing, as well as with the indebtedness level and the maturity profile of the financial debt.

The Company has a Liquidity Policy approved by the Board, which main principles are related to preserve capital and maintain
immediate liquidity. As part of this policy, maintains availability of cash resources, other liquid financial instruments and uncommitted credit lines in sufficient volume to meet the maturities of financial and commercial obligations, plus a
balance between short and long debt term.



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##### Table of Contents

The Company has a funding policy that provides guidelines to avoid concentration
in funding sources and credit counterparties.

It also uses a methodology for the analysis and setting of credit limits
when placing investments in different financial institutions and mutual funds in order to minimize any associated credit risk.

Liquidity rate

The Companys liquidity ratio as of December 31, 2015, 2014 and 2013 is shown below:



|                    |  |      |        |  |      |  |       |      |  |  |       | 
|------------------- |  | ---- | ------ |  | ---- |  | ----- | ---- |  |  | ----- | 
|                    |  | 2015 |        |  | 2014 |  |       | 2013 | 
|Current assets      |  |      | 10,743 |  |      |  | 8,883 |      |  |  | 6,596 | 
|Current liabilities |  |      | 7,061  |  |      |  | 5,895 |      |  |  | 4,028 | 
|                    |  |      |        |  |      |  |       |      |  |  |       | 
|Liquidity rate      |  |      | 1.52   |  |      |  | 1.51  |      |  |  | 1.64  | 
|                    |  |      |        |  |      |  |       |      |  |  |       | 

Aging of financial liabilities

The tables below analyzes the Companys future liabilities into relevant maturity groupings based on the remaining period
at the statement of financial position to the contractual maturity date for the years ended December 31, 2015, 2014 and 2013. The amounts disclosed in the table are the contractual undiscounted cash flows and as a result they do not reconcile
to the amounts disclosed on the statement of financial position except for short-term payables when discounting is not applied. The estimates are based on information available as each year end may not reflect actual amounts in the future and
therefore are provided for illustrative purpose only.



|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|---------------------------------- |  | --------------- | ----- |  | ---------------------------- |  | ------ | ----- |  |  | ----- |  |  |  | ------ | 
|                                   |  | 2015            |      
|                                   |  | Accountspayable |       |  | Otherscontractualcommitments |  |        | Loans |  |  | Total | 
|Liabilities                        |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Without any established term       |  |                 | 2     |  |                              |  |       |       |  |  |      |  |  |  | 2      | 
|With established term:             |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|- Due                              |  |                 | 293   |  |                              |  |       |       |  |  |      |  |  |  | 293    | 
|To become due                      |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|- Up to one year                   |  |                 | 3,802 |  |                              |  | 11,239 |       |  |  | 263   |  |  |  | 15,304 | 
|- From one to three years          |  |                 |      |  |                              |  | 4,728  |       |  |  | 4,025 |  |  |  | 8,753  | 
|- From three to five years         |  |                 |      |  |                              |  | 3,157  |       |  |  |      |  |  |  | 3,157  | 
|- Over five years                  |  |                 |      |  |                              |  | 16,839 |       |  |  |      |  |  |  | 16,839 | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Total amount to become due         |  |                 | 3,802 |  |                              |  | 35,963 |       |  |  | 4,288 |  |  |  | 44,053 | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Total amount with established term |  |                 | 4,095 |  |                              |  | 35,963 |       |  |  | 4,288 |  |  |  | 44,346 | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Total                              |  |                 | 4,097 |  |                              |  | 35,963 |       |  |  | 4,288 |  |  |  | 44,348 | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 



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##### Table of Contents

|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|---------------------------------- |  | --------------- | ----- |  | ---------------------------- |  | ------ | ----- |  |  | ----- |  |  |  | ------ | 
|                                   |  | 2014            |      
|                                   |  | Accountspayable |       |  | Otherscontractualcommitments |  |        | Loans |  |  | Total | 
|Liabilities                        |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Without any established term       |  |                 |      |  |                              |  |       |       |  |  |      |  |  |  |       | 
|With established term:             |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|- Due                              |  |                 | 174   |  |                              |  |       |       |  |  |      |  |  |  | 174    | 
|To become due                      |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|- Up to one year                   |  |                 | 2,871 |  |                              |  | 11,093 |       |  |  | 154   |  |  |  | 14,118 | 
|- From one to three years          |  |                 | 4     |  |                              |  | 6,650  |       |  |  | 2,814 |  |  |  | 9,468  | 
|- From three to five years         |  |                 |      |  |                              |  | 3,134  |       |  |  |      |  |  |  | 3,134  | 
|- Over five years                  |  |                 |      |  |                              |  | 8,444  |       |  |  |      |  |  |  | 8,444  | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Total amount to become due         |  |                 | 2,875 |  |                              |  | 29,321 |       |  |  | 2,968 |  |  |  | 35,164 | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Total amount with established term |  |                 | 3,049 |  |                              |  | 29,321 |       |  |  | 2,968 |  |  |  | 35,338 | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Total                              |  |                 | 3,049 |  |                              |  | 29,321 |       |  |  | 2,968 |  |  |  | 35,338 | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|                                   | 
|                                   |  | 2013            |      
|                                   |  | Accountspayable |       |  | Otherscontractualcommitments |  |        | Loans |  |  | Total | 
|Liabilities                        |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Without any established term       |  |                 |      |  |                              |  |       |       |  |  |      |  |  |  |       | 
|With established term:             |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|- Due                              |  |                 | 105   |  |                              |  |       |       |  |  |      |  |  |  | 105    | 
|To become due                      |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|- Up to one year                   |  |                 | 2,448 |  |                              |  | 10,057 |       |  |  | 308   |  |  |  | 12,813 | 
|- From one to three years          |  |                 | 7     |  |                              |  | 2,478  |       |  |  | 310   |  |  |  | 2,795  | 
|- From three to five years         |  |                 |      |  |                              |  | 1,099  |       |  |  | 2,000 |  |  |  | 3,099  | 
|- Over five years                  |  |                 |      |  |                              |  | 8,085  |       |  |  |      |  |  |  | 8,085  | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Total amount to become due         |  |                 | 2,455 |  |                              |  | 21,719 |       |  |  | 2,618 |  |  |  | 26,792 | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Total amount with established term |  |                 | 2,560 |  |                              |  | 21,719 |       |  |  | 2,618 |  |  |  | 26,897 | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 
|Total                              |  |                 | 2,560 |  |                              |  | 21,719 |       |  |  | 2,618 |  |  |  | 26,897 | 
|                                   |  |                 |       |  |                              |  |        |       |  |  |       |  |  |  |        | 

4.1.1.4 Credit risk

The Company has a Credit Policy approved by its Board of Directors that establishes guidelines and criteria for granting loans
to customers. The Company constantly performs credit evaluations of the financial ability of its clients to minimize the potential risk of doubtful accounts losses.

Credit risk represents the exposure to possible losses derived from the lack of compliance by commercial or financial
counterparties with the obligations assumed with the Company. This risk mainly results from economic and financial factors or from a possible default of counterparty.

Credit risk is associated with trade receivables as well as with cash equivalents and cash in banks and financial institutions.

The Company, in the normal course of business and according to its credit policy, provides credit lines to a large client
portfolio, in several industry sectors, including gas station operators, refiners, exporting companies, petrochemical companies, natural gas distribution companies, large electricity users and distribution companies, among others.

The allowance for doubtful accounts recognized by the Company represents its best estimate of probable losses in relation to
trade receivables.



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##### Table of Contents

As of December 31, 2015 the Companys trade receivables amounted to
3,289, of which 99% was due within one year and 1% was classified as non-current, and related to CAMMESA (an Argentine company engaged in buying electricity from power generation companies and selling it to distribution companies). Except for
CAMMESA (which represents approximately 40% of total trade receivables), the Company does not have a significant credit risk concentration, such exposure being fragmented into a large number of customers and other counterparties. No other customer
concentrates a significant percentage of total trade receivables.

Credit risk associated with cash and cash equivalents
and other financial investments is limited by the policy to operate only with counterparties (bank institutions) with adequate credit ratings. The Company also has a liquidity policy in place.

4.1.1.5 Capital management

The main purpose of the Companys capital management is to maintain a good credit rating and safe debt-to-equity ratios in
order to sustain the Companys business and maximize shareholders value.

In addition, Petrobras Argentina seeks
to maintain a cash generation level by its operating activities to fund its investment plan and fulfill all its financial commitments. In the years ended December 31, 2015, 2014 and 2013, cash provided by operating activities amounted to 4,239,
4,646 and 2,778, respectively.

The Board of Directors of the companies over which Petrobras exercises significant
influence or joint control establishes its own risk management policies.

Debt-to-equity ratio:

The Companys debt-to-equity ratio as of December 31, 2015, 2014 and 2013 is as follows:



|                     |  |      |        |  |      |  |        |      |  |  |        | 
|-------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                     |  | 2015 |        |  | 2014 |  |        | 2013 | 
|Total liabilities    |  |      | 14,534 |  |      |  | 11,817 |      |  |  | 9,167  | 
|Equity               |  |      | 14,563 |  |      |  | 12,615 |      |  |  | 11,695 | 
|                     |  |      |        |  |      |  |        |      |  |  |        | 
|Debt-to-equity ratio |  |      | 1.00   |  |      |  | 0.94   |      |  |  | 0.78   | 
|                     |  |      |        |  |      |  |        |      |  |  |        | 

4.1.2 Non-Financial risks management

Commodity price risks

Petrobras Argentinas operations are affected by a number of factors which are beyond the Companys control,
including the changes in the market price of its products, governmental regulations on prices, taxes and other charges, royalties and other factors.

In Argentina, the prices of energy products sector are mainly determined by local regulations. Fluctuations in international
prices only partially affect the domestic market.

As of December 31, 2015, 2014 and 2013, Petrobras Argentina did not
use derivative financial instruments to mitigate the risks associated with commodity price fluctuations.



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##### Table of Contents

4.2. Financial instruments by category

As of December 31, 2015, 2014 and 2013, the categories of financial instruments were as follows:



|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|----------------------------- |  | --------------------------------------------- | ----- |  | -------------------- |  | ----- | ----- |  |  | ----- | 
|                              |  | 2015                                          |      
|                              |  | Financial assets at fairvalue through results |       |  | Loans andreceivables |  |       | Total | 
|CURRENT ASSETS                |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Cash and cash equivalents     |  |                                               | 1,578 |  |                      |  | 651   |       |  |  | 2,229 | 
|Other investments             |  |                                               |      |  |                      |  | 43    |       |  |  | 43    | 
|Trade receivables             |  |                                               |      |  |                      |  | 3,241 |       |  |  | 3,241 | 
|Other receivables             |  |                                               |      |  |                      |  | 2,714 |       |  |  | 2,714 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Total current assets          |  |                                               | 1,578 |  |                      |  | 6,649 |       |  |  | 8,227 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|NON-CURRENT ASSETS            |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Trade receivables             |  |                                               |      |  |                      |  | 48    |       |  |  | 48    | 
|Other receivables             |  |                                               |      |  |                      |  | 118   |       |  |  | 118   | 
|Other investments             |  |                                               |      |  |                      |  | 290   |       |  |  | 290   | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Total non-current assets      |  |                                               |      |  |                      |  | 456   |       |  |  | 456   | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Total assets                  |  |                                               | 1,578 |  |                      |  | 7,105 |       |  |  | 8,683 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|CURRENT LIABILITIES           |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Accounts payable              |  |                                               |      |  |                      |  | 4,097 |       |  |  | 4,097 | 
|Short-term loans              |  |                                               |      |  |                      |  | 61    |       |  |  | 61    | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Total current liabilities     |  |                                               |      |  |                      |  | 4,158 |       |  |  | 4,158 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|NON-CURRENT LIABILITIES       |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Long-term loans               |  |                                               |      |  |                      |  | 3,910 |       |  |  | 3,910 | 
|Total non-current liabilities |  |                                               |      |  |                      |  | 3,910 |       |  |  | 3,910 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Total liabilities             |  |                                               |      |  |                      |  | 8,068 |       |  |  | 8,068 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 



|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|----------------------------- |  | --------------------------------------------- | ----- |  | -------------------- |  | ----- | ----- |  |  | ----- | 
|                              |  | 2014                                          |      
|                              |  | Financial assets at fairvalue through results |       |  | Loans andreceivables |  |       | Total | 
|CURRENT ASSETS                |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Cash and cash equivalents     |  |                                               | 1,266 |  |                      |  | 1,012 |       |  |  | 2,278 | 
|Other investments             |  |                                               |      |  |                      |  | 33    |       |  |  | 33    | 
|Trade receivables             |  |                                               |      |  |                      |  | 2,945 |       |  |  | 2,945 | 
|Other receivables             |  |                                               |      |  |                      |  | 1,408 |       |  |  | 1,408 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Total current assets          |  |                                               | 1,266 |  |                      |  | 5,398 |       |  |  | 6,664 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|NON-CURRENT ASSETS            |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Trade receivables             |  |                                               |      |  |                      |  | 60    |       |  |  | 60    | 
|Other receivables             |  |                                               |      |  |                      |  | 96    |       |  |  | 96    | 
|Other investments             |  |                                               |      |  |                      |  | 153   |       |  |  | 153   | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Total non-current assets      |  |                                               |      |  |                      |  | 309   |       |  |  | 309   | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Total assets                  |  |                                               | 1,266 |  |                      |  | 5,707 |       |  |  | 6,973 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|CURRENT LIABILITIES           |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Accounts payable              |  |                                               |      |  |                      |  | 3,045 |       |  |  | 3,045 | 
|Short-term loans              |  |                                               |      |  |                      |  | 92    |       |  |  | 92    | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Total current liabilities     |  |                                               |      |  |                      |  | 3,137 |       |  |  | 3,137 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|NON-CURRENT LIABILITIES       |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Accounts payable              |  |                                               |      |  |                      |  | 4     |       |  |  | 4     | 
|Long-term loans               |  |                                               |      |  |                      |  | 2,587 |       |  |  | 2,587 | 
|Total non-current liabilities |  |                                               |      |  |                      |  | 2,591 |       |  |  | 2,591 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 
|Total liabilities             |  |                                               |      |  |                      |  | 5,728 |       |  |  | 5,728 | 
|                              |  |                                               |       |  |                      |  |       |       |  |  |       | 



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##### Table of Contents

|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 
|--------------------------------- |  | --------------------------------------------- | --- |  | -------------------- |  | ----- | ----- |  |  | ----- | 
|                                  |  | 2013                                          |    
|                                  |  | Financial assets at fairvalue through results |     |  | Loans andreceivables |  |       | Total | 
|CURRENT ASSETS                    |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Cash and cash equivalents         |  |                                               | 846 |  |                      |  | 347   |       |  |  | 1,193 | 
|Other investments                 |  |                                               |    |  |                      |  | 23    |       |  |  | 23    | 
|Trade receivables                 |  |                                               |    |  |                      |  | 2,519 |       |  |  | 2,519 | 
|Other receivables                 |  |                                               |    |  |                      |  | 1,187 |       |  |  | 1,187 | 
|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Total current assets              |  |                                               | 846 |  |                      |  | 4,076 |       |  |  | 4,922 | 
|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 
|NON-CURRENT ASSETS                |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Trade receivables                 |  |                                               |    |  |                      |  | 73    |       |  |  | 73    | 
|Other receivables                 |  |                                               |    |  |                      |  | 166   |       |  |  | 166   | 
|Other investments                 |  |                                               |    |  |                      |  | 301   |       |  |  | 301   | 
|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Total non-current assets          |  |                                               |    |  |                      |  | 540   |       |  |  | 540   | 
|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Total assets                      |  |                                               | 846 |  |                      |  | 4,616 |       |  |  | 5,462 | 
|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 
|CURRENT LIABILITIES               |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Accounts payable                  |  |                                               |    |  |                      |  | 2,553 |       |  |  | 2,553 | 
|Short-term loans                  |  |                                               |    |  |                      |  | 208   |       |  |  | 208   | 
|Payroll and social security taxes |  |                                               |    |  |                      |  |      |       |  |  |      | 
|Taxes payable                     |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Provisions                        |  |                                               |     |  |                      |  |       |       |  |  |      | 
|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Total current liabilities         |  |                                               |    |  |                      |  | 2,761 |       |  |  | 2,761 | 
|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 
|NON-CURRENT LIABILITIES           |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Accounts payable                  |  |                                               |    |  |                      |  | 7     |       |  |  | 7     | 
|Long-term loans                   |  |                                               |    |  |                      |  | 2,024 |       |  |  | 2,024 | 
|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Total non-current liabilities     |  |                                               |    |  |                      |  | 2,031 |       |  |  | 2,031 | 
|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 
|Total liabilities                 |  |                                               |    |  |                      |  | 4,792 |       |  |  | 4,792 | 
|                                  |  |                                               |     |  |                      |  |       |       |  |  |       | 

4.3. Fair value of financial instruments

The methods and assumptions used to determine the estimated fair value of each class of financial instrument are as
follows:

 The carrying amount of cash, cash equivalents, accounts receivable and short-term debt are similar to
their fair value because of the short-term maturity of these items.

 The fair value of investments in mutual funds
was estimated on the basis of quoted market prices as of the reporting dates for identical assets in active markets and accordingly this fair value estimate was categorized as Level 1.

 The fair value of publicly offered long-term debt obligations was estimated on the basis of quoted market prices for
such debt obligations as of the reporting dates (level 1) while for the rest of the long-term debt obligations, fair value was estimated on the basis of interest rates currently available to the Company for debt obligations with similar maturities
(Level 2).

The estimated fair value of long-term loans as of December 31, 2015, 2014 and 2013, valued at amortized
cost, except for financial instruments whose book values above approximate fair values, are as follows:



|                |  |      |       |  |      |  |       |      |  |  |       | 
|--------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|Long-term loans |  | 2015 |       |  | 2014 |  |       | 2013 | 
|Book value      |  |      | 3,910 |  |      |  | 2,587 |      |  |  | 2,024 | 
|Fair value      |  |      | 3,770 |  |      |  | 2,558 |      |  |  | 2,281 | 

4.4. Fair Value by hierarchy levels

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in
the principal (or most advantageous) market at the measurement date under current market conditions regardless of whether that price is directly observable or estimated using another valuation technique.



F-34



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##### Table of Contents

A fair value measurement is for a particular asset or liability and therefore,
shall take into account particular characteristics that would be taken into account by market participants, assuming that they act in their economic best interest.

Valuation techniques used by the Company maximize the use of relevant observable inputs and minimize the use of unobservable
inputs.

Fair value hierarchy categorizes into three levels the inputs to valuation techniques used and gives the highest
priority to Level 1 inputs and the lowest priority to Level 3:



| |  |  | Level 1: Observable inputs that are quoted prices in active markets for identical assets or liabilities that the Company can access at the measurement date;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 2: Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Level 3: Unobservable inputs for the asset or liability, that are develop by the Company using the best information available to reflect the assumptions that market participants would use.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

If one or more relevant inputs were not based on observable market data, related financial instruments would be included in
Level 3.



|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|------------------------- |  | ------- | ----- |  | ------- |  | - | ------- |  |  | ----- |  |  |  | ----- | 
|                          |  | 2015    |      
|                          |  | Level 1 |       |  | Level 2 |  |   | level 3 |  |  | Total | 
|CURRENT ASSETS            |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Cash and cash equivalents |  |         | 1,578 |  |         |  |  |         |  |  |      |  |  |  | 1,578 | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Total current assets      |  |         | 1,578 |  |         |  |  |         |  |  |      |  |  |  | 1,578 | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Total assets              |  |         | 1,578 |  |         |  |  |         |  |  |      |  |  |  | 1,578 | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Total liabilities         |  |         |      |  |         |  |  |         |  |  |      |  |  |  |      | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|                          | 
|                          |  | 2014    |      
|                          |  | Level 1 |       |  | Level 2 |  |   | level 3 |  |  | Total | 
|CURRENT ASSETS            |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Cash and cash equivalents |  |         | 1,266 |  |         |  |  |         |  |  |      |  |  |  | 1,266 | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Total current assets      |  |         | 1,266 |  |         |  |  |         |  |  |      |  |  |  | 1,266 | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Total assets              |  |         | 1,266 |  |         |  |  |         |  |  |      |  |  |  | 1,266 | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Total liabilities         |  |         |      |  |         |  |  |         |  |  |      |  |  |  |      | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|                          | 
|                          |  | 2013    |      
|                          |  | Level 1 |       |  | Level 2 |  |   | level 3 |  |  | Total | 
|CURRENT ASSETS            |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Cash and cash equivalents |  |         | 846   |  |         |  |  |         |  |  |      |  |  |  | 846   | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Total current assets      |  |         | 846   |  |         |  |  |         |  |  |      |  |  |  | 846   | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Total assets              |  |         | 846   |  |         |  |  |         |  |  |      |  |  |  | 846   | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 
|Total liabilities         |  |         |      |  |         |  |  |         |  |  |      |  |  |  |      | 
|                          |  |         |       |  |         |  |   |         |  |  |       |  |  |  |       | 

5. Information by segments

The Company prepares this information based on business segment criteria and also prepares relevant information by geographical area.

5.1. Business segments:

The business segments were defined according to the regular way in which management analyzes information in decision making,
applying IFRSs accounting policies. Transactions between business segments are conducted during the ordinary course of business at market terms and prices. The terms and conditions of these transactions are comparable to those offered by or
obtained from non-related parties.



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##### Table of Contents

Below is detailed information on each business segment identified by the
Companys Management:



|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 
|-------------------------------------------- |  | ----------- | ------ |  | ------------ |  | ----- | -------------- |  |  | ------ |  |  | --------- | ----- |  | ------------ |  | ----- | ----- |  |  | ------ | - |  |  | ------ | 
|                                             |  | 2015        |       
|                                             |  | Oil and Gas |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       | 
|                                             |  | Exploration |        |  | Refining     |  |       |                |  |  | Gas    |  |  |           |       |  |              |  |       |       | 
|                                             |  | and         |        |  | and          |  |       |                |  |  | and    |  |  |           |       |  |              |  |       |       | 
|                                             |  | Production  |        |  | Distribution |  |       | Petrochemicals |  |  | Energy |  |  | Corporate |       |  | Eliminations |  |       | Total | 
|Current assets                               |  |             | 4,123  |  |              |  | 2,462 |                |  |  | 1,273  |  |  |           | 2,468 |  |              |  | 3,234 |       |  |  | (2,817 | ) |  |  | 10,743 | 
|Investment in companies under joint ventures |  |             |       |  |              |  |      |                |  |  |       |  |  |           | 441   |  |              |  |      |       |  |  |       |   |  |  | 441    | 
|Investments in associates                    |  |             | 2,920  |  |              |  | 210   |                |  |  |       |  |  |           |      |  |              |  |      |       |  |  |       |   |  |  | 3,130  | 
|Other Investments                            |  |             | 260    |  |              |  |      |                |  |  |       |  |  |           | 30    |  |              |  |      |       |  |  |       |   |  |  | 290    | 
|Property, plant and equipment                |  |             | 11,312 |  |              |  | 1,403 |                |  |  | 571    |  |  |           | 780   |  |              |  | 108   |       |  |  |       |   |  |  | 14,174 | 
|Non-current other assets                     |  |             | 107    |  |              |  | 58    |                |  |  | 64     |  |  |           | 65    |  |              |  | 29    |       |  |  | (4     | ) |  |  | 319    | 
|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 
|Total assets                                 |  |             | 18,722 |  |              |  | 4,133 |                |  |  | 1,908  |  |  |           | 3,784 |  |              |  | 3,371 |       |  |  | (2,821 | ) |  |  | 29,097 | 
|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 
|Total liabilities                            |  |             | 5,765  |  |              |  | 3,226 |                |  |  | 749    |  |  |           | 1,320 |  |              |  | 6,010 |       |  |  | (2,536 | ) |  |  | 14,534 | 
|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 



|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 
|-------------------------------------------- |  | ----------- | ------ |  | ------------ |  | ----- | -------------- |  |  | ------ |  |  | --------- | ----- |  | ------------ |  | ----- | ----- |  |  | ------ | - |  |  | ------ | 
|                                             |  | 2014        |       
|                                             |  | Oil and Gas |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       | 
|                                             |  | Exploration |        |  | Refining     |  |       |                |  |  | Gas    |  |  |           |       |  |              |  |       |       | 
|                                             |  | and         |        |  | and          |  |       |                |  |  | and    |  |  |           |       |  |              |  |       |       | 
|                                             |  | Production  |        |  | Distribution |  |       | Petrochemicals |  |  | Energy |  |  | Corporate |       |  | Eliminations |  |       | Total | 
|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 
|Current assets                               |  |             | 3,324  |  |              |  | 2,100 |                |  |  | 1,177  |  |  |           | 1,724 |  |              |  | 2,669 |       |  |  | (2,111 | ) |  |  | 8,883  | 
|Investment in companies under joint ventures |  |             |       |  |              |  |      |                |  |  |       |  |  |           | 491   |  |              |  |      |       |  |  |       |   |  |  | 491    | 
|Investments in associates                    |  |             | 2,733  |  |              |  | 246   |                |  |  |       |  |  |           |      |  |              |  |      |       |  |  |       |   |  |  | 2,979  | 
|Other Investments                            |  |             | 106    |  |              |  |      |                |  |  |       |  |  |           | 51    |  |              |  |      |       |  |  | (4     | ) |  |  | 153    | 
|Property, plant and equipment                |  |             | 8,985  |  |              |  | 1,264 |                |  |  | 496    |  |  |           | 737   |  |              |  | 107   |       |  |  |       |   |  |  | 11,589 | 
|Non-current other assets                     |  |             | 140    |  |              |  | 50    |                |  |  | 59     |  |  |           | 72    |  |              |  | 13    |       |  |  | 3      |   |  |  | 337    | 
|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 
|Total assets                                 |  |             | 15,288 |  |              |  | 3,660 |                |  |  | 1,732  |  |  |           | 3,075 |  |              |  | 2,789 |       |  |  | (2,112 | ) |  |  | 24,432 | 
|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 
|Total liabilities                            |  |             | 6,072  |  |              |  | 2,443 |                |  |  | 514    |  |  |           | 647   |  |              |  | 3,898 |       |  |  | (1,757 | ) |  |  | 11,817 | 
|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 



|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 
|-------------------------------------------- |  | ----------- | ------ |  | ------------ |  | ----- | -------------- |  |  | ------ |  |  | --------- | ----- |  | ------------ |  | ----- | ----- |  |  | ------ | - |  |  | ------ | 
|                                             |  | 2013        |       
|                                             |  | Oil and Gas |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       | 
|                                             |  | Exploration |        |  | Refining     |  |       |                |  |  | Gas    |  |  |           |       |  |              |  |       |       | 
|                                             |  | and         |        |  | and          |  |       |                |  |  | and    |  |  |           |       |  |              |  |       |       | 
|                                             |  | Production  |        |  | Distribution |  |       | Petrochemicals |  |  | Energy |  |  | Corporate |       |  | Eliminations |  |       | Total | 
|Current assets                               |  |             | 2,468  |  |              |  | 1,784 |                |  |  | 991    |  |  |           | 1,382 |  |              |  | 2,090 |       |  |  | (2,119 | ) |  |  | 6,596  | 
|Investment in companies under joint ventures |  |             |       |  |              |  |      |                |  |  |       |  |  |           | 497   |  |              |  |      |       |  |  |       |   |  |  | 497    | 
|Investments in associates                    |  |             | 3,376  |  |              |  | 192   |                |  |  |       |  |  |           |      |  |              |  |      |       |  |  |       |   |  |  | 3,568  | 
|Other Investments                            |  |             | 109    |  |              |  |      |                |  |  |       |  |  |           | 64    |  |              |  | 128   |       |  |  |       |   |  |  | 301    | 
|Property, plant and equipment                |  |             | 7,105  |  |              |  | 1,213 |                |  |  | 458    |  |  |           | 641   |  |              |  | 107   |       |  |  |       |   |  |  | 9,524  | 
|Non-current other assets                     |  |             | 92     |  |              |  | 51    |                |  |  | 41     |  |  |           | 159   |  |              |  | 34    |       |  |  | (1     | ) |  |  | 376    | 
|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 
|Total assets                                 |  |             | 13,150 |  |              |  | 3,240 |                |  |  | 1,490  |  |  |           | 2,743 |  |              |  | 2,359 |       |  |  | (2,120 | ) |  |  | 20,862 | 
|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 
|Total liabilities                            |  |             | 4,889  |  |              |  | 2,233 |                |  |  | 574    |  |  |           | 603   |  |              |  | 2,749 |       |  |  | (1,881 | ) |  |  | 9,167  | 
|                                             |  |             |        |  |              |  |       |                |  |  |        |  |  |           |       |  |              |  |       |       |  |  |        |   |  |  |        | 



F-36



---

##### Table of Contents

|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  
|----------------------------------------------- |  | ---------------------------------- | ------ | - | ----------------------- |  | ------- | -------------- |  |  | ------------ | - |  | --------- | ------ | - | ------------ |  | ------ | ----- |  |  | ------ | - |  |  | ------- | -
|                                                |  | 2015                               |       
|                                                |  | Oil andGasExplorationandProduction |        |   | RefiningandDistribution |  |         | Petrochemicals |  |  | GasandEnergy |   |  | Corporate |        |   | Eliminations |  |        | Total | 
|                                                |  |                                    |        |   |                         |  |        
|Consolidated Statement of Income                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  
|Sales                                           |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  
|To third parties                                |  |                                    | 1,466  |   |                         |  | 11,713  |                |  |  | 4,455        |   |  |           | 4,321  |   |              |  |       |       |  |  |       |   |  |  | 21,955  |  
|Inter-segment                                   |  |                                    | 8,983  |   |                         |  | 380     |                |  |  | 54           |   |  |           | 304    |   |              |  |       |       |  |  | (9,721 | ) |  |  |        |  
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  
|                                                |  |                                    | 10,449 |   |                         |  | 12,093  |                |  |  | 4,509        |   |  |           | 4,625  |   |              |  |       |       |  |  | (9,721 | ) |  |  | 21,955  |  
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  
|Cost of sales                                   |  |                                    | (7,119 | ) |                         |  | (10,788 | )              |  |  | (3,828       | ) |  |           | (3,707 | ) |              |  |       |       |  |  | 9,888  |   |  |  | (15,554 | )
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  
|Gross profit (loss)                             |  |                                    | 3,330  |   |                         |  | 1,305   |                |  |  | 681          |   |  |           | 918    |   |              |  |       |       |  |  | 167    |   |  |  | 6,401   |  
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  
|Administrative and selling expenses             |  |                                    | (571   | ) |                         |  | (1,242  | )              |  |  | (221         | ) |  |           | (115   | ) |              |  | (772   | )     |  |  |       |   |  |  | (2,921  | )
|Exploration expenses                            |  |                                    | (148   | ) |                         |  |        |                |  |  |             |   |  |           |       |   |              |  |       |       |  |  |       |   |  |  | (148    | )
|Other operating income (expenses), net          |  |                                    | 191    |   |                         |  | 13      |                |  |  | (70          | ) |  |           | (7     | ) |              |  | (244   | )     |  |  | (6     | ) |  |  | (123    | )
|Share of profit of equity accounted investments |  |                                    | (1,210 | ) |                         |  | (36     | )              |  |  |             |   |  |           | (44    | ) |              |  |       |       |  |  |       |   |  |  | (1,290  | )
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  
|Operating income (loss)                         |  |                                    | 1,592  |   |                         |  | 40      |                |  |  | 390          |   |  |           | 752    |   |              |  | (1,016 | )     |  |  | 161    |   |  |  | 1,919   |  
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  
|Interest income                                 |  |                                    | 445    |   |                         |  | 31      |                |  |  | 87           |   |  |           | 102    |   |              |  | 883    |       |  |  | (9     | ) |  |  | 1,539   |  
|Interest expense                                |  |                                    | (575   | ) |                         |  | (355    | )              |  |  | (174         | ) |  |           | (49    | ) |              |  | (448   | )     |  |  | 9      |   |  |  | (1,592  | )
|Income tax                                      |  |                                    | (586   | ) |                         |  | (25     | )              |  |  |             |   |  |           | (2     | ) |              |  | (358   | )     |  |  |       |   |  |  | (971    | )
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  
|Net income (loss)                               |  |                                    | 876    |   |                         |  | (309    | )              |  |  | 303          |   |  |           | 803    |   |              |  | (939   | )     |  |  | 161    |   |  |  | 895     |  
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |        |       |  |  |        |   |  |  |         |  



|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|----------------------------------------------- |  | ---------------------------------- | ------ | - | ----------------------- |  | ------- | -------------- |  |  | ------------ | - |  | --------- | ------ | - | ------------ |  | ---- | ----- |  |  | ------ | - |  |  | ------- | -
|                                                |  | 2014                               |       
|                                                |  | Oil andGasExplorationandProduction |        |   | RefiningandDistribution |  |         | Petrochemicals |  |  | GasandEnergy |   |  | Corporate |        |   | Eliminations |  |      | Total | 
|                                                |  |                                    |        |   |                         |  |        
|Consolidated Statement of Income                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Sales                                           |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|To third parties                                |  |                                    | 2,015  |   |                         |  | 11,199  |                |  |  | 4,311        |   |  |           | 3,213  |   |              |  |     |       |  |  |       |   |  |  | 20,738  |  
|Inter-segment                                   |  |                                    | 8,538  |   |                         |  | 277     |                |  |  | 125          |   |  |           | 274    |   |              |  |     |       |  |  | (9,214 | ) |  |  |        |  
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|                                                |  |                                    | 10,553 |   |                         |  | 11,476  |                |  |  | 4,436        |   |  |           | 3,487  |   |              |  |     |       |  |  | (9,214 | ) |  |  | 20,738  |  
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Cost of sales                                   |  |                                    | (7,019 | ) |                         |  | (10,168 | )              |  |  | (3,626       | ) |  |           | (2,796 | ) |              |  |     |       |  |  | 9,119  |   |  |  | (14,490 | )
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Gross profit (loss)                             |  |                                    | 3,534  |   |                         |  | 1,308   |                |  |  | 810          |   |  |           | 691    |   |              |  |     |       |  |  | (95    | ) |  |  | 6,248   |  
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Administrative and selling expenses             |  |                                    | (520   | ) |                         |  | (964    | )              |  |  | (216         | ) |  |           | (152   | ) |              |  | (564 | )     |  |  |       |   |  |  | (2,416  | )
|Exploration expenses                            |  |                                    | (70    | ) |                         |  |        |                |  |  |             |   |  |           |       |   |              |  |     |       |  |  |       |   |  |  | (70     | )
|Other operating income (expenses), net          |  |                                    | (379   | ) |                         |  | (29     | )              |  |  | (89          | ) |  |           | 20     |   |              |  | (277 | )     |  |  | (25    | ) |  |  | (779    | )
|Share of profit of equity accounted investments |  |                                    | (1,830 | ) |                         |  | 97      |                |  |  |             |   |  |           | (2     | ) |              |  |     |       |  |  |       |   |  |  | (1,735  | )
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Operating income (loss)                         |  |                                    | 735    |   |                         |  | 412     |                |  |  | 505          |   |  |           | 557    |   |              |  | (841 | )     |  |  | (120   | ) |  |  | 1,248   |  
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Interest income                                 |  |                                    | 269    |   |                         |  | 34      |                |  |  | 87           |   |  |           | 99     |   |              |  | 695  |       |  |  | (60    | ) |  |  | 1,124   |  
|Interest expense                                |  |                                    | (547   | ) |                         |  | (161    | )              |  |  | (63          | ) |  |           | (19    | ) |              |  | (322 | )     |  |  | 60     |   |  |  | (1,052  | )
|Income tax                                      |  |                                    | (325   | ) |                         |  | (39     | )              |  |  |             |   |  |           | (2     | ) |              |  | (376 | )     |  |  |       |   |  |  | (742    | )
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Net income (loss)                               |  |                                    | 132    |   |                         |  | 246     |                |  |  | 529          |   |  |           | 635    |   |              |  | (844 | )     |  |  | (120   | ) |  |  | 578     |  
|                                                |  |                                    |        |   |                         |  |         |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  



F-37



---

##### Table of Contents

|                                                |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|----------------------------------------------- |  | ---------------------------------- | ------ | - | ----------------------- |  | ------ | -------------- |  |  | ------------ | - |  | --------- | ------ | - | ------------ |  | ---- | ----- |  |  | ------ | - |  |  | ------- | -
|                                                |  | 2013                               |       
|                                                |  | Oil andGasExplorationandProduction |        |   | RefiningandDistribution |  |        | Petrochemicals |  |  | GasandEnergy |   |  | Corporate |        |   | Eliminations |  |      | Total | 
|                                                |  |                                    |        |   |                         |  |       
|Consolidated Statement of Income                |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Sales                                           |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|To third parties                                |  |                                    | 1,814  |   |                         |  | 7,845  |                |  |  | 3,177        |   |  |           | 2,504  |   |              |  |     |       |  |  |       |   |  |  | 15,340  |  
|Inter-segment                                   |  |                                    | 6,024  |   |                         |  | 301    |                |  |  | 171          |   |  |           | 200    |   |              |  |     |       |  |  | (6,696 | ) |  |  |        |  
|                                                |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|                                                |  |                                    | 7,838  |   |                         |  | 8,146  |                |  |  | 3,348        |   |  |           | 2,704  |   |              |  |     |       |  |  | (6,696 | ) |  |  | 15,340  |  
|                                                |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Cost of sales                                   |  |                                    | (5,501 | ) |                         |  | (7,352 | )              |  |  | (2,827       | ) |  |           | (2,218 | ) |              |  |     |       |  |  | 6,638  |   |  |  | (11,260 | )
|                                                |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Gross profit (loss)                             |  |                                    | 2,337  |   |                         |  | 794    |                |  |  | 521          |   |  |           | 486    |   |              |  |     |       |  |  | (58    | ) |  |  | 4,080   |  
|                                                |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Administrative and selling expenses             |  |                                    | (350   | ) |                         |  | (728   | )              |  |  | (155         | ) |  |           | (98    | ) |              |  | (466 | )     |  |  |       |   |  |  | (1,797  | )
|Exploration expenses                            |  |                                    | (82    | ) |                         |  |       |                |  |  |             |   |  |           |       |   |              |  |     |       |  |  |       |   |  |  | (82     | )
|Other operating (expenses) income, net          |  |                                    | (227   | ) |                         |  | 106    |                |  |  | (60          | ) |  |           | (3     | ) |              |  | (380 | )     |  |  | (7     | ) |  |  | (571    | )
|Share of profit of equity accounted investments |  |                                    | (336   | ) |                         |  | 44     |                |  |  |             |   |  |           | 13     |   |              |  |     |       |  |  |       |   |  |  | (279    | )
|                                                |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Operating income (loss)                         |  |                                    | 1,342  |   |                         |  | 216    |                |  |  | 306          |   |  |           | 398    |   |              |  | (846 | )     |  |  | (65    | ) |  |  | 1,351   |  
|                                                |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Interest income                                 |  |                                    | (29    | ) |                         |  | 30     |                |  |  | 41           |   |  |           | 58     |   |              |  | 622  |       |  |  | (22    | ) |  |  | 936     |  
|Interest expense                                |  |                                    | (200   | ) |                         |  | (140   | )              |  |  | (52          | ) |  |           | (23    | ) |              |  | (254 | )     |  |  | 22     |   |  |  | (883    | )
|Income tax                                      |  |                                    | (270   | ) |                         |  | (17    | )              |  |  |             |   |  |           |       |   |              |  | (265 | )     |  |  |       |   |  |  | (552    | )
|                                                |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  
|Net income (loss)                               |  |                                    | 843    |   |                         |  | 89     |                |  |  | 295          |   |  |           | 433    |   |              |  | (743 | )     |  |  | (65    | ) |  |  | 852     |  
|                                                |  |                                    |        |   |                         |  |        |                |  |  |              |   |  |           |        |   |              |  |      |       |  |  |        |   |  |  |         |  

Other relevant information



|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |     |  |       |  |    |  |  |  |       | 
|---------------------------------------------------------- |  | ---------------------------------- | ----- |  | ----------------------- |  | --- | -------------- |  |  | ------------ |  |  | --------- | --- |  | ----- |  | -- |  |  |  | ----- | 
|                                                           |  | 2015                               |      
|                                                           |  | Oil andGasExplorationandProduction |       |  | RefiningandDistribution |  |     | Petrochemicals |  |  | GasandEnergy |  |  | Corporate |     |  | Total | 
|Additions of property, plant and equipment                 |  |                                    | 4,570 |  |                         |  | 229 |                |  |  | 127          |  |  |           | 162 |  |       |  | 26 |  |  |  | 5,114 | 
|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |     |  |       |  |    |  |  |  |       | 
|Depreciation of property, plant and equipment included in: |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |     |  |       |  |    |  |  |  |       | 
|Cost of sales                                              |  |                                    | 2,324 |  |                         |  | 54  |                |  |  | 52           |  |  |           | 119 |  |       |  |   |  |  |  | 2,549 | 
|Administrative and selling expenses                        |  |                                    | 30    |  |                         |  | 29  |                |  |  |             |  |  |           |    |  |       |  | 22 |  |  |  | 81    | 
|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |     |  |       |  |    |  |  |  |       | 
|Total                                                      |  |                                    | 2,354 |  |                         |  | 83  |                |  |  | 52           |  |  |           | 119 |  |       |  | 22 |  |  |  | 2,630 | 
|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |     |  |       |  |    |  |  |  |       | 



|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |     |  |       |  |    |  |  |  |       | 
|---------------------------------------------------------- |  | ---------------------------------- | ----- |  | ----------------------- |  | --- | -------------- |  |  | ------------ |  |  | --------- | --- |  | ----- |  | -- |  |  |  | ----- | 
|                                                           |  | 2014                               |      
|                                                           |  | Oil andGasExplorationandProduction |       |  | RefiningandDistribution |  |     | Petrochemicals |  |  | GasandEnergy |  |  | Corporate |     |  | Total | 
|Additions of property, plant and equipment                 |  |                                    | 4,189 |  |                         |  | 171 |                |  |  | 78           |  |  |           | 195 |  |       |  | 22 |  |  |  | 4,655 | 
|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |     |  |       |  |    |  |  |  |       | 
|Depreciation of property, plant and equipment included in: |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |     |  |       |  |    |  |  |  |       | 
|Cost of sales                                              |  |                                    | 2,367 |  |                         |  | 53  |                |  |  | 40           |  |  |           | 98  |  |       |  |   |  |  |  | 2,558 | 
|Administrative and selling expenses                        |  |                                    | 30    |  |                         |  | 23  |                |  |  |             |  |  |           |    |  |       |  | 21 |  |  |  | 74    | 
|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |     |  |       |  |    |  |  |  |       | 
|Total                                                      |  |                                    | 2,397 |  |                         |  | 76  |                |  |  | 40           |  |  |           | 98  |  |       |  | 21 |  |  |  | 2,632 | 
|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |     |  |       |  |    |  |  |  |       | 



F-38



---

##### Table of Contents

|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |    |  |       |  |    |  |  |  |       | 
|---------------------------------------------------------- |  | ---------------------------------- | ----- |  | ----------------------- |  | --- | -------------- |  |  | ------------ |  |  | --------- | -- |  | ----- |  | -- |  |  |  | ----- | 
|                                                           |  | 2013                               |      
|                                                           |  | Oil andGasExplorationandProduction |       |  | RefiningandDistribution |  |     | Petrochemicals |  |  | GasandEnergy |  |  | Corporate |    |  | Total | 
|Additions of property, plant and equipment                 |  |                                    | 2,437 |  |                         |  | 164 |                |  |  | 102          |  |  |           | 9  |  |       |  | 29 |  |  |  | 2,741 | 
|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |    |  |       |  |    |  |  |  |       | 
|Depreciation of property, plant and equipment included in: |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |    |  |       |  |    |  |  |  |       | 
|Cost of sales                                              |  |                                    | 1,943 |  |                         |  | 60  |                |  |  | 32           |  |  |           | 96 |  |       |  |   |  |  |  | 2,131 | 
|Administrative and selling expenses                        |  |                                    | 19    |  |                         |  | 26  |                |  |  |             |  |  |           |   |  |       |  | 18 |  |  |  | 63    | 
|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |    |  |       |  |    |  |  |  |       | 
|Total                                                      |  |                                    | 1,962 |  |                         |  | 86  |                |  |  | 32           |  |  |           | 96 |  |       |  | 18 |  |  |  | 2,194 | 
|                                                           |  |                                    |       |  |                         |  |     |                |  |  |              |  |  |           |    |  |       |  |    |  |  |  |       | 



|             |  |                                                                    |  |      |        |   |      |  |        |      |  |  |        |  
|------------ |  | ------------------------------------------------------------------ |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|Products     |  | Business Segment                                                   |  | 2015 |        |   | 2014 |  |        | 2013 | 
|Crude oil    |  | Oil and Gas Exploration and Production /
Refining and Distribution |  |      | 7,820  |   |      |  | 9,163  |      |  |  | 7,146  |  
|Gas Oil      |  | Refining and Distribution                                          |  |      | 5,621  |   |      |  | 4,910  |      |  |  | 3,229  |  
|Gasoline     |  | Refining and Distribution                                          |  |      | 3,666  |   |      |  | 3,101  |      |  |  | 2,260  |  
|Electricity  |  | Gas and Energy                                                     |  |      | 1,685  |   |      |  | 1,412  |      |  |  | 1,366  |  
|Gas (a)      |  | Oil and Gas Exploration and Production                             |  |      | 6,269  |   |      |  | 4,555  |      |  |  | 2,730  |  
|Styrene      |  | Petrochemicals                                                     |  |      | 812    |   |      |  | 974    |      |  |  | 810    |  
|Polystyrene  |  | Petrochemicals                                                     |  |      | 1,254  |   |      |  | 1,112  |      |  |  | 749    |  
|Others       |  | -                                                                  |  |      | 4,549  |   |      |  | 4,725  |      |  |  | 3,746  |  
|Eliminations |  | -                                                                  |  |      | (9,721 | ) |      |  | (9,214 | )    |  |  | (6,696 | )
|             |  |                                                                    |  |      |        |   |      |  |        |      |  |  |        |  
|             |  |                                                                    |  |      | 21,955 |   |      |  | 20,738 |      |  |  | 15,340 |  
|             |  |                                                                    |  |      |        |   |      |  |        |      |  |  |        |  



|(a) | Includes 614 related to Stimulus Program for Surplus Injection of Natural Gas for Companies with Reduced Injection, created by Resolution No. 60/2013 of the Commission of Strategic Planning and Coordination of the
National Investment Plan Hydrocarbon National Government.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-39



---

##### Table of Contents

5.2. Relevant information by geographical area

Below is information on assets, sales, operating income and equity in earnings of affiliates aggregated by geographical area:



|                                             |  |           |        |  |           |  |       |         |  |  |         |  |  |                       |     |  |       |  |    |  |  |  |        | 
|-------------------------------------------- |  | --------- | ------ |  | --------- |  | ----- | ------- |  |  | ------- |  |  | --------------------- | --- |  | ----- |  | -- |  |  |  | ------ | 
|                                             |  | 2015      |       
|                                             |  | Argentina |        |  | Venezuela |  |       | Bolivia |  |  | Ecuador |  |  | Other andeliminations |     |  | Total | 
|Current assets                               |  |           | 8,430  |  |           |  | 162   |         |  |  | 1,326   |  |  |                       | 810 |  |       |  | 15 |  |  |  | 10,743 | 
|Investment in companies under joint ventures |  |           | 441    |  |           |  |      |         |  |  |        |  |  |                       |    |  |       |  |   |  |  |  | 441    | 
|Investments in associates                    |  |           | 288    |  |           |  | 2,842 |         |  |  |        |  |  |                       |    |  |       |  |   |  |  |  | 3,130  | 
|Other receivables                            |  |           | 162    |  |           |  | 100   |         |  |  |        |  |  |                       | 28  |  |       |  |   |  |  |  | 290    | 
|Property, plant and equipment                |  |           | 13,961 |  |           |  |      |         |  |  | 211     |  |  |                       | 2   |  |       |  |   |  |  |  | 14,174 | 
|Non-current other assets                     |  |           | 244    |  |           |  |      |         |  |  | 6       |  |  |                       | 69  |  |       |  |   |  |  |  | 319    | 
|                                             |  |           |        |  |           |  |       |         |  |  |         |  |  |                       |     |  |       |  |    |  |  |  |        | 
|Total assets                                 |  |           | 23,526 |  |           |  | 3,104 |         |  |  | 1,543   |  |  |                       | 909 |  |       |  | 15 |  |  |  | 29,097 | 
|                                             |  |           |        |  |           |  |       |         |  |  |         |  |  |                       |     |  |       |  |    |  |  |  |        | 



|                                             |  |           |        |  |           |  |       |         |  |  |         |  |  |                       |     |  |       |  |   |  |  |  |        | 
|-------------------------------------------- |  | --------- | ------ |  | --------- |  | ----- | ------- |  |  | ------- |  |  | --------------------- | --- |  | ----- |  | - |  |  |  | ------ | 
|                                             |  | 2014      |       
|                                             |  | Argentina |        |  | Venezuela |  |       | Bolivia |  |  | Ecuador |  |  | Other andeliminations |     |  | Total | 
|Current assets                               |  |           | 8,005  |  |           |  | 108   |         |  |  | 168     |  |  |                       | 593 |  |       |  | 9 |  |  |  | 8,883  | 
|Investment in companies under joint ventures |  |           | 491    |  |           |  |      |         |  |  |        |  |  |                       |    |  |       |  |  |  |  |  | 491    | 
|Investments in associates                    |  |           | 312    |  |           |  | 2,667 |         |  |  |        |  |  |                       |    |  |       |  |  |  |  |  | 2,979  | 
|Other receivables                            |  |           | 67     |  |           |  | 86    |         |  |  |        |  |  |                       |    |  |       |  |  |  |  |  | 153    | 
|Property, plant and equipment                |  |           | 11,262 |  |           |  |      |         |  |  | 325     |  |  |                       | 2   |  |       |  |  |  |  |  | 11,589 | 
|Non-current other assets                     |  |           | 289    |  |           |  |      |         |  |  | 4       |  |  |                       | 44  |  |       |  |  |  |  |  | 337    | 
|                                             |  |           |        |  |           |  |       |         |  |  |         |  |  |                       |     |  |       |  |   |  |  |  |        | 
|Total assets                                 |  |           | 20,426 |  |           |  | 2,861 |         |  |  | 497     |  |  |                       | 639 |  |       |  | 9 |  |  |  | 24,432 | 
|                                             |  |           |        |  |           |  |       |         |  |  |         |  |  |                       |     |  |       |  |   |  |  |  |        | 



|                                            |  |           |        |  |           |  |       |         |  |  |         |  |  |                       |     |  |       |  |    |  |  |  |        | 
|------------------------------------------- |  | --------- | ------ |  | --------- |  | ----- | ------- |  |  | ------- |  |  | --------------------- | --- |  | ----- |  | -- |  |  |  | ------ | 
|                                            |  | 2013      |       
|                                            |  | Argentina |        |  | Venezuela |  |       | Bolivia |  |  | Ecuador |  |  | Other andeliminations |     |  | Total | 
|Current assets                              |  |           | 5,931  |  |           |  | 39    |         |  |  | 151     |  |  |                       | 465 |  |       |  | 10 |  |  |  | 6,596  | 
|Investment in companies under joint control |  |           | 497    |  |           |  |      |         |  |  |        |  |  |                       |    |  |       |  |   |  |  |  | 497    | 
|Investments in associates                   |  |           | 237    |  |           |  | 3,078 |         |  |  |        |  |  |                       | 253 |  |       |  |   |  |  |  | 3,568  | 
|Other receivables                           |  |           | 80     |  |           |  | 93    |         |  |  |        |  |  |                       | 128 |  |       |  |   |  |  |  | 301    | 
|Property, plant and equipment               |  |           | 9,020  |  |           |  |      |         |  |  | 501     |  |  |                       | 3   |  |       |  |   |  |  |  | 9,524  | 
|Non-current other assets                    |  |           | 340    |  |           |  |      |         |  |  | 3       |  |  |                       | 31  |  |       |  | 2  |  |  |  | 376    | 
|                                            |  |           |        |  |           |  |       |         |  |  |         |  |  |                       |     |  |       |  |    |  |  |  |        | 
|Total assets                                |  |           | 16,105 |  |           |  | 3,210 |         |  |  | 655     |  |  |                       | 880 |  |       |  | 12 |  |  |  | 20,862 | 
|                                            |  |           |        |  |           |  |       |         |  |  |         |  |  |                       |     |  |       |  |    |  |  |  |        | 



|                        |  |           |        |  |           |  |        |         |  |  |         |   |  |                       |      |   |       |  |    |   |  |  |        | 
|----------------------- |  | --------- | ------ |  | --------- |  | ------ | ------- |  |  | ------- | - |  | --------------------- | ---- | - | ----- |  | -- | - |  |  | ------ | 
|                        |  | 2015      |       
|                        |  | Argentina |        |  | Venezuela |  |        | Bolivia |  |  | Ecuador |   |  | Other andeliminations |      |   | Total | 
|Sales (a)               |  |           | 21,837 |  |           |  |       |         |  |  | 118     |   |  |                       |     |   |       |  |   |   |  |  | 21,955 | 
|Operating income (loss) |  |           | 2,956  |  |           |  | (1,259 | )       |  |  | (69     | ) |  |                       | 295  |   |       |  | (4 | ) |  |  | 1,919  | 
|                        | 
|                        |  | 2014      |       
|                        |  | Argentina |        |  | Venezuela |  |        | Bolivia |  |  | Ecuador |   |  | Other andeliminations |      |   | Total | 
|Sales (a)               |  |           | 20,546 |  |           |  |       |         |  |  | 192     |   |  |                       |     |   |       |  |   |   |  |  | 20,738 | 
|Operating income (loss) |  |           | 3,223  |  |           |  | (1,425 | )       |  |  | (58     | ) |  |                       | (487 | ) |       |  | (5 | ) |  |  | 1,248  | 
|                        | 
|                        |  | 2013      |       
|                        |  | Argentina |        |  | Venezuela |  |        | Bolivia |  |  | Ecuador |   |  | Other andeliminations |      |   | Total | 
|Sales (a)               |  |           | 15,151 |  |           |  |       |         |  |  | 152     |   |  |                       |     |   |       |  | 37 |   |  |  | 15,340 | 
|Operating income (loss) |  |           | 1,661  |  |           |  | (376   | )       |  |  | 60      |   |  |                       | 5    |   |       |  | 1  |   |  |  | 1,351  | 



|(a) | Entirely related to sales to third parties.
|--- | -------------------------------------------



F-40



---

##### Table of Contents

6. Cost of sales

The Companys cost of sales and the relevant expenses charged to cost of sales are broken down as follows:



|                                         |  |       |     |  |      |  |        |      |  |  |        |   |  |  |        |  
|---------------------------------------- |  | ----- | --- |  | ---- |  | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                         |  | Notes |     |  | 2015 |  |        | 2014 |  |  | 2013   |  
|Inventories at the beginning of the year |  |       |     |  |      |  | 2,018  |      |  |  | 1,368  |   |  |  | 1,068  |  
|Purchases, consumptions and other        |  |       |     |  |      |  | 6,889  |      |  |  | 6,681  |   |  |  | 4,762  |  
|Expenses attributable to cost of sales   |  |       | 6.1 |  |      |  | 8,855  |      |  |  | 8,459  |   |  |  | 6,798  |  
|                                         |  |       |     |  |      |  |        |      |  |  |        |   |  |  |        |  
|                                         |  |       |     |  |      |  | 17,762 |      |  |  | 16,508 |   |  |  | 12,628 |  
|Inventories at the end of the year       |  |       |     |  |      |  | (2,208 | )    |  |  | (2,018 | ) |  |  | (1,368 | )
|                                         |  |       |     |  |      |  |        |      |  |  |        |   |  |  |        |  
|Cost of sales                            |  |       |     |  |      |  | 15,554 |      |  |  | 14,490 |   |  |  | 11,260 |  
|                                         |  |       |     |  |      |  |        |      |  |  |        |   |  |  |        |  

6.1. Expenses attributable to cost of sales



|                                              |  |      |       |   |      |  |       |      |  |  |       |  
|--------------------------------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                              |  | 2015 |       |   | 2014 |  |       | 2013 | 
|Salaries and wages                            |  |      | 1,004 |   |      |  | 755   |      |  |  | 604   |  
|Other benefits to personnel                   |  |      | 219   |   |      |  | 165   |      |  |  | 132   |  
|Taxes, charges and contributions              |  |      | 53    |   |      |  | 39    |      |  |  | 25    |  
|Fees and professional advisory                |  |      | 11    |   |      |  | 4     |      |  |  | 4     |  
|Depreciation of property, plant and equipment |  |      | 2,549 |   |      |  | 2,558 |      |  |  | 2,131 |  
|Oil and gas royalties                         |  |      | 1,689 |   |      |  | 1,560 |      |  |  | 1,128 |  
|Spare parts and repairs                       |  |      | 569   |   |      |  | 619   |      |  |  | 580   |  
|Transportation and freights                   |  |      | 149   |   |      |  | 228   |      |  |  | 179   |  
|Procurement of works and services             |  |      | 2,355 |   |      |  | 2,325 |      |  |  | 1,812 |  
|Fuel, gas, energy and other                   |  |      | 104   |   |      |  | 130   |      |  |  | 119   |  
|Other operating costs and consumptions        |  |      | 208   |   |      |  | 193   |      |  |  | 150   |  
|Expense reimbursements                        |  |      | (55   | ) |      |  | (117  | )    |  |  | (66   | )
|                                              |  |      |       |   |      |  |       |      |  |  |       |  
|                                              |  |      | 8,855 |   |      |  | 8,459 |      |  |  | 6,798 |  
|                                              |  |      |       |   |      |  |       |      |  |  |       |  

7. Administrative and selling expenses



|                                              |  |      |       |   |      |  |       |      |  |  |       |  
|--------------------------------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                              |  | 2015 |       |   | 2014 |  |       | 2013 | 
|Salaries and wages                            |  |      | 1,035 |   |      |  | 779   |      |  |  | 665   |  
|Other benefits to personnel                   |  |      | 262   |   |      |  | 183   |      |  |  | 160   |  
|Taxes, charges and contributions              |  |      | 536   |   |      |  | 477   |      |  |  | 340   |  
|Fees and professional advisory                |  |      | 150   |   |      |  | 142   |      |  |  | 100   |  
|Depreciation of property, plant and equipment |  |      | 81    |   |      |  | 74    |      |  |  | 63    |  
|Spare parts and repairs                       |  |      | 121   |   |      |  | 108   |      |  |  | 60    |  
|Transportation and freights                   |  |      | 496   |   |      |  | 441   |      |  |  | 343   |  
|Procurement of works and services             |  |      | 308   |   |      |  | 213   |      |  |  | 133   |  
|Fuel, gas, energy and other                   |  |      | 16    |   |      |  | 13    |      |  |  | 10    |  
|Other operating costs and consumptions        |  |      | 95    |   |      |  | 104   |      |  |  | 57    |  
|Expense reimbursements                        |  |      | (179  | ) |      |  | (118  | )    |  |  | (134  | )
|                                              |  |      |       |   |      |  |       |      |  |  |       |  
|                                              |  |      | 2,921 |   |      |  | 2,416 |      |  |  | 1,797 |  
|                                              |  |      |       |   |      |  |       |      |  |  |       |  

8. Exploration expenses



|                                              |  |      |     |  |      |  |    |      |  |  |    | 
|--------------------------------------------- |  | ---- | --- |  | ---- |  | -- | ---- |  |  | -- | 
|                                              |  | 2015 |     |  | 2014 |  |    | 2013 | 
|Geological and geophysical expenses           |  |      | 65  |  |      |  | 59 |      |  |  | 55 | 
|Abandoned and non-productive well write-downs |  |      | 83  |  |      |  | 11 |      |  |  | 27 | 
|                                              |  |      |     |  |      |  |    |      |  |  |    | 
|                                              |  |      | 148 |  |      |  | 70 |      |  |  | 82 | 
|                                              |  |      |     |  |      |  |    |      |  |  |    | 



F-41



---

##### Table of Contents

9. Other operating expenses, net



|                                                 |  |       |        |  |      |  |      |      |  |  |      |   |  |  |      |  
|------------------------------------------------ |  | ----- | ------ |  | ---- |  | ---- | ---- |  |  | ---- | - |  |  | ---- | -
|                                                 |  | Notes |        |  | 2015 |  |      | 2014 |  |  | 2013 |  
|Advisory services rendered to other companies    |  |       |        |  |      |  | 29   |      |  |  | 42   |   |  |  | 39   |  
|Taxes on bank transactions                       |  |       |        |  |      |  | (315 | )    |  |  | (262 | ) |  |  | (197 | )
|Contingencies                                    |  |       |        |  |      |  | (9   | )    |  |  | (109 | ) |  |  | (103 | )
|Enviromental costs                               |  |       |        |  |      |  | (29  | )    |  |  | (193 | ) |  |  | (27  | )
|Result from sale of Puesto Hernández             |  |       | 29.5   |  |      |  |     |      |  |  | 181  |   |  |  |     |  
|Result from sale of Distrilec S.A.               |  |       | 17.1.1 |  |      |  |     |      |  |  |     |   |  |  | (34  | )
|Impairment Cola y Caranda in Bolivia (*)         |  |       | 19     |  |      |  | (164 | )    |  |  | (94  | ) |  |  |     |  
|Impairment Santa Cruz II area (*)                |  |       | 19     |  |      |  |     |      |  |  |     |   |  |  | (11  | )
|Impairment El Tordillo area (*)                  |  |       | 19     |  |      |  | (471 | )    |  |  |     |   |  |  |     |  
|Disposal of property, plant and equipment        |  |       |        |  |      |  |     |      |  |  | (10  | ) |  |  | (30  | )
|Result from sale of Austral Basin                |  |       | 29.5   |  |      |  | 675  |      |  |  |     |   |  |  |     |  
|Crude oil transportation agreement with OCP      |  |       | 30     |  |      |  | 507  |      |  |  |     |   |  |  |     |  
|Cease of operations in Jagüel de los Machos area |  |       | 29.6   |  |      |  | (121 | )    |  |  |     |   |  |  |     |  
|Other                                            |  |       |        |  |      |  | (225 | )    |  |  | (334 | ) |  |  | (208 | )
|                                                 |  |       |        |  |      |  |      |      |  |  |      |   |  |  |      |  
|                                                 |  |       |        |  |      |  | (123 | )    |  |  | (779 | ) |  |  | (571 | )
|                                                 |  |       |        |  |      |  |      |      |  |  |      |   |  |  |      |  



|(*) | Corresponds to Oil and Gas Exploration and Production business segment
|--- | ------------------------------------------------------------------------

10. Financial results



|                        |  |      |         |  |      |  |        |      |  |  |        |   |  |  |      |  
|----------------------- |  | ---- | ------- |  | ---- |  | ------ | ---- |  |  | ------ | - |  |  | ---- | -
|                        |  | Note |         |  | 2015 |  |        | 2014 |  |  | 2013   |  
|Financial income        |  |      |         |  |      |  |        |      |  |  |        |   |  |  |      |  
|Interest                |  |      |         |  |      |  | 338    |      |  |  | 245    |   |  |  | (226 | )
|Foreign exchange gains  |  |      | 4.1.1.1 |  |      |  | 1,073  |      |  |  | 850    |   |  |  | 668  |  
|Other                   |  |      |         |  |      |  | 128    |      |  |  | 29     |   |  |  | 42   |  
|                        |  |      |         |  |      |  |        |      |  |  |        |   |  |  |      |  
|                        |  |      |         |  |      |  | 1,539  |      |  |  | 1,124  |   |  |  | 936  |  
|                        |  |      |         |  |      |  |        |      |  |  |        |   |  |  |      |  
|Financial costs         |  |      |         |  |      |  |        |      |  |  |        |   |  |  |      |  
|Interest                |  |      |         |  |      |  | (226   | )    |  |  | (214   | ) |  |  | (231 | )
|Foreign exchange losses |  |      | 4.1.1.1 |  |      |  | (1,033 | )    |  |  | (543   | ) |  |  | (497 | )
|Other                   |  |      |         |  |      |  | (333   | )    |  |  | (295   | ) |  |  | (155 | )
|                        |  |      |         |  |      |  |        |      |  |  |        |   |  |  |      |  
|                        |  |      |         |  |      |  | (1,592 | )    |  |  | (1,052 | ) |  |  | (883 | )
|                        |  |      |         |  |      |  |        |      |  |  |        |   |  |  |      |  

11. Current and deferred income tax

The Companys tax expense and deferred tax balances are as follows:



|                        |  |                   |        |   |             |  |      |             |  |  |                   |   |  |        |        |   |       |  |      |                   |  |  |        |   |  |       |      |   |  |  |      |   |  |  |      |  
|----------------------- |  | ----------------- | ------ | - | ----------- |  | ---- | ----------- |  |  | ----------------- | - |  | ------ | ------ | - | ----- |  | ---- | ----------------- |  |  | ------ | - |  | ----- | ---- | - |  |  | ---- | - |  |  | ---- | -
|                        |  | 2015              |        |   | 2014        |  |      | 2013        | 
|                        |  | Recorded in       |        |   | Recorded in |  |      | Recorded in | 
|                        |  | Statementofincome |        |   | OCI(a)      |  |      | Total       |  |  | Statementofincome |   |  | OCI(a) |        |   | Total |  |      | Statementofincome |  |  | OCI(a) |   |  | Total |     
|Income tax for the year |  |                   |        |   |             |  |      |             |  |  |                   |   |  |        |        |   |       |  |      |                   |  |  |        |   |  |       |      |   |  |  |      |   |  |  |      |  
|Current                 |  |                   | (1,239 | ) |             |  | 644  |             |  |  | (595              | ) |  |        | (1,246 | ) |       |  | 334  |                   |  |  | (912   | ) |  |       | (703 | ) |  |  | 330  |   |  |  | (373 | )
|Deferred                |  |                   | 268    |   |             |  | (672 | )           |  |  | (404              | ) |  |        | 504    |   |       |  | (408 | )                 |  |  | 96     |   |  |       | 151  |   |  |  | (345 | ) |  |  | (194 | )
|                        |  |                   |        |   |             |  |      |             |  |  |                   |   |  |        |        |   |       |  |      |                   |  |  |        |   |  |       |      |   |  |  |      |   |  |  |      |  
|Total income tax        |  |                   | (971   | ) |             |  | (28  | )           |  |  | (999              | ) |  |        | (742   | ) |       |  | (74  | )                 |  |  | (816   | ) |  |       | (552 | ) |  |  | (15  | ) |  |  | (567 | )
|                        |  |                   |        |   |             |  |      |             |  |  |                   |   |  |        |        |   |       |  |      |                   |  |  |        |   |  |       |      |   |  |  |      |   |  |  |      |  



|(a) | It relates to the tax effect of exchange differences resulting from: (i) revaluation of net investments in foreign operations (with effect on deferred tax), and (ii) revaluation of indebtedness denominated in
foreign currency designated as hedge for that investment (with effect on current tax).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-42



---

##### Table of Contents

|                    |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  
|------------------- |  | --------------------- | --- | - | ---------------------- |  | --- | --------------------------- |  |  | ----- |  |  | ----------- | --- | - |  |  | --- | -
|Deferred tax assets |  | Reservesandprovisions |     |   | Pensionplanobligations |  |     | Property,plant andequipment |  |  | Other |  |  | Totalassets |    
|12/31/2012          |  |                       | 105 |   |                        |  | 96  |                             |  |  | 3     |  |  |             | 86  |   |  |  | 290 |  
|                    |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  
|Recorder in         |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  
|Statement of income |  |                       | (56 | ) |                        |  | 32  |                             |  |  | 3     |  |  |             | (23 | ) |  |  | (44 | )
|Equity              |  |                       |    |   |                        |  | (5  | )                           |  |  |      |  |  |             |    |   |  |  | (5  | )
|                    |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  
|12/31/2013          |  |                       | 49  |   |                        |  | 123 |                             |  |  | 6     |  |  |             | 63  |   |  |  | 241 |  
|                    |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  
|Recorder in         |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  
|Statement of income |  |                       | (14 | ) |                        |  | 49  |                             |  |  | 26    |  |  |             | 79  |   |  |  | 140 |  
|Equity              |  |                       |    |   |                        |  | (1  | )                           |  |  |      |  |  |             |    |   |  |  | (1  | )
|                    |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  
|12/31/2014          |  |                       | 35  |   |                        |  | 171 |                             |  |  | 32    |  |  |             | 142 |   |  |  | 380 |  
|                    |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  
|Recorder in         |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  
|Statement of income |  |                       | (96 | ) |                        |  | 38  |                             |  |  | 1     |  |  |             | (3  | ) |  |  | (60 | )
|Equity              |  |                       |    |   |                        |  | (24 | )                           |  |  |      |  |  |             |    |   |  |  | (24 | )
|                    |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  
|12/31/2015          |  |                       | (61 | ) |                        |  | 185 |                             |  |  | 33    |  |  |             | 139 |   |  |  | 296 |  
|                    |  |                       |     |   |                        |  |     |                             |  |  |       |  |  |             |     |   |  |  |     |  



|                         |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  
|------------------------ |  | ------------------------------------ | ---- | - | --------------- |  | -- | -------------------------- |  |  | ----- | - |  | ---------------- | ---- | - |  |  | ------ | -
|Deferred tax liabilities |  | Property,plant andequipmentand other |      |   | Prepaidexpenses |  |    | Equityinterestinaffiliates |  |  | Other |   |  | Totalliabilities |     
|12/31/2012               |  |                                      | (122 | ) |                 |  | (2 | )                          |  |  | (363  | ) |  |                  | (157 | ) |  |  | (644   | )
|                         |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  
|Recorder in              |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  
|Statement of income      |  |                                      | 151  |   |                 |  | 1  |                            |  |  | 194   |   |  |                  | (151 | ) |  |  | 195    |  
|Equity                   |  |                                      |     |   |                 |  |   |                            |  |  | (340  | ) |  |                  |     |   |  |  | (340   | )
|                         |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  
|12/31/2013               |  |                                      | 29   |   |                 |  | (1 | )                          |  |  | (509  | ) |  |                  | (308 | ) |  |  | (789   | )
|                         |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  
|Recorder in              |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  
|Statement of income      |  |                                      | (348 | ) |                 |  |   |                            |  |  | 532   |   |  |                  | 180  |   |  |  | 364    |  
|Equity                   |  |                                      |     |   |                 |  |   |                            |  |  | (407  | ) |  |                  |     |   |  |  | (407   | )
|                         |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  
|12/31/2014               |  |                                      | (319 | ) |                 |  | (1 | )                          |  |  | (384  | ) |  |                  | (128 | ) |  |  | (832   | )
|                         |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  
|Recorder in              |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  
|Statement of income      |  |                                      | (217 | ) |                 |  |   |                            |  |  | 584   |   |  |                  | (39  | ) |  |  | 328    |  
|Equity                   |  |                                      |     |   |                 |  |   |                            |  |  | (648  | ) |  |                  |     |   |  |  | (648   | )
|                         |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  
|12/31/2015               |  |                                      | (536 | ) |                 |  | (1 | )                          |  |  | (448  | ) |  |                  | (167 | ) |  |  | (1,152 | )
|                         |  |                                      |      |   |                 |  |    |                            |  |  |       |   |  |                  |      |   |  |  |        |  



F-43



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##### Table of Contents

|                    |  |                       |     |   |                        |  |        |       |  |  |      |     
|------------------- |  | --------------------- | --- | - | ---------------------- |  | ------ | ----- |  |  | ---- | ----
|                    |  | Deferredtaxassets (*) |     |   | Deferredtaxliabilities |  |        | Total | 
|12/31/2012          |  |                       | 290 |   |                        |  | (644   | )     |  |  | (354 | )   
|                    |  |                       |     |   |                        |  |        |       |  |  |      |     
|Recorder in         |  |                       |     |   |                        |  |        |       |  |  |      |     
|Statement of income |  |                       | (44 | ) |                        |  | 195    |       |  |  | 151  |     
|Equity              |  |                       | (5  | ) |                        |  | (340   | )     |  |  | (345 | )   
|                    |  |                       |     |   |                        |  |        |       |  |  |      |     
|12/31/2013          |  |                       | 241 |   |                        |  | (789   | )     |  |  | (548 | )   
|                    |  |                       |     |   |                        |  |        |       |  |  |      |     
|Recorder in         |  |                       |     |   |                        |  |        |       |  |  |      |     
|Statement of income |  |                       | 140 |   |                        |  | 364    |       |  |  | 504  |     
|Equity              |  |                       | (1  | ) |                        |  | (407   | )     |  |  | (408 | )   
|                    |  |                       |     |   |                        |  |        |       |  |  |      |     
|12/31/2014          |  |                       | 380 |   |                        |  | (832   | )     |  |  | (452 | )(a)
|                    |  |                       |     |   |                        |  |        |       |  |  |      |     
|Recorder in         |  |                       |     |   |                        |  |        |       |  |  |      |     
|Statement of income |  |                       | (60 | ) |                        |  | 328    |       |  |  | 268  |     
|Equity              |  |                       | (24 | ) |                        |  | (648   | )     |  |  | (672 | )   
|                    |  |                       |     |   |                        |  |        |       |  |  |      |     
|12/31/2014          |  |                       | 296 |   |                        |  | (1,152 | )     |  |  | (856 | )(b)
|                    |  |                       |     |   |                        |  |        |       |  |  |      |     



|(a) | 47 in Deferred Tax Assets and (499) in Deferred Tax Liabilities.
|--- | --------------------------------------------------------------------

|(b) | 7 in Deferred Tax Assets and (863) in Deferred Tax Liabilities.
|--- | -------------------------------------------------------------------

|(*) | The Company management evaluates the recoverability of differences taking into account, inter alia, the projected business profits, tax planning strategies, temporariness of future taxable income taking into account the
limitation period of carryforwards, future reversals of existing temporary differences and tax history of recent years. All available evidence, both positive and negative, properly weighted, is considered in the analysis.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Term reversal of deferred income taxes

The Company believes that the assets / deferred tax liabilities will be based upon estimates based on the realization of provisions and final
resolution to future events.

The estimated timetable for recovery / reversal of assets / deferred tax liabilities as of December 31,
2015 is detailed in the following table:



|             |  |                     |     |  |             |  |        |  
|------------ |  | ------------------- | --- |  | ----------- |  | ------ | -
|             |  | Deferred income tax |    
|             |  | Assets              |     |  | Liabilities | 
|2016         |  |                     | 24  |  |             |  | (119   | )
|2017 onwards |  |                     | 272 |  |             |  | (1,033 | )
|             |  |                     |     |  |             |  |        |  
|Total        |  |                     | 296 |  |             |  | (1,152 | )
|             |  |                     |     |  |             |  |        |  



F-44



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##### Table of Contents

The reconciliation of the income tax expense in the statements of income and the
one that would result from the application of the prevailing income tax rate of the 35% to the income before taxes and the non-controlling interest is as follow:



|                                                             |  |      |    |   |      |  |       |      |  |  |       |   |  |  |       |  
|------------------------------------------------------------ |  | ---- | -- | - | ---- |  | ----- | ---- |  |  | ----- | - |  |  | ----- | -
|                                                             |  | Note |    |   | 2015 |  |       | 2014 |  |  | 2013  |  
|Income before income tax                                     |  |      |    |   |      |  | 1,866 |      |  |  | 1,320 |   |  |  | 1,404 |  
|Blended income tax rate                                      |  |      |    |   |      |  | 35    | %    |  |  | 35    | % |  |  | 35    | %
|                                                             |  |      |    |   |      |  |       |      |  |  |       |   |  |  |       |  
|Income for the period at statutory tax rate                  |  |      |    |   |      |  | (653  | )    |  |  | (462  | ) |  |  | (491  | )
|- Items on translation of financial statements               |  |      |    |   |      |  | (369  | )    |  |  | (154  | ) |  |  | (121  | )
|- Share of net profit (loss) of equity accounted investments |  |      |    |   |      |  | (9    | )    |  |  | (164  | ) |  |  | 8     |  
|- Sales in equity interest                                   |  |      |    |   |      |  | 4     |      |  |  | 24    |   |  |  | 121   |  
|- Permanent differences in foreign subsidiaries              |  |      |    |   |      |  | 214   |      |  |  | 3     |   |  |  | 6     |  
|- Cash dividends and other investments items                 |  |      |    |   |      |  |      |      |  |  | 16    |   |  |  | 20    |  
|- Others                                                     |  |      |    |   |      |  | (145  | )    |  |  | (11   | ) |  |  | 35    |  
|                                                             |  |      |    |   |      |  |       |      |  |  |       |   |  |  |       |  
|Subtotal                                                     |  |      |    |   |      |  | (958  | )    |  |  | (748  | ) |  |  | (422  | )
|- Change allowance for active differences                    |  |      | (a | ) |      |  | (13   | )    |  |  | 6     |   |  |  | (130  | )
|                                                             |  |      |    |   |      |  |       |      |  |  |       |   |  |  |       |  
|                                                             |  |      |    |   |      |  | (971  | )    |  |  | (742  | ) |  |  | (552  | )
|                                                             |  |      |    |   |      |  |       |      |  |  |       |   |  |  |       |  



|(a) | It corresponds mainly to the sale of equity investments.
|--- | --------------------------------------------------------

The Company has the
following unrecognized carryforwards in the financial statements, which can be used until the dates below:



|             |  |      |     |  |      |  |     |      |  |  |     | 
|------------ |  | ---- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|             |  | 2015 |     |  | 2014 |  |     | 2013 | 
|2016         |  |      |    |  |      |  | 2   |      |  |  | 2   | 
|2017 onwards |  |      | 120 |  |      |  | 119 |      |  |  | 121 | 
|             |  |      |     |  |      |  |     |      |  |  |     | 
|             |  |      | 120 |  |      |  | 121 |      |  |  | 123 | 
|             |  |      |     |  |      |  |     |      |  |  |     | 

Income tax assets and liabilities:



|                                      |  |      |     |  |      |  |     |      |  |  |     | 
|------------------------------------- |  | ---- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                                      |  | 2015 |     |  | 2014 |  |     | 2013 | 
|Included in current other receivables |  |      | 194 |  |      |  | 27  |      |  |  | 226 | 
|Included in taxes payable             |  |      | 105 |  |      |  | 485 |      |  |  | 86  | 

12. Earnings per share

Basic and diluted earnings per share attributable to the controlling companys shareholders are calculated as follows:



|                                                      |  |      |               |  |      |  |               |      |  |  |               | 
|----------------------------------------------------- |  | ---- | ------------- |  | ---- |  | ------------- | ---- |  |  | ------------- | 
|                                                      |  | 2015 |               |  | 2014 |  |               | 2013 | 
|Numerator:                                            |  |      |               |  |      |  |               |      |  |  |               | 
|Income attributable to shareholders of parent company |  |      | 853           |  |      |  | 458           |      |  |  | 779           | 
|Denominator:                                          |  |      |               |  |      |  |               |      |  |  |               | 
|Weighted average number of ordinary shares            |  |      | 2,019,236,820 |  |      |  | 2,019,236,820 |      |  |  | 2,019,236,820 | 

There have been no transactions involving common shares or potential common shares between the
year closing date and the presentation of these financial statements.



F-45



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##### Table of Contents

13. Cash and cash equivalents



|                          |  |      |       |  |      |  |       |      |  |  |       | 
|------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                          |  | 2015 |       |  | 2014 |  |       | 2013 | 
|Cash and banks            |  |      | 116   |  |      |  | 177   |      |  |  | 116   | 
|Time deposits             |  |      | 535   |  |      |  | 835   |      |  |  | 231   | 
|Mutual funds              |  |      | 1,578 |  |      |  | 1,266 |      |  |  | 846   | 
|                          |  |      |       |  |      |  |       |      |  |  |       | 
|Cash and cash equivalents |  |      | 2,229 |  |      |  | 2,278 |      |  |  | 1,193 | 
|                          |  |      |       |  |      |  |       |      |  |  |       | 

Additional information about Cash Flows

The Company uses the indirect method which requires adjustments to net income for the year to calculate net cash provided by
operations.

The main transactions that did not have an impact on cash and cash equivalent and were excluded from the
statements of cash flow as of December 31, 2015, 2014 and 2013 are the following:



|                                                                          |  |     |  |      |     |  |      |  |     |      |  |  |     | 
|------------------------------------------------------------------------- |  | --- |  | ---- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                                                                          |  |     |  | 2015 |     |  | 2014 |  |     | 2013 | 
|Acquisition of property, plant and equipment                              |  | (a) |  |      | 225 |  |      |  | 49  |      |  |  | 216 | 
|Acquisition of property, plant and equipment related to oil and gas areas |  | (b) |  |      |    |  |      |  | 670 |      |  |  |    | 



|(a) | Operations in 2015 correspond: 98 to Gas and Energy business segment, 77 to Oil and Gas Exploration and Production business segment and 50 to the rest of the business segments. Operations in 2014
and 2013 mainly correspond to Oil and Gas Exploration and Production business segment.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Corresponds to Oil and Gas Exploration and Production business segment.
|--- | -------------------------------------------------------------------------

14. Trade receivables



|                                       |  |      |    |   |         |  |       |             |  |  |         |   |  |             |       |   |         |  |     |             |  |  |       |   |  |  |     |  
|-------------------------------------- |  | ---- | -- | - | ------- |  | ----- | ----------- |  |  | ------- | - |  | ----------- | ----- | - | ------- |  | --- | ----------- |  |  | ----- | - |  |  | --- | -
|                                       |  |      |    |   | 2015    |  |       | 2014        |  |  | 2013    |  
|                                       |  | Note |    |   | Current |  |       | Non-current |  |  | Current |   |  | Non-current |       |   | Current |  |     | Non-current | 
|Receivables                            |  |      |    |   |         |  |       |             |  |  |         |   |  |             |       |   |         |  |     |             |  |  |       |   |  |  |     |  
|Petrochemical                          |  |      |    |   |         |  | 462   |             |  |  |        |   |  |             | 474   |   |         |  |    |             |  |  | 463   |   |  |  |    |  
|Refining and distribution              |  |      |    |   |         |  | 646   |             |  |  | 6       |   |  |             | 616   |   |         |  | 6   |             |  |  | 541   |   |  |  | 6   |  
|Oil and gas exploration and production |  |      |    |   |         |  | 402   |             |  |  | 139     |   |  |             | 370   |   |         |  | 92  |             |  |  | 323   |   |  |  | 74  |  
|Gas and energy                         |  |      |    |   |         |  | 1,761 |             |  |  | 36      |   |  |             | 1,474 |   |         |  | 49  |             |  |  | 1,183 |   |  |  | 62  |  
|Related companies                      |  |      | 28 |   |         |  | 22    |             |  |  |        |   |  |             | 67    |   |         |  |    |             |  |  | 43    |   |  |  |    |  
|                                       |  |      |    |   |         |  |       |             |  |  |         |   |  |             |       |   |         |  |     |             |  |  |       |   |  |  |     |  
|                                       |  |      |    |   |         |  | 3,293 |             |  |  | 181     |   |  |             | 3,001 |   |         |  | 147 |             |  |  | 2,553 |   |  |  | 142 |  
|Less: Allowance for doubtful           |  |      | (a | ) |         |  | (52   | )           |  |  | (133    | ) |  |             | (56   | ) |         |  | (87 | )           |  |  | (34   | ) |  |  | (69 | )
|                                       |  |      |    |   |         |  |       |             |  |  |         |   |  |             |       |   |         |  |     |             |  |  |       |   |  |  |     |  
|                                       |  |      | (b | ) |         |  | 3,241 |             |  |  | 48      |   |  |             | 2,945 |   |         |  | 60  |             |  |  | 2,519 |   |  |  | 73  |  
|                                       |  |      |    |   |         |  |       |             |  |  |         |   |  |             |       |   |         |  |     |             |  |  |       |   |  |  |     |  



|a) | The activity in the years ended December 31, 2015, 2014 and 2013, includes (42), (40) and (9) charged to Administrative and selling expenses.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------

|b) | As of December 31, 2015, 2014 and 2013 current trade receivables include an average of 13%, 8%and 4%, respectively of non-impaired past due, which do not exceed a period of 3 months.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-46



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##### Table of Contents

15. Other receivables



|                                                            |  |      |    |   |         |  |       |             |  |  |         |   |  |             |       |  |         |  |      |             |  |  |       |  |  |  |      |  
|----------------------------------------------------------- |  | ---- | -- | - | ------- |  | ----- | ----------- |  |  | ------- | - |  | ----------- | ----- |  | ------- |  | ---- | ----------- |  |  | ----- |  |  |  | ---- | -
|                                                            |  |      |    |   | 2015    |  |       | 2014        |  |  | 2013    |  
|                                                            |  | Note |    |   | Current |  |       | Non-current |  |  | Current |   |  | Non-current |       |  | Current |  |      | Non-current | 
|Joint operations                                            |  |      |    |   |         |  | 14    |             |  |  |        |   |  |             | 8     |  |         |  |     |             |  |  | 67    |  |  |  |     |  
|Related companies                                           |  |      | 28 |   |         |  | 621   |             |  |  |        |   |  |             | 440   |  |         |  |     |             |  |  | 409   |  |  |  |     |  
|Tax credits                                                 |  |      |    |   |         |  | 386   |             |  |  | 68      |   |  |             | 268   |  |         |  | 67   |             |  |  | 364   |  |  |  | 79   |  
|Contractual credit in Ecuador                               |  |      |    |   |         |  | 698   |             |  |  |        |   |  |             | 458   |  |         |  |     |             |  |  | 347   |  |  |  |     |  
|Expenses reimbursements                                     |  |      |    |   |         |  | 2     |             |  |  |        |   |  |             | 1     |  |         |  |     |             |  |  | 2     |  |  |  |     |  
|Prepaid expenses                                            |  |      |    |   |         |  | 203   |             |  |  | 16      |   |  |             | 166   |  |         |  | 20   |             |  |  | 75    |  |  |  | 13   |  
|Credit for new projects in the mixed companies in Venezuela |  |      |    |   |         |  |      |             |  |  | 1,153   |   |  |             |      |  |         |  | 756  |             |  |  |      |  |  |  | 574  |  
|Allowance for other receivables                             |  |      | (a | ) |         |  |      |             |  |  | (1,153  | ) |  |             |      |  |         |  | (756 | )           |  |  |      |  |  |  | (574 | )
|Guarantee deposits                                          |  |      |    |   |         |  | 414   |             |  |  | 77      |   |  |             | 11    |  |         |  | 48   |             |  |  | 7     |  |  |  | 40   |  
|Stimulus Program for Surplus Injection of Natural Gas       |  |      |    |   |         |  | 521   |             |  |  |        |   |  |             |      |  |         |  |     |             |  |  |      |  |  |  |     |  
|Other                                                       |  |      |    |   |         |  | 241   |             |  |  | 25      |   |  |             | 324   |  |         |  | 28   |             |  |  | 280   |  |  |  | 113  |  
|                                                            |  |      |    |   |         |  |       |             |  |  |         |   |  |             |       |  |         |  |      |             |  |  |       |  |  |  |      |  
|                                                            |  |      | (b | ) |         |  | 3,100 |             |  |  | 186     |   |  |             | 1,676 |  |         |  | 163  |             |  |  | 1,551 |  |  |  | 245  |  
|                                                            |  |      |    |   |         |  |       |             |  |  |         |   |  |             |       |  |         |  |      |             |  |  |       |  |  |  |      |  



|a) | Activity of (397), (182) and (140) in the years ended December 31, 2015, 2014 and 2013, respectively are shown in line Other comprehensive income.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------

|b) | As of December 31, 2015, 2014 and 2013 current receivables include an average of 2%, 9% and 4%, respectively of non-impaired credits that are past due and do not exceed a period of 3 months as of each year end.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

16. Inventories



|                                    |  |         |       |  |             |  |    |         |  |  |             |  |  |         |    |  |             |  |       |  |  |  |    | 
|----------------------------------- |  | ------- | ----- |  | ----------- |  | -- | ------- |  |  | ----------- |  |  | ------- | -- |  | ----------- |  | ----- |  |  |  | -- | 
|                                    |  | 2015    |       |  | 2014        |  |    | 2013    | 
|                                    |  | Current |       |  | Non-current |  |    | Current |  |  | Non-current |  |  | Current |    |  | Non-current | 
|Crude oil stock                     |  |         | 240   |  |             |  |   |         |  |  | 303         |  |  |         |   |  |             |  | 228   |  |  |  |   | 
|Raw materials and materials         |  |         | 879   |  |             |  | 78 |         |  |  | 645         |  |  |         | 67 |  |             |  | 426   |  |  |  | 58 | 
|Work progress and finished products |  |         | 1,011 |  |             |  |   |         |  |  | 1,003       |  |  |         |   |  |             |  | 656   |  |  |  |   | 
|                                    |  |         |       |  |             |  |    |         |  |  |             |  |  |         |    |  |             |  |       |  |  |  |    | 
|                                    |  |         | 2,130 |  |             |  | 78 |         |  |  | 1,951       |  |  |         | 67 |  |             |  | 1,310 |  |  |  | 58 | 
|                                    |  |         |       |  |             |  |    |         |  |  |             |  |  |         |    |  |             |  |       |  |  |  |    | 

17. Investments in related companies

17.1. Investments in joint ventures



|      |  |                           |   |  |            |  |             |            |  |  |            |  |  |  |     |  |  |  |     |  |  |  |     | 
|----- |  | ------------------------- | - |  | ---------- |  | ----------- | ---------- |  |  | ---------- |  |  |  | --- |  |  |  | --- |  |  |  | --- | 
|      |  | 2015                      |   |  | 2014       |  |             | 2013       | 
|      |  | Description of securities |   |  | Book value |  |             | Book value |  |  | Book value | 
|      |  | Face value                |   |  | Amount     |  |             | Cost       |  |  |            | 
|CIESA |  | $                         | 1 |  |            |  | 159,704,674 |            |  |  | 596        |  |  |  | 441 |  |  |  | 491 |  |  |  | 497 | 
|      |  |                           |   |  |            |  |             |            |  |  |            |  |  |  |     |  |  |  |     |  |  |  |     | 
|      |  |                           |   |  |            |  |             |            |  |  | 596        |  |  |  | 441 |  |  |  | 491 |  |  |  | 497 | 
|      |  |                           |   |  |            |  |             |            |  |  |            |  |  |  |     |  |  |  |     |  |  |  |     | 



|      |  |                                    |            |  |               |  |     |                        |  |  |        |   |  |                 |       |  |              |  |       |  |  |  |          | 
|----- |  | ---------------------------------- | ---------- |  | ------------- |  | --- | ---------------------- |  |  | ------ | - |  | --------------- | ----- |  | ------------ |  | ----- |  |  |  | -------- | 
|      |  | Last available financial statement |            |  |               |  |     |                        | 
|      |  | Date                               |            |  | Capital stock |  |     | Net incomefor the year |  |  | Equity |   |  | Percentageshare |       |  | Mainbusiness | 
|CIESA |  |                                    | 12/31/2015 |  |               |  | 639 |                        |  |  | (115   | ) |  |                 | 1,119 |  |              |  | 50.00 |  |  |  | Investor | 



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17.1.1. Distrilec

In the first quarter of 2013, the Company sold to Hidroelectrica Piedra del Águila S.A. and to La Plata
Cogeneración S.A. all of its direct and indirect interests in PEDASA and PFB, for an amount of USD 35 million, with a loss of 34 shown under Other operating expenses, net (Note 9).

Through PEDASA and PFB, the Company held an indirect ownership of 48.50% in Distrilec, parent company of EDESUR.

17.1.2. CIESA

The shareholders of CIESA, the parent company of TGS, may not sell their Class A shares representing 51% of
TGSs capital stock, without the prior authorization of the regulatory agency and the approval of the shareholders of CIESA.

17.1.3. Carrying value of the Companys interests in CIESA

As of December 31, 2015, 2014 and 2013, the carrying value of the direct and indirect holding in CIESA was 441, 491 and
497, respectively.

The book value of this interest does not exceed its recoverable value.

17.1.4. CIESA indebtedness

Following the enactment of the Public Emergency Law, CIESA defaulted on its debt during 2002. In 2004, CIESAs
shareholders entered into an agreement, that, among other things, provided for certain stock transfers in order to create the necessary flexibility to restructure CIESAs financial debt. Subsequently, on September 1, 2005 CIESAs
shareholders and financial creditors entered into CIESA Restructuring Agreement. Since January 2009, while approval of the CIESA Restructuring Agreement by the authorities has been pending, several legal claims involving Ashmore Energy
International Limited (AEI), CIESA and others have been filed before the courts of the State of New York in the United States of America.

On May 10, 2011, CIESA entered into a Memorandum of Understanding with Pampa Energía S.A., Pampa Inversiones S.A.
and Inversiones Argentina I Ltd. (Pampa Group), the holder of the 1997 CIESA Notes as successor to AEI and on May 18, 2011, CIESA, Pampa Group and PESA excecuted a forth amendment to the CIESA Restructuring Agreement providing for the
replacement of AEI with the Pampa Group as a party to the agreement. On October 5, 2011, by note No. 11,362, the ENARGAS expressed no regulatory objections to the CIESA Restructuring Agreement, which would become effective after obtaining
approval from the CNDC. As of the date of issuance of this Annual Report, the CIESA Restructuring Agreement remains subject to approval by the CNDC.

On July 13, 2012, CIESA, Pampa Group and the Company entered into a settlement agreement whereby all parties involved
waived all claims, title and interest in the lawsuit before the New York State Courts and terminated the same. As a result of the agreement, CIESA paid off all the financial debt by means of (i) the transfer to Pampa Group of 4.3% of TGSs
shares; (ii) the payment of approximately USD130 million; (iii) the release of the remaining financial debt, and (iv) execution on July 13, 2012 of a fifth amendment to the Restructuring Agreement whereby, upon obtaining
governmental approval, Pampa Group will receive additional shares representing 40% of CIESAs capital stock which are currently held in trust by The Royal Bank of Scotland N.V. Sucursal Argentina.

As a result of the full settlement of CIESAs financial debt, in 2013, CIESA notified the CNV of the formal cancellation
of the 1997 CIESA Notes. On May 30, 2013, the CNV ordered CIESAs withdrawal from public offering and listing through Resolution No. 17,904.

On March 9, 2016, Pampa Energía S.A. announced that its Board of Directors approved to initiate negotiations for
the potential sale of its indirect interest in TGS. On April 22, 2016, Pampa Energía S,A. made public that it agreed to conduct exclusive negotiations with Harz Energy, a subsidiary of Neuss Group, for 45 days, to complete the sale of
the stake and rights that it, directly or indirectly, has in TGS.



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17.1.5. Tariff situation of the public utility companies

17.1.5.1. General framework

The scenario after the enactment of the Public Emergency Law significantly changed the financial equation of the public utility
companies, which were affected, among others, by the local currency devaluation, the pesification and the elimination of indexation clauses on rates.

The Public Emergency Law provided for the conversion into Argentine pesos and the elimination of indexation clauses on public
service rates, thus fixing them at the exchange rate of ARS 1 = USD 1. In addition, the Executive Branch was empowered to renegotiate those agreements entered into to provide public services, along the following criteria: (i) rates impact on
economic competitiveness and revenue allocation, (ii) service quality and investment plans, to the extent that they were contractually agreed upon, (iii) users interest and access to services, (iv) the safety in the system involved,
and (v) companies profitability.

On February 12, 2002, the Executive Branch of Government issued Decree
No. 293/02 whereby it recommended that the Ministry of Economy and Production renegotiate the agreements executed with public utility companies. UNIREN was created in July 2003, which took over the work of the Renegotiation Commission and its
aim is, among others, to provide assistance in the public works and services renegotiation process, to execute comprehensive or partial agreements, and to submit regulatory projects related to transitory rate adjustments.

In December 2013, the Law No. 27,200 was issued, which extended the public works and services renegotiation term to
December 2017.

17.1.5.2. TGS

Provisional Agreement

After UNIREN had submitted to TGS several proposals for the tariff adjustment as provided for in the concession contract that
TGS had deemed insufficient, in October 2008 TGS executed a provisional agreement with UNIREN, which provides for a 20 % tariff increase to be retroactively applied as from September 1, 2008 and for the application of the cash from such
increase to an investment plan in the gas transportation system provided under the same agreement.

On December 3,
2009, the PEN issued Decree No. 1,918/09 ratifying the provisional agreement. As a result, TGS invoiced its clients the tariff increase once the ENARGAS will publish the new tariff schedule and will define the invoicing method of the
retroactive increase. This administrative formality, however, has not been completed and considering the excessive delay, in August 2010, TGS sent a letter to ENARGAS requesting authorization to publish the tariff schedule including the 20%
provisional tariff increase and the method for collection of the retroactive increase and the application of an interest rate in accordance with the payment terms to be defined. ENARGAS answered TGS that it had forwarded the background information
and the tariff project to the SCyCG, wich is part of the MPFIPyS, in compliance with Resolution No. 2,000/2005 issued by the MPFIPyS.

On September 30, 2010, TGS filed an action for the protection of its constitutional rights (acción de
amparo) under Section 43 of the National Constitution and Law No.16,986, against ENARGAS and SCyCG to seek implementation of the new tariff schedule. Pursuant to the favorable decision of the judge dated on November 5, 2010, affirmed
by the Court of Appeals on April 5, 2011 and by the Supreme Court which rejected on November 28, 2013 the remedy complaint (recurso de queja) filed by the Government, the 2008 provisional agreement was finally implemented in April 2014.

On April 7, 2014 through Resolution No. I-2852 ENARGAS approved tariff schedules applicable to the Natural Gas
Transportation provided by TGS, effective since April 1, 2014. Tariff schedules provide for an increase in stages: an 8% increase since April 1, 2014, an accumulated 14% increase since June 1, 2014 and an accumulated 20% increase
since August 1, 2014.

On September 19, 2014, TGS filed an appeal requesting ENARGAS to implement the retroactive
increase provisions of the 2008 provisional agreement, which was rejected on the ground that after the issuance of Resolution No. 2,852/14, ENARGAS had complied with its obligations under Decree No. 1,918/09. In April 2015, TGS appealed
such rejection, which was confirmed on November 18, 2015 by the Supreme Court.On December 19, 2014, in light of the delay in the complete implementation of Decree No. 1,918/09, TGS filed administrative claims for damages



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resulting from the ENERGAS failure to: (i) implement the retroactive increase provisions of the 2008 provisional agreement for the period between September 1, 2008 and
March 31, 2014 and (ii) adjust the charge for Access and Use (CAU).

On June 5, 2015 through
Resolution No. 3,347/15, additional Resolution I-2852, ENARGAS approved an increase in tariff schedules applicable to the Natural Gas transportation effective since May 1, 2015. This increase represents a 44.3% temporary increase in the
price for the natural gas transportation service and a 73.2% increase in CAU for TGS.

Resolution No. 7 of the
Ministry of Energy and Mining of Argentina ( B.O. 28.01.2016 ) repealed the Resolution 2000/2005 of MPFIPyS available to all tariff increase should be pre SCyCG intervention , depending on the agency.

These transitional adjustments were made in advance of future increases allowed pursuant to the comprehensive renegotiation
process. Pursuant to Resolution No. 31/16 of the Ministry of Energy and Mining, TGS and the ENARGAS are expected to conclude the Renegotiation Process in the next twelve months following the issuance of Resolution No. 3,724/16.

On March 31, 2016, the ENARGAS issued Resolution No. 3,724, which approved the tariff schedule as from April 1,
2016, including the CAU for Natural Gas Transportation business segment, which represents a 200.1% increase. This increase is associated with the implementation of a Mandatory Investment Plan to be fulfilled by TGS between April 2016 and March 2017,
involving future capital expenditures of Ps.794.3 million overseen by the ENARGAS. Furthermore, TGS shall submit evidence of compliance with the mentioned Investment Plan to obtain ENARGAS prior authorization to pay dividends.

These increases represent partial recognition of the prior administrative claims filed by TGS, and as such, TGS will continue
with all legal actions initiated until it obtains full enforcement of its rights, including those necessary to accomplish the execution of the comprehensive agreement.

Comprehensive Agreement

Early in October 2008, TGS received from UNIREN a proposal for a comprehensive renegotiation agreement (including the 20%
initial tariff increase). In October 2011, TGS received a new proposal from UNIREN which was accepted by TGS, allowing UNIREN to initiate the relevant administrative procedure.

In October 2015, it was initialed by TGS and UNIREN a new version of the Act Comprehensive Agreement to incorporate as legal
predecessor of the same, Resolution No.3,347. The sustainable recovery of the natural gas transportation business, which is strategic for the development of the Argentine economy, will depend on the effective implementation of the comprehensive
renegotiation agreement.

On February 16, 2016, through Decree No. 367/2016, UNIREN was dissolved and the
responsibility for the renegotiation of public service agreements was transfered to the ministries with jurisdiction over the relevant activity. It also empowered such ministries jointly with the Ministry of Economy and Public Finance to conclude
any partial renegotiation agreements and temporary price and tariff adjustments that may be necessary to ensure the continuity of the normal provision of the corresponding public services, until the completion of the comprehensive renegotiation
process, which shall be effected as an advance of future increases pursuant to the comprehensive tariff review. The Ministry of Energy and Mining, together with the Ministry of Economy and Public Finance, assumed UNIRENs responsabilities with
regard to TGSs renegotiation process.

Pursuant to Resolution No. 31/16 of the Ministry of Energy and Mining,
TGS and the ENARGAS are expected to conclude the Renegotiation Process in the next twelve months following the issuance of Resolution No. 3,724/16, on March 31, 2016.

Investment CIESA / TGS

As of December 31, 2015 the book value of the investment in CIESA (TGSs controlling shareholder ) is 441 and
represents about 2% of the total assets of Petrobras Argentina.



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17.2. Investment in associates



|                             |  |      |  |                           |      |  |            |  |            |            |  |  |            |  |  |  |        |   |  |  |        |   |  |  |        |  
|---------------------------- |  | ---- |  | ------------------------- | ---- |  | ---------- |  | ---------- | ---------- |  |  | ---------- |  |  |  | ------ | - |  |  | ------ | - |  |  | ------ | -
|                             |  |      |  | 2015                      |      |  | 2014       |  |            | 2013       | 
|                             |  |      |  | Description of securities |      |  | Book value |  |            | Book value |  |  | Book value | 
|                             |  | Note |  | Face value                |      |  | Amount     |  |            | Cost       |  |  |            | 
|OCP                          |  |      |  | U$S                       | 0,01 |  |            |  | 31,500     |            |  |  | 98         |  |  |  |       |   |  |  |       |   |  |  | 253    |  
|Oleoductos del Valle S.A.    |  |      |  | $                         | 10   |  |            |  | 2,542,716  |            |  |  | 61         |  |  |  | 77     |   |  |  | 65     |   |  |  | 44     |  
|Refinería del Norte S.A.     |  |      |  | $                         | 1    |  |            |  | 26,108,083 |            |  |  | 63         |  |  |  | 210    |   |  |  | 246    |   |  |  | 192    |  
|Mixed Companies in Venezuela |  | (a)  |  |                           |     |  |            |  |           |            |  |  | 2,714      |  |  |  | 11,936 |   |  |  | 7,834  |   |  |  | 5,981  |  
|Other                        |  |      |  |                           |      |  |            |  |            |            |  |  |           |  |  |  | 1      |   |  |  | 1      |   |  |  | 1      |  
|Allowance for impairment     |  | (b)  |  |                           |      |  |            |  |            |            |  |  |           |  |  |  | (9,094 | ) |  |  | (5,167 | ) |  |  | (2,903 | )
|                             |  |      |  |                           |      |  |            |  |            |            |  |  |            |  |  |  |        |   |  |  |        |   |  |  |        |  
|                             |  |      |  |                           |      |  |            |  |            |            |  |  | 2,936      |  |  |  | 3,130  |   |  |  | 2,979  |   |  |  | 3,568  |  
|                             |  |      |  |                           |      |  |            |  |            |            |  |  |            |  |  |  |        |   |  |  |        |   |  |  |        |  



|                          |  |                                    |            |  |              |  |     |                        |  |  |        |   |  |                 |     |  |               |  |       |  |  |                   
|------------------------- |  | ---------------------------------- | ---------- |  | ------------ |  | --- | ---------------------- |  |  | ------ | - |  | --------------- | --- |  | ------------- |  | ----- |  |  | ------------------
|                          |  | Last available financial statement |            |  |             
|                          |  | Date                               |            |  | Capitalstock |  |     | Net incomefor the year |  |  | Equity |   |  | Percentageshare |     |  | Main business
|Oleoductos del Valle S.A. |  |                                    | 12/31/2015 |  |              |  | 110 |                        |  |  | 51     |   |  |                 | 347 |  |               |  | 23.10 |  |  | Oil Transportation
|Refinería del Norte S.A.  |  |                                    | 09/30/2015 |  |              |  | 92  |                        |  |  | (75    | ) |  |                 | 793 |  |               |  | 28.50 |  |  | Refining          



|(a) | Included Petrokariña S.A., Petroritupano S.A., Petroven-Bras S.A. and Petrowayú S.A
|--- | -----------------------------------------------------------------------------------

|(b) | The activity for the years ended December 31, 2015, 2014 and 2013, includes (2,714), (921) and (580) charged to Other comprehensive income and (1,213), (1,342) and (520), charged to
Share of profit of equity accounted investments, respectively (see note 17.3).
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

For purposes of
IFRSs 12 requirements, the Company does not have significant investments in associates.

Investments in Mixed Companies in
Venezuela

In April 2005, the MEP instructed PDVSA to review the thirty-two operating agreements signed by PDVSA
affiliates with oil companies from 1992 through 1997. These instructions given by the MEP established that all the necessary measures should be taken by PDVSA to migrate all operating agreements effective at that time to mixed companies. In August
2006, the conversion operating agreements were signed, providing for that the equity interest of private partners in such mixed companies would be of 40%, with the remaining 60% to be held by the Venezuelan Government.

The companies Petroritupano S.A., Petrowayú S.A., Petroven-Bras S.A. and Petrokariña S.A. (collectively referred
to as mixed companies) were organized as a result of migration of the operating agreements governing production activities in Venezuela in the Oritupano Leona, La Concepción, Acema and Mata areas, respectively.

The mixed companies have to sell to PDVSA all liquid hydrocarbons and the associated natural gas (when it is provided in the
agreement), produced in the delimited area, according to a price formula associated with international benchmarks such as BRENT.

As of December 31, 2015, 2014 and 2013 the carrying value of the Companys direct and indirect interest in the mixed
companies, net of impairment charges, is 2,842, 2,667 and 3,078, respectively. The recoverability of the referred investments is highly sensitive to crude oil price volatility, to economic, social and regulatory changes and, particularly, to the
resulting business plans to reserves development. In determining the recoverable value, the Company considered prices based on business plans (considering Brent crude oil price of USD 45 per barrel for 2016 converging to USD 71 in the
long-term), production curves, transaction costs at market values and investment needs to develop the reserves of such companies. The effect of international prices in the estimated curve of hydrocarbon future sales and the effect of the increase of
country risk in Venezuela in the discount rate used resulted in the recording of impairment losses of 1,213 in the year ended December 31, 2015. Discount rate used to measure recoverable value, (17.1% in 2015 and 15.47% in 2014), considers the
type of asset involved, the business segment and the country where operations are conducted. As of December 31, 2015, 2014 and 2013 the Company maintains allowances for impairment on this asset of 9,094, 5,167 and 2,903, respectively.



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The Company performed a sensitivity analysis of the recoverable value relating
to: i) discount rate: an increase or decrease of a 1% in discount rate, would imply a decrease of 5% or an increase of 6% in the recoverable value, respectively and ii) price of crude oil used: an increase or decrease of a 10% in the price, would
imply an increase of 17% and a decrease of 20%, in the recoverable value, respectively.

Upon the execution of the
pertinent agreements in connection with the migration of the operating agreements, in 2006, the Government of Venezuela recognized a divisible and transferable credit in favor of the private companies participating in the mixed companies in the
amount of USD 88.5 million for Petrobras Argentinas equity interest, which does not accrue interest and could be applied to the payment of acquisition bonds to be used in any new mixed ownership project for oil exploration and production
activities, or licenses for gas exploration and production operations in Venezuela. Since projects for the use of the credit recognized had not materialized, the efforts to transfer such credit to third parties had not been successful, and other
alternative uses of the credit was not anticipated, in 2007 the Company recorded an allowance for the full amount of the credit. As of December 31, 2015, 2014 and 2013 the Company maintains allowances for impairment on this asset of 1,153, 756
and 574, respectively (Note 15).

Impairment charge on investments in Oleoductos de Crudos Pesados (OCP)Ecuador

As regards the interpretation conflicts between OCP and the Ecuadorian Tax Authorities, the Court of Justice issued rulings
confirming the tax debt assessment in favor of the State, so OCP filed extraordinary actions for protection with the Constitutional Court. These actions were rejected by the Constitutional Court at the end of 2014.

OCP reports a deficit in its equity as of December 31, 2015 and 2014, however, considering that Petrobras Argentina has
not taken on any commitment to provide capital contributions or financial assistance to OCP, the shares have been valued at zero, with a net loss of 464 having been recognized in the fiscal year 2014, after giving effect to the capitalization of a
credit against OCP during 2014.

17.3. Share of net loss of equity accounted investments



|                             |  |      |  |      |        |   |      |  |        |      |  |  |      |  
|---------------------------- |  | ---- |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ---- | -
|                             |  | Note |  | 2015 |        |   | 2014 |  |        | 2013 | 
|Mixed Companies in Venezuela |  | (a)  |  |      | (1,223 | ) |      |  | (1,385 | )    |  |  | (357 | )
|Refinería del Norte S.A.     |  |      |  |      | (36    | ) |      |  | 97     |      |  |  | 44   |  
|CIESA                        |  |      |  |      | (50    | ) |      |  | (6     | )    |  |  | 10   |  
|OCP                          |  |      |  |      |       |   |      |  | (464   | )    |  |  | 19   |  
|Other                        |  |      |  |      | 19     |   |      |  | 23     |      |  |  | 5    |  
|                             |  |      |  |      |        |   |      |  |        |      |  |  |      |  
|                             |  |      |  |      | (1,290 | ) |      |  | (1,735 | )    |  |  | (279 | )
|                             |  |      |  |      |        |   |      |  |        |      |  |  |      |  



|(a) | Includes an impairment, in Oil and Gas Exploration and Production business segment, of 1,213, 1,342 and 520 for the years ended December 31, 2015, 2014 and 2013.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



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17.4. Dividends collected



|                         |  |      |   |  |      |  |    |      |  |  |    | 
|------------------------ |  | ---- | - |  | ---- |  | -- | ---- |  |  | -- | 
|                         |  | 2015 |   |  | 2014 |  |    | 2013 | 
|Refinería del Norte S.A. |  |      |  |  |      |  | 52 |      |  |  | 16 | 
|OCP                      |  |      |  |  |      |  |   |      |  |  | 4  | 
|Other                    |  |      | 6 |  |      |  | 3  |      |  |  | 3  | 
|                         |  |      |   |  |      |  |    |      |  |  |    | 
|                         |  |      | 6 |  |      |  | 55 |      |  |  | 23 | 
|                         |  |      |   |  |      |  |    |      |  |  |    | 

17.5. Information about interest in subsidiaries, associates, entities under joint control and other
entities as of December 31, 2015



|                                              |  |             |  |                          |        |  |          |  |        |                  |  |                                       
|--------------------------------------------- |  | ----------- |  | ------------------------ | ------ |  | -------- |  | ------ | ---------------- |  | --------------------------------------
|                                              |  |             |  | % of Ownership and Votes |        |  |         
|Subsidiaries                                  |  | Country     |  | Direct                   |        |  | Indirect |  |        | Business Segment
|Corod Producción S.A.                         |  | Venezuela   |  |                          | 100.00 |  |          |  |       |                  |  | Oil and Gas Exploration and Production
|EcuadorTLC S.A.                               |  | Ecuador     |  |                          | 100.00 |  |          |  |       |                  |  | Oil and Gas Exploration and Production
|Eg3 Red S.A.                                  |  | Argentina   |  |                          | 95.00  |  |          |  | 5.00   |                  |  | Refining and Distribution             
|Electricidade Com S.A.                        |  | Brasil      |  |                          |       |  |          |  | 100.00 |                  |  | Gas and Energy                        
|Enecor S.A.                                   |  | Argentina   |  |                          | 69.99  |  |          |  |       |                  |  | Gas and Energy                        
|Petrobras Bolivia Internacional S.A.          |  | Bolivia     |  |                          | 100.00 |  |          |  |       |                  |  | Corporate                             
|Petrobras Energía Colombia                    |  | Gran Cayman |  |                          |       |  |          |  | 100.00 |                  |  | Oil and Gas Exploration and Production
|Petrobras Energía de México S.A. de C.V.      |  | México      |  |                          |       |  |          |  | 100.00 |                  |  | Oil and Gas Exploration and Production
|Petrobras Energía Ecuador                     |  | Gran Cayman |  |                          |       |  |          |  | 100.00 |                  |  | Oil and Gas Exploration and Production
|Petrobras Energía Internacional S.A.          |  | Argentina   |  |                          | 95.00  |  |          |  | 5.00   |                  |  | Corporate                             
|Petrobras Energía Operaciones Ecuador S.A.    |  | Ecuador     |  |                          |       |  |          |  | 100.00 |                  |  | Oil and Gas Exploration and Production
|Petrobras Hispano Argentina S.A.              |  | España      |  |                          | 100.00 |  |          |  |       |                  |  | Corporate                             
|Petrolera San Carlos S.A.                     |  | Venezuela   |  |                          |       |  |          |  | 100.00 |                  |  | Oil and Gas Exploration and Production
|Transporte y Servicios de Gas en Uruguay S.A. |  | Uruguay     |  |                          | 51.00  |  |          |  | 12.50  |                  |  | Gas and Energy                        
|World Energy Business S.A.                    |  | Argentina   |  |                          |       |  |          |  | 100.00 |                  |  | Gas and Energy                        
|Petrolera Entre Lomas S.A.                    |  | Argentina   |  |                          | 58.88  |  |          |  |       |                  |  | Oil and Gas Exploration and Production
|                                              |  |             |  |                         
|Joint ventures                                |  |             |  |                          |        |  |          |  |        |                 
|Cía. de Inversiones de Energía S.A.           |  | Argentina   |  |                          | 25.00  |  |          |  | 25.00  |                  |  | Gas and Energy                        
|Transportadora de Gas del Sur S.A.            |  | Argentina   |  |                          |       |  |          |  | 25.50  |                  |  | Gas and Energy                        
|                                              |  |             |  |                         
|Associates                                    |  |             |  |                          |        |  |          |  |        |                 
|Coroil S.A.                                   |  | Venezuela   |  |                          | 20.00  |  |          |  | 29.00  |                  |  | Oil and Gas Exploration and Production
|Inversora Mata S.A.                           |  | Venezuela   |  |                          | 49.00  |  |          |  |       |                  |  | Oil and Gas Exploration and Production
|Oleoducto de Crudos Pesados Ltd.              |  | Gran Cayman |  |                          |       |  |          |  | 11.42  |                  |  | Oil and Gas Exploration and Production
|Oleoducto de Crudos Pesados S.A.              |  | Ecuador     |  |                          |       |  |          |  | 11.42  |                  |  | Oil and Gas Exploration and Production
|Oleoductos del Valle S.A.                     |  | Argentina   |  |                          | 23.10  |  |          |  |       |                  |  | Oil and Gas Exploration and Production
|Petrokariña S.A.                              |  | Venezuela   |  |                          | 29.20  |  |          |  | 5.29   |                  |  | Oil and Gas Exploration and Production
|Petroritupano S.A.                            |  | Venezuela   |  |                          | 22.00  |  |          |  |       |                  |  | Oil and Gas Exploration and Production
|Petroven-Bras S.A.                            |  | Venezuela   |  |                          | 29.20  |  |          |  | 5.29   |                  |  | Oil and Gas Exploration and Production
|Petrowayú S.A.                                |  | Venezuela   |  |                          | 36.00  |  |          |  |       |                  |  | Oil and Gas Exploration and Production
|Refinería del Norte S.A.                      |  | Argentina   |  |                          | 28.50  |  |          |  |       |                  |  | Refining and Distribution             
|Urugua-í S.A.                                 |  | Argentina   |  |                          | 29.33  |  |          |  |       |                  |  | Gas and Energy                        
|                                              |  |             |  |                         
|Other interest in affiliates                  |  |             |  |                          |        |  |          |  |        |                 
|Termoeléctrica José de San Martín S.A.        |  | Argentina   |  |                          | 8.84   |  |          |  |       |                  |  | Gas and Energy                        
|Termoeléctrica Manuel Belgrano S.A.           |  | Argentina   |  |                          | 8.84   |  |          |  |       |                  |  | Gas and Energy                        



F-53



---

##### Table of Contents

Changes in interest in related companies in fiscal years 2013 to 2015:

In the first quarter of 2013, the Company sold 100% of its interest in PEDASA, through which the Company held a 48.5% indirect
interest in Distrilec and a 27.33% indirect interest in Edesur.

In fiscal year 2014, liquidation of Propyme S.G.R, in
which the Company held a 48.56% direct and a 0.07% indirect interest, was approved.

In December 2014, the Company acquired
the 5% direct interest PEISA held in Atalaya Energy S.R.L. and Canadian Hunter Argentina S.A. Consequently, as from that date the Company held a 100% direct interest in both companies, later merged and absorbed into PESA.

17.6. Relevant information

The table below shows the most relevant information from the statements of income and cash flows of PELSA, the subsidiary with material
non-controlling interest.



|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  
|------------------------------------------------ |  | ------- | --------- |  | ---------------------------------- |  | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|Name                                             |  | Country |           |  | Proportion non-controllig interest | 
|                                                 |  | 2015    |           |  | 2014                               |  |        | 2013 | 
|Petrolera Entre Lomas S.A.                       |  |         | Argentina |  |                                    |  | 41     | %    |  |  | 41     | % |  |  | 41     | %
|                                                 |  |         |           | 
|Statement of profit or loss                      |  |         |           |  | 2015                               |  |        | 2014 |  |  | 2013   |  
|Sales                                            |  |         |           |  |                                    |  | 2,737  |      |  |  | 2,609  |   |  |  | 1,686  |  
|Cost of sales                                    |  |         |           |  |                                    |  | (1,901 | )    |  |  | (1,689 | ) |  |  | (1,044 | )
|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  
|Gross profit                                     |  |         |           |  |                                    |  | 836    |      |  |  | 920    |   |  |  | 642    |  
|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  
|Administrative and others expenses               |  |         |           |  |                                    |  | (157   | )    |  |  | (249   | ) |  |  | (179   | )
|Financial results                                |  |         |           |  |                                    |  | 39     |      |  |  | 16     |   |  |  | (7     | )
|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  
|Income before income tax                         |  |         |           |  |                                    |  | 718    |      |  |  | 687    |   |  |  | 456    |  
|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  
|Income tax                                       |  |         |           |  |                                    |  | (618   | )    |  |  | (395   | ) |  |  | (278   | )
|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  
|Net income                                       |  |         |           |  |                                    |  | 100    |      |  |  | 292    |   |  |  | 178    |  
|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  
|Attributable to non-controlling interests        |  |         |           |  |                                    |  | 42     |      |  |  | 120    |   |  |  | 73     |  
|Other comprehensive income                       |  |         |           |  |                                    |  | 1,987  |      |  |  | 572    |   |  |  | 416    |  
|Attributable to non-controlling interests        |  |         |           |  |                                    |  | 582    |      |  |  | 236    |   |  |  | 171    |  
|Dividends paid to non-controlling interests      |  |         |           |  |                                    |  | 26     |      |  |  | 61     |   |  |  | 16     |  
|                                                 |  |         |           | 
|Statement of financial position                  |  |         |           |  | 2015                               |  |        | 2014 |  |  | 2013   |  
|Current Assets                                   |  |         |           |  |                                    |  | 801    |      |  |  | 981    |   |  |  | 537    |  
|Non-current Assets                               |  |         |           |  |                                    |  | 4,639  |      |  |  | 2,784  |   |  |  | 1,953  |  
|Current Liabilities                              |  |         |           |  |                                    |  | 549    |      |  |  | 848    |   |  |  | 355    |  
|Non-current Liabilities                          |  |         |           |  |                                    |  | 943    |      |  |  | 422    |   |  |  | 354    |  
|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  
|Equity                                           |  |         |           |  |                                    |  | 3,948  |      |  |  | 2,495  |   |  |  | 1,781  |  
|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  
|Attributable to non-controlling interests        |  |         |           |  |                                    |  | 1,627  |      |  |  | 1,029  |   |  |  | 734    |  
|                                                 |  |         |           | 
|Cash flow                                        |  |         |           |  | 2015                               |  |        | 2014 |  |  | 2013   |  
|Net cash provided by operations                  |  |         |           |  |                                    |  | 473    |      |  |  | 1,186  |   |  |  | 657    |  
|Net cash used in investing activities            |  |         |           |  |                                    |  | (808   | )    |  |  | (756   | ) |  |  | (559   | )
|Net cash used in financing activities            |  |         |           |  |                                    |  | (93    | )    |  |  | (232   | ) |  |  | (145   | )
|Effect of exchange rate change                   |  |         |           |  |                                    |  | 46     |      |  |  | 61     |   |  |  | 58     |  
|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  
|Increase (decrease) in cash and cash equivalents |  |         |           |  |                                    |  | (382   | )    |  |  | 259    |   |  |  | 11     |  
|                                                 |  |         |           |  |                                    |  |        |      |  |  |        |   |  |  |        |  



F-54



---

##### Table of Contents

Associates and joint arrangements



|                                 |  |            |     |  |                   |  |      |            |  |  |                   |  |  |            |     |   |                   |  |       |  |  |  |    | 
|-------------------------------- |  | ---------- | --- |  | ----------------- |  | ---- | ---------- |  |  | ----------------- |  |  | ---------- | --- | - | ----------------- |  | ----- |  |  |  | -- | 
|                                 |  | 2015       |     |  | 2014              |  |      | 2013       | 
|                                 |  | Associates |     |  | JointArrangements |  |      | Associates |  |  | JointArrangements |  |  | Associates |     |   | JointArrangements | 
|Total other comprehensive income |  |            | 373 |  |                   |  | (100 | )          |  |  | 836               |  |  |            | (11 | ) |                   |  | 1,862 |  |  |  | 19 | 

18. Other investments



|                                               |  |      |      |  |      |  |     |           |  |  |           |   |  |           |      |   |  |  |     |  
|---------------------------------------------- |  | ---- | ---- |  | ---- |  | --- | --------- |  |  | --------- | - |  | --------- | ---- | - |  |  | --- | -
|                                               |  |      |      |  | 2015 |  |     | 2014      |  |  | 2013      |  
|                                               |  | Note |      |  | Cost |  |     | Bookvalue |  |  | Bookvalue |   |  | Bookvalue |     
|Current                                        |  |      |      |  |      |  |     |           |  |  |           |   |  |           |      |   |  |  |     |  
|Financial Trust for Works on Gasoducto Sur     |  |      |      |  |      |  |     |           |  |  |           |   |  |           |      |   |  |  |     |  
|(Fideicomiso Financiero de Obra Gasoducto Sur) |  |      | 31.2 |  |      |  | 19  |           |  |  | 19        |   |  |           | 20   |   |  |  | 20  |  
|Government securities                          |  |      |      |  |      |  | 14  |           |  |  | 14        |   |  |           | 8    |   |  |  |    |  
|Other                                          |  |      |      |  |      |  | 10  |           |  |  | 10        |   |  |           | 5    |   |  |  | 3   |  
|                                               |  |      |      |  |      |  |     |           |  |  |           |   |  |           |      |   |  |  |     |  
|                                               |  |      |      |  |      |  | 43  |           |  |  | 43        |   |  |           | 33   |   |  |  | 23  |  
|                                               |  |      |      |  |      |  |     |           |  |  |           |   |  |           |      |   |  |  |     |  
|Non Current                                    |  |      |      |  |      |  |     |           |  |  |           |   |  |           |      |   |  |  |     |  
|Loans to joint venture                         |  |      |      |  |      |  | 290 |           |  |  | 290       |   |  |           | 189  |   |  |  | 172 |  
|Related companies                              |  |      | 28   |  |      |  |    |           |  |  |          |   |  |           |     |   |  |  | 128 |  
|Financial Trust for Works on Gasoducto Sur     |  |      |      |  |      |  |     |           |  |  |           |   |  |           |      |   |  |  |     |  
|(Fideicomiso Financiero de Obra Gasoducto Sur) |  |      | 31.2 |  |      |  | 30  |           |  |  | 30        |   |  |           | 47   |   |  |  | 64  |  
|Allowance for impairment of investments        |  |      |      |  |      |  |    |           |  |  | (190      | ) |  |           | (103 | ) |  |  | (79 | )
|Government securities                          |  |      |      |  |      |  | 133 |           |  |  | 133       |   |  |           |     |   |  |  |    |  
|Other                                          |  |      |      |  |      |  |    |           |  |  | 27        |   |  |           | 20   |   |  |  | 16  |  
|                                               |  |      |      |  |      |  |     |           |  |  |           |   |  |           |      |   |  |  |     |  
|                                               |  |      |      |  |      |  | 453 |           |  |  | 290       |   |  |           | 153  |   |  |  | 301 |  
|                                               |  |      |      |  |      |  |     |           |  |  |           |   |  |           |      |   |  |  |     |  



F-55



---

##### Table of Contents

19. Property, plant and equipment

Changes in property, plant and equipment



|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|------------------------- |  | ---- | -- | - | --------------------------------------------------------- |  | ------ | ----------------------------- |  |  | ------------------------- | - |  | ---------------- | ----- | - | --------------- |  | ----- | ----- |  |  | ------ | - |  |  | ----- | - |  |  | ------ | -
|                          |  | Note |    |   | Productionwells,exploratorywells and oiland gasproperties |  |        | Machinery,tools andequipments |  |  | Electricygenerationplants |   |  | Industrialplants |       |   | Work inprogress |  |       | Other |  |  | Total  |  
|Cost                      |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|12/31/2012                |  |      |    |   |                                                           |  | 11,657 |                               |  |  | 4,366                     |   |  |                  | 1,165 |   |                 |  | 1,156 |       |  |  | 1,044  |   |  |  | 1,829 |   |  |  | 21,217 |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|Translation effect        |  |      |    |   |                                                           |  | 782    |                               |  |  | 10                        |   |  |                  |      |   |                 |  |      |       |  |  | 15     |   |  |  | 20    |   |  |  | 827    |  
|Additions                 |  |      |    |   |                                                           |  | 360    |                               |  |  | 4                         |   |  |                  |      |   |                 |  | 1     |       |  |  | 2,196  |   |  |  | 180   |   |  |  | 2,741  |  
|Decreases                 |  |      | (a | ) |                                                           |  | (121   | )                             |  |  | (11                       | ) |  |                  |      |   |                 |  |      |       |  |  | (2     | ) |  |  | (6    | ) |  |  | (140   | )
|Transfers                 |  |      |    |   |                                                           |  | 1,757  |                               |  |  | 87                        |   |  |                  | 19    |   |                 |  | 187   |       |  |  | (1,988 | ) |  |  | (62   | ) |  |  |       |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|12/31/2013                |  |      |    |   |                                                           |  | 14,435 |                               |  |  | 4,456                     |   |  |                  | 1,184 |   |                 |  | 1,344 |       |  |  | 1,265  |   |  |  | 1,961 |   |  |  | 24,645 |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|Translation effect        |  |      |    |   |                                                           |  | 1,095  |                               |  |  | 15                        |   |  |                  |      |   |                 |  |      |       |  |  | 38     |   |  |  | 31    |   |  |  | 1,179  |  
|Additions                 |  |      |    |   |                                                           |  | 1,117  |                               |  |  | 2                         |   |  |                  | 1     |   |                 |  |      |       |  |  | 3,316  |   |  |  | 219   |   |  |  | 4,655  |  
|Decreases                 |  |      | (b | ) |                                                           |  | (1,658 | )                             |  |  | (500                      | ) |  |                  | (4    | ) |                 |  | (2    | )     |  |  | (24    | ) |  |  | (29   | ) |  |  | (2,217 | )
|Transfers                 |  |      |    |   |                                                           |  | 2,338  |                               |  |  | 492                       |   |  |                  | 152   |   |                 |  | 222   |       |  |  | (3,106 | ) |  |  | (98   | ) |  |  |       |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|12/31/2014                |  |      |    |   |                                                           |  | 17,327 |                               |  |  | 4,465                     |   |  |                  | 1,333 |   |                 |  | 1,564 |       |  |  | 1,489  |   |  |  | 2,084 |   |  |  | 28,262 |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|Translation effect        |  |      |    |   |                                                           |  | 2,759  |                               |  |  | 20                        |   |  |                  |      |   |                 |  |      |       |  |  | 76     |   |  |  | 110   |   |  |  | 2,965  |  
|Additions                 |  |      |    |   |                                                           |  | 433    |                               |  |  | 51                        |   |  |                  | 2     |   |                 |  |      |       |  |  | 4,453  |   |  |  | 175   |   |  |  | 5,114  |  
|Decreases                 |  |      | (c | ) |                                                           |  | (3,956 | )                             |  |  | (1,089                    | ) |  |                  |      |   |                 |  |      |       |  |  | (56    | ) |  |  | (82   | ) |  |  | (5,183 | )
|Transfers                 |  |      |    |   |                                                           |  | 3,617  |                               |  |  | 451                       |   |  |                  | 156   |   |                 |  | 283   |       |  |  | (4,383 | ) |  |  | (124  | ) |  |  |       |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|12/31/2015                |  |      |    |   |                                                           |  | 20,180 |                               |  |  | 3,898                     |   |  |                  | 1,491 |   |                 |  | 1,847 |       |  |  | 1,579  |   |  |  | 2,163 |   |  |  | 31,158 |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|Depreciation              |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|12/31/2012                |  |      |    |   |                                                           |  | 6,983  |                               |  |  | 3,487                     |   |  |                  | 583   |   |                 |  | 487   |       |  |  |       |   |  |  | 1,197 |   |  |  | 12,737 |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|Translation effect        |  |      |    |   |                                                           |  | 195    |                               |  |  | 3                         |   |  |                  |      |   |                 |  |      |       |  |  |       |   |  |  | 6     |   |  |  | 204    |  
|Net decreases             |  |      | (a | ) |                                                           |  |       |                               |  |  | (10                       | ) |  |                  |      |   |                 |  |      |       |  |  |       |   |  |  | (4    | ) |  |  | (14    | )
|Depreciation              |  |      |    |   |                                                           |  | 1,656  |                               |  |  | 308                       |   |  |                  | 87    |   |                 |  | 72    |       |  |  |       |   |  |  | 71    |   |  |  | 2,194  |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|12/31/2013                |  |      |    |   |                                                           |  | 8,834  |                               |  |  | 3,788                     |   |  |                  | 670   |   |                 |  | 559   |       |  |  |       |   |  |  | 1,270 |   |  |  | 15,121 |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|Translation effect        |  |      |    |   |                                                           |  | 383    |                               |  |  | 6                         |   |  |                  |      |   |                 |  |      |       |  |  |       |   |  |  | 11    |   |  |  | 400    |  
|Net decreases             |  |      | (b | ) |                                                           |  | (999   | )                             |  |  | (452                      | ) |  |                  | (3    | ) |                 |  |      |       |  |  |       |   |  |  | (26   | ) |  |  | (1,480 | )
|Depreciation              |  |      |    |   |                                                           |  | 2,043  |                               |  |  | 337                       |   |  |                  | 90    |   |                 |  | 80    |       |  |  |       |   |  |  | 82    |   |  |  | 2,632  |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|12/31/2014                |  |      |    |   |                                                           |  | 10,261 |                               |  |  | 3,679                     |   |  |                  | 757   |   |                 |  | 639   |       |  |  |       |   |  |  | 1,337 |   |  |  | 16,673 |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|Translation effect        |  |      |    |   |                                                           |  | 1,226  |                               |  |  | 16                        |   |  |                  |      |   |                 |  |      |       |  |  |       |   |  |  | 29    |   |  |  | 1,271  |  
|Net decreases             |  |      | (c | ) |                                                           |  | (2,582 | )                             |  |  | (969                      | ) |  |                  |      |   |                 |  |      |       |  |  |       |   |  |  | (39   | ) |  |  | (3,590 | )
|Depreciation              |  |      |    |   |                                                           |  | 2,093  |                               |  |  | 246                       |   |  |                  | 110   |   |                 |  | 97    |       |  |  |       |   |  |  | 84    |   |  |  | 2,630  |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|12/31/2015                |  |      |    |   |                                                           |  | 10,998 |                               |  |  | 2,972                     |   |  |                  | 867   |   |                 |  | 736   |       |  |  |       |   |  |  | 1,411 |   |  |  | 16,984 |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|Net book value 12/31/2015 |  |      |    |   |                                                           |  | 9,182  |                               |  |  | 926                       |   |  |                  | 624   |   |                 |  | 1,111 |       |  |  | 1,579  |   |  |  | 752   |   |  |  | 14,174 |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|Net book value 12/31/2014 |  |      |    |   |                                                           |  | 7,066  |                               |  |  | 786                       |   |  |                  | 576   |   |                 |  | 925   |       |  |  | 1,489  |   |  |  | 747   |   |  |  | 11,589 |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  
|Net book value 12/31/2013 |  |      |    |   |                                                           |  | 5,601  |                               |  |  | 668                       |   |  |                  | 514   |   |                 |  | 785   |       |  |  | 1,265  |   |  |  | 691   |   |  |  | 9,524  |  
|                          |  |      |    |   |                                                           |  |        |                               |  |  |                           |   |  |                  |       |   |                 |  |       |       |  |  |        |   |  |  |       |   |  |  |        |  



|(a) | Decreases on the category for the year ending production wells, exploratory wells and oil and gas property on December 31, 2013 includes 11 impairment Santa Cruz area II, charged in Other
operating expenses, net (Note 9).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Decreases on the category for the year ending production wells, exploratory wells and oil and gas property on December 31, 2014 includes 94 impairment Colpa Caranda area, charged in Other
operating expenses, net (Note 9).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Decreases on the category for the year ending production wells, exploratory wells and oil and gas property on December 31, 2015 includes 635 impairment charges, corresponding 471 and 164 to El Tordillo
and Colpa Caranda areas, respectively, charged in Other operating expenses, net (Note 9).
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Impairment of non-financial assets

The assessment of recoverability of El Tordillo and La Tapera  Puesto Quiroga areas resulted in the recognition of
impairment losses of 471 as a result of the significant drop in margins related to increases in operating costs and lower domestic reference prices for oil sales (considering crude oil domestic price of USD 55 per barrel for 2016 converging to
USD 69 in the long-term). The discount rate WACC amounted to 8.9% in 2015.

Furthermore, impairment losses of 164 were
recognized in Colpa and Caranda area, reflecting the effect of international reference prices in the curve of future oil sales (considering Brent crude oil price of USD 45 per barrel for 2015 converging to USD 71 in the long-term) and deferment
of development plan execution. The discount rate WACC amounted to 8.7% in 2015 and 8.3% in 2014.

The Company performed a
sensitivity analysis of the recoverable value in El Tordillo and La Tapera  Puesto Quiroga areas regarding: i) discount rate: an increase or decrease of 1% in the discount rate would imply a decrease of 5% or 6% increase in the recoverable
value, respectively and ii) price of crude oil used: an increase or decrease of 10% in the price would imply an increase of 20% and a 20% decrease in the recoverable value, respectively.

The Company performed a sensitivity analysis of the recoverable value in Colpa and Caranda area regarding: i) discount rate: an
increase or decrease of 1% in the discount rate would imply a reduction of 33% or an increase of 36% in the recoverable value, respectively and ii) price of crude oil used: an increase or decrease of 10% in the price would imply an increase of 15%
and a 18% decrease in the recoverable value, respectively. Considering the related net book value of 211, the mentioned effects, would not represent a significant impact in relation to the Companys assets.

20. Financial loans

20.1. Global
programs of non-convertible bonds

Global program of USD 2.5 million:

As of December 31, 2015 the following classes of bonds issued in May 2007, under this program remained outstanding: Class
S, for a face value of USD 300 million, maturing in May 2017, at a 5.875% annual rate. Class S bonds are collateralized by a Standby Purchase Agreement provided by Petróleo Brasileiro, pursuant to which, in the event of failure to pay
principal, interest and any other amount owed by Petrobras Argentina in connection with Class S bonds, Petróleo Brasileiro shall purchase the rights of bondholders to receive payments.

The proceeds from the bonds were used to refinance liabilities, increase working capital, and make capital expenditures in
Argentina and capital contributions to associates.

Bond debt is presented net of the unaccrued portion of the issuance
discounts and the incurred costs for such issuances.

Global program of USD 500 million:

The Extraordinary Shareholders of Petrobras Argentina held on March 21, 2013 approved the creation of a global program for
the issuance of bonds for an outstanding maximum principal amounting to USD 500 million or its equivalent in any other currency, expiring within 5 years, or the maximum term that may be established by any applicable regulation in the future.

The creation of the program was authorized by Resolution No. 17,162 of the CNV of 15 Augusts 2013. No notes were
issued as of the date of these financial statements.

20.2. Cross default clauses and others

Companys outstanding bonds and other financial indebtedness include cross default provisions whereby the Trustee, as
instructed by the bondholders representing at least 25% of the related outstanding capital, in the case of corporate bonds or the lender, as the case may be, may declare all the amounts owed to be due and payable if payment of any financial debt of
the Company or their significant subsidiaries is accelerated or is not made when due, provided that those amounts exceed the higher of USD25 million or 1% of Petrobras Argentinas shareholders equity upon those maturities, and that the
default has not been defeated or cured within the applicable legal and / or contractual terms.



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Companys outstanding bonds and financial indebtedness include additional
provisions whereby in case of unfulfilled and as long as the default was not defeated or cured within the applicable legal and/or contractual terms, might also cause an acceleration of the debt.

As of the date of these financial statements, Petrobras Argentina has complied with all terms and conditions related to its
financial indebtedness.

Under the documentation governing the Series S Notes, if a change of control (as defined
therein) occurs, we must make an offer to repurchase from the holders any and all outstanding Series S Notes at a purchase price equal to 101% of the aggregate principal amount of such notes outstanding, plus any accrued and unpaid interest
thereon, through the purchase date.

20.3. Composition

The breakdown of the financial debt as of December 31, 2015, 2014 and 2013, is as follows:



|                       |  |         |    |  |             |  |       |         |  |  |             |  |  |         |       |  |             |  |     |  |  |  |       | 
|---------------------- |  | ------- | -- |  | ----------- |  | ----- | ------- |  |  | ----------- |  |  | ------- | ----- |  | ----------- |  | --- |  |  |  | ----- | 
|                       |  | 2015    |    |  | 2014        |  |       | 2013    | 
|                       |  | Current |    |  | Non current |  |       | Current |  |  | Non current |  |  | Current |       |  | Non current | 
|Financial institutions |  |         | 32 |  |             |  |      |         |  |  | 73          |  |  |         | 25    |  |             |  | 193 |  |  |  | 81    | 
|Bonds                  |  |         | 29 |  |             |  | 3,910 |         |  |  | 19          |  |  |         | 2,562 |  |             |  | 15  |  |  |  | 1,943 | 
|                       |  |         |    |  |             |  |       |         |  |  |             |  |  |         |       |  |             |  |     |  |  |  |       | 
|                       |  |         | 61 |  |             |  | 3,910 |         |  |  | 92          |  |  |         | 2,587 |  |             |  | 208 |  |  |  | 2,024 | 
|                       |  |         |    |  |             |  |       |         |  |  |             |  |  |         |       |  |             |  |     |  |  |  |       | 

Loans activity

Activity in loans and financing during 2015, 2014 and 2013 are as follows:



|                                 |  |      |       |   |      |  |       |      |  |  |        |  
|-------------------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ------ | -
|                                 |  | 2015 |       |   | 2014 |  |       | 2013 | 
|Beginning balance                |  |      | 2,679 |   |      |  | 2,232 |      |  |  | 2,666  |  
|Net decrease in short term loans |  |      | (24   | ) |      |  | (124  | )    |  |  | 96     |  
|Accrued interest                 |  |      | 213   |   |      |  | 192   |      |  |  | 212    |  
|Effect of exchange rate change   |  |      | 1,347 |   |      |  | 671   |      |  |  | 727    |  
|Interest paid                    |  |      | (198  | ) |      |  | (181  | )    |  |  | (216   | )
|Increase in long term loans      |  |      |      |   |      |  |      |      |  |  | 49     |  
|Long-term loans paid             |  |      | (46   | ) |      |  | (111  | )    |  |  | (1,302 | )
|                                 |  |      |       |   |      |  |       |      |  |  |        |  
|Ending balance                   |  |      | 3,971 |   |      |  | 2,679 |      |  |  | 2,232  |  
|                                 |  |      |       |   |      |  |       |      |  |  |        |  



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Short and Long-term loans

The financial loans outstanding as of December 31, 2015, 2014 and 2013 are as follows:



|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|----------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | -------- |  | -------------------- | --- |  | -------------
|Type                    |  | 2015 |       |  | 2014 |  |       | 2013 |  |  | Currency |  | Annual interest rate
|Current Liabilities     |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|Financial institutions  |  |      |      |  |      |  | 29    |      |  |  |         |  |                      | USD |  | Libo + 3,55% 
|                        |  |      |      |  |      |  |      |      |  |  | 42       |  |                      | USD |  | Libo + 2,90% 
|                        |  |      |      |  |      |  |      |      |  |  | 98       |  |                      | USD |  | Libo + 1,95% 
|                        |  |      |      |  |      |  | 15    |      |  |  | 23       |  |                      | USD |  | Libo + 1,445%
|                        |  |      |      |  |      |  |      |      |  |  | 21       |  |                      | USD |  | Libo + 2,955%
|                        |  |      | 25    |  |      |  | 25    |      |  |  | 6        |  |                      | USD |  | 15.25%       
|                        |  |      | 7     |  |      |  | 4     |      |  |  | 3        |  |                      | USD |  | Libo + 3,5%  
|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|                        |  |      | 32    |  |      |  | 73    |      |  |  | 193      |  |                      |     |  |              
|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|Bonds - Class S         |  |      | 29    |  |      |  | 19    |      |  |  | 15       |  |                      | USD |  | 5,875%       
|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|                        |  |      | 29    |  |      |  | 19    |      |  |  | 15       |  |                      |     |  |              
|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|                        |  |      | 61    |  |      |  | 92    |      |  |  | 208      |  |                      |     |  |              
|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|Non Current Liabilities |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|Financial institutions  |  |      |      |  |      |  | 25    |      |  |  | 48       |  |                      | ARS |  | 15.25%       
|                        |  |      |      |  |      |  |      |      |  |  | 12       |  |                      | USD |  | Libo + 1,445%
|                        |  |      |      |  |      |  |      |      |  |  | 21       |  |                      | USD |  | Libo + 3,55% 
|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|                        |  |      |      |  |      |  | 25    |      |  |  | 81       |  |                      |     |  |              
|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|Bonds - Class S         |  |      | 3,910 |  |      |  | 2,562 |      |  |  | 1,943    |  |                      | USD |  | 5,875%       
|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|                        |  |      | 3,910 |  |      |  | 2,562 |      |  |  | 1,943    |  |                      |     |  |              
|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              
|                        |  |      | 3,910 |  |      |  | 2,587 |      |  |  | 2,024    |  |                      |     |  |              
|                        |  |      |       |  |      |  |       |      |  |  |          |  |                      |     |  |              

The maturities of the long-term financial loans as of December 31, 2015, 2014 and 2013,
are as follows:



|                  |  |      |       |  |      |  |       |      |  |  |       | 
|----------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                  |  | 2015 |       |  | 2014 |  |       | 2013 | 
|Less than 1 year  |  |      | 61    |  |      |  | 92    |      |  |  | 208   | 
|From 1 to 2 years |  |      | 3,910 |  |      |  | 24    |      |  |  | 55    | 
|From 2 to 3 years |  |      |      |  |      |  | 2,563 |      |  |  | 26    | 
|Over 3 years      |  |      |      |  |      |  |      |      |  |  | 1,943 | 
|                  |  |      |       |  |      |  |       |      |  |  |       | 
|                  |  |      | 3,971 |  |      |  | 2,679 |      |  |  | 2,232 | 
|                  |  |      |       |  |      |  |       |      |  |  |       | 

21. Current Taxes payables



|             |  |      |     |  |      |  |       |      |  |  |     | 
|------------ |  | ---- | --- |  | ---- |  | ----- | ---- |  |  | --- | 
|             |  | 2015 |     |  | 2014 |  |       | 2013 | 
|Value Added  |  |      | 295 |  |      |  | 296   |      |  |  | 232 | 
|Gross Income |  |      | 60  |  |      |  | 43    |      |  |  | 27  | 
|Income Tax   |  |      | 105 |  |      |  | 485   |      |  |  | 86  | 
|Royalties    |  |      | 227 |  |      |  | 167   |      |  |  | 136 | 
|Others       |  |      | 88  |  |      |  | 143   |      |  |  | 97  | 
|             |  |      |     |  |      |  |       |      |  |  |     | 
|             |  |      | 775 |  |      |  | 1,134 |      |  |  | 578 | 
|             |  |      |     |  |      |  |       |      |  |  |     | 



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##### Table of Contents

22. Provisions and contingent liabilities

Provisions that have been recognized in financial statements



|                                       |  |       |  |         |       |  |         |  |       |         |  |  |         |  |  |         |       |  |         |  |     |  |  |  |       | 
|-------------------------------------- |  | ----- |  | ------- | ----- |  | ------- |  | ----- | ------- |  |  | ------- |  |  | ------- | ----- |  | ------- |  | --- |  |  |  | ----- | 
|                                       |  |       |  | 2015    |       |  | 2014    |  |       | 2013    | 
|                                       |  |       |  |         |       |  | Non     |  |       |         |  |  | Non     |  |  |         |       |  | Non     | 
|                                       |  | Notes |  | Current |       |  | current |  |       | Current |  |  | current |  |  | Current |       |  | current | 
|Related companies                      |  | 28    |  |         | 601   |  |         |  | 88    |         |  |  | 187     |  |  |         | 299   |  |         |  | 115 |  |  |  | 288   | 
|Renegotiation commitments oil areas    |  | 29.6  |  |         |      |  |         |  |      |         |  |  | 670     |  |  |         |      |  |         |  |    |  |  |  |      | 
|Contracts renegotiation                |  | 30    |  |         | 626   |  |         |  |      |         |  |  |        |  |  |         |      |  |         |  |    |  |  |  |      | 
|Provision for enviromental remediation |  | (a)   |  |         | 174   |  |         |  | 164   |         |  |  | 191     |  |  |         | 152   |  |         |  | 112 |  |  |  | 43    | 
|Asset retirement obligation            |  | (b)   |  |         | 112   |  |         |  | 1,377 |         |  |  | 45      |  |  |         | 1,396 |  |         |  | 12  |  |  |  | 1,401 | 
|Provision for legal proceedings        |  | (c)   |  |         | 3     |  |         |  | 265   |         |  |  | 1       |  |  |         | 320   |  |         |  | 1   |  |  |  | 318   | 
|Joint operations partners              |  |       |  |         |      |  |         |  |      |         |  |  | 27      |  |  |         |      |  |         |  | 43  |  |  |  |      | 
|Other liabilities                      |  |       |  |         | 139   |  |         |  | 272   |         |  |  | 132     |  |  |         | 227   |  |         |  | 102 |  |  |  | 174   | 
|                                       |  |       |  |         |       |  |         |  |       |         |  |  |         |  |  |         |       |  |         |  |     |  |  |  |       | 
|                                       |  |       |  |         | 1,655 |  |         |  | 2,166 |         |  |  | 1,253   |  |  |         | 2,394 |  |         |  | 385 |  |  |  | 2,224 | 
|                                       |  |       |  |         |       |  |         |  |       |         |  |  |         |  |  |         |       |  |         |  |     |  |  |  |       | 



|a) | Provision for Environmental remediation
|-- | ---------------------------------------

The Company is subject to extensive
environmental regulations in Argentina and in the other countries in which it operates. 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 has not incurred in any material environmental liabilities as a result of its operations. 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 Petrobras Argentinas business.

Activity in 2015, 2014 and 2013 fiscal years includes (169), (54) and (273) attributable to payments net of new
charges, 29, 193 and 27 recognized in Other operating expenses, net (Note 9) and 134, 49 and 98 recognized in Other Comprehensive Income, respectively.

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.



|b) | Asset retirement obligations
|-- | ----------------------------

In accordance with the regulations applicable in
the countries where the Company (directly or indirectly through subsidiaries) performs oil and gas exploration and production activities, the Company must incur costs associated with well plugging and abandonment. The Company has not pledged any
assets for the purpose of settling such obligations.

The following table summarizes the activity in asset retirement
obligations for the years ended December 31, 2015, 2014 and 2013:



|                                     |  |      |       |   |      |  |       |      |  |  |       |  
|------------------------------------ |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                     |  | 2015 |       |   | 2014 |  |       | 2013 | 
|Beginning balance                    |  |      | 1,441 |   |      |  | 1,413 |      |  |  | 1,016 |  
|Accretion                            |  |      | 86    |   |      |  | 147   |      |  |  | 46    |  
|Additions                            |  |      |      |   |      |  |      |      |  |  | 61    |  
|Estimated cash flow changes          |  |      | 87    |   |      |  | 311   |      |  |  | 377   |  
|Decreases                            |  |      | (628  | ) |      |  | (546  | )    |  |  | (124  | )
|Foreign currency translation / other |  |      | 50    |   |      |  | 116   |      |  |  | 37    |  
|                                     |  |      |       |   |      |  |       |      |  |  |       |  
|Ending balance                       |  |      | 1,489 |   |      |  | 1,441 |      |  |  | 1,413 |  
|                                     |  |      |       |   |      |  |       |      |  |  |       |  



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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.



|c) | Provision for legal proceedings
|-- | -------------------------------

The Company (directly or indirectly through
subsidiaries) is a party to several commercial, tax 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.

Activity in 2015, 2014 and 2013 fiscal years includes 9, 109 and 103 recognized in
Other operating income expenses, net (Note 9) and (103), (126) and (58) attributable to disbursements for each year, respectively.

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.

Contingent liabilities that have not been recognized in financial statements

Material contingent liabilities considered as possible in the opinion of the Company and its legal and tax advisors, that have
not been recognized in financial statements are as follows:

Tax Contingencies

Income tax

There are
interpretation differences between the Company and the Argentine tax authorities in the criterion applied by the Company regarding the time of recording well abandonment expenses for income tax purposes. As of the date of these financial statements,
the Tax Court has issued an unfavorable judgment against the Company for 2004, 2005 and 2006 periods which did not provide for payment of any tax because of the allocation of tax losses, that have not been used or challenged, against these periods.
The Management is analyzing the administrative and judicial steps that should be followed. It should also be noted that the interpretation differences are maintained by subsequent fiscal years, but these is not a final administrative or judicial
decision. The Company believes that the resolution of these matters will not have a material adverse effect on the financial position of the Company.

Gross Income tax

The Company
maintains interpretative differences with the AFIP and Argentinian provincial tax authorities related to taxes applicable to its oil and gas activity. The Company estimates that the outcome of these differences will not have significant adverse
effects on the Companys financial position or results of operations.

Arbitration Oil Combustibles SA (OIL)

In December 2010, OIL and PESA have signed a contract committing itself to selling virgin naphtha and octanicas basis for a
period of 15 years to PESA, called Supply Framework Agreement.

In April 2015, the firm OIL initiated
arbitration before the International Chamber of Commerce (ICC) against PESA, considering that by extraordinary and unforeseeable reasons the aforementioned Agreement became too onerous for Oil.

The management of the Company believes that in the state in which the arbitration is, it does not appear as likely that the
outcome of this matter may have a significant adverse effect on the financial position or results of operations of the Company. On March 30, 2016, Oil Combustibles S.A. filed for reorganization proceedings with the Comodoro Rivadavia courts.



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23. Social benefits and other payroll benefits



|                              |  |      |      |  |         |  |   |             |  |  |         |  |  |             |   |  |         |  |     |             |  |  |   |  |  |  |     | 
|----------------------------- |  | ---- | ---- |  | ------- |  | - | ----------- |  |  | ------- |  |  | ----------- | - |  | ------- |  | --- | ----------- |  |  | - |  |  |  | --- | 
|                              |  |      |      |  | 2015    |  |   | 2014        |  |  | 2013    | 
|                              |  | Note |      |  | Current |  |   | Non Current |  |  | Current |  |  | Non Current |   |  | Current |  |     | Non Current | 
|Defined contribution plan (a) |  |      | 23.1 |  |         |  | 6 |             |  |  |        |  |  |             | 5 |  |         |  |    |             |  |  | 4 |  |  |  |    | 
|Defined benefit plan          |  |      | 23.2 |  |         |  |  |             |  |  | 372     |  |  |             |  |  |         |  | 308 |             |  |  |  |  |  |  | 235 | 
|Other employment benefits     |  |      | 23.3 |  |         |  |  |             |  |  | 162     |  |  |             |  |  |         |  | 130 |             |  |  |  |  |  |  | 101 | 
|                              |  |      |      |  |         |  |   |             |  |  |         |  |  |             |   |  |         |  |     |             |  |  |   |  |  |  |     | 
|                              |  |      |      |  |         |  | 6 |             |  |  | 534     |  |  |             | 5 |  |         |  | 438 |             |  |  | 4 |  |  |  | 336 | 
|                              |  |      |      |  |         |  |   |             |  |  |         |  |  |             |   |  |         |  |     |             |  |  |   |  |  |  |     | 



|(a) | Included in line Other Liabilities on Current Provisions.
|--- | -------------------------------------------------------------

23.1.
Defined contribution plan

Supplementary Pension Plan

In November 2005, Petrobras Argentinas Board of Directors approved the implementation of a defined voluntary contribution
plan for the employees who fulfill certain conditions. Through this plan, Petrobras Argentina makes contributions to a trust fund in an equal amount to the contributions made by the employees adhered to the plan, in conformity with a scheme defined
for each salary level. The participating employees may make voluntary contributions exceeding those established in the mentioned scheme, which will not be considered for purposes of the contributions to be made by Petrobras Argentina.

In the years ended December 31, 2015, 2014 and 2013, Petrobras Argentina expensed of 25, 21 and 17, respectively,
attributable to such benefit.

23.2. Defined benefit plan

Indemnity plan

This is a defined benefit plan for employees who fulfill certain conditions, and consists of granting, upon retirement, a
one-month salary per year of service at the Company, with a minimum of six salaries, in conformity with a decreasing scale considering the years that the plan is in effect.

Compensatory fund

This is a defined benefit plan for employees of Petrobras Argentina who take part in the defined contribution plan effective at
the time that joined the Company prior to May 31, 1995, and have reached a certain number of years of service. The benefit is based on the last computable salary and years of service of each employee included in the plan.

The plan is of a supplemental nature, so that the benefit received by the employee is represented by the amount determined
under the provisions of this plan, after deducting benefits payable to the employee under the Supplementary Pension Plan and the public retirement system, in order to the aggregate benefit to each employee equals the one stipulated in this plan.

The plan calls for a contribution to a fund exclusively by Petrobras Argentina and without any contribution by the
employees. The assets of the fund are contributed to a trust fund and invested in US dollar-denominated money market instruments in order to preserve the accumulated capital and obtain a return in line with a moderate risk profile. In addition,
although there is no target asset allocation for the following years, funds are mainly invested in US government bonds, commercial papers rated A1 or P1, AAAm-rated mutual funds and time deposits in banks rated A+ or higher in the United States of
America, in accordance with the Trust Agreement dated on March 27, 2002 entered with The Bank of New York Mellon, duly amended by the Permitted Investment Letter dated on September 14, 2006. The Bank of New York Mellon is the trustee and
Towers Watson is the managing agent. In case there is an excess (duly certified by an independent actuary) of the funds to be used to settle the benefits granted by the plan, Petrobras Argentina will be entitled to choice to use it, in which case it
may have to notify the trustee thereof.



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During 2015, 2014 and 2013 the most relevant actuarial information on the
defined-benefits pension plans are as follows:



|                                               |  |                        |     |   |                     |  |     |                        |  |  |                     |   |  |                        |     |   |                     |  |     |   |  |  |     |  
|---------------------------------------------- |  | ---------------------- | --- | - | ------------------- |  | --- | ---------------------- |  |  | ------------------- | - |  | ---------------------- | --- | - | ------------------- |  | --- | - |  |  | --- | -
|                                               |  | 2015                   |     |   | 2014                |  |     | 2013                   | 
|                                               |  | Fair valueofobligation |     |   | Fair valueof assets |  |     | Fair valueofobligation |  |  | Fair valueof assets |   |  | Fair valueofobligation |     |   | Fair valueof assets | 
|At the beginning of the year                   |  |                        | 392 |   |                     |  | 84  |                        |  |  | 298                 |   |  |                        | 63  |   |                     |  | 259 |   |  |  | 49  |  
|Items classified in profit or loss             |  |                        |     |   |                     |  |     |                        |  |  |                     |   |  |                        |     |   |                     |  |     |   |  |  |     |  
|Service cost                                   |  |                        | 13  |   |                     |  |    |                        |  |  | 10                  |   |  |                        |    |   |                     |  | 7   |   |  |  |    |  
|Net Interest cost                              |  |                        | 134 |   |                     |  | 18  |                        |  |  | 74                  |   |  |                        | 9   |   |                     |  | 78  |   |  |  | 15  |  
|Plan Amendment                                 |  |                        |    |   |                     |  |    |                        |  |  |                    |   |  |                        |    |   |                     |  | 6   |   |  |  |    |  
|Items classified in other comprehensive income |  |                        |     |   |                     |  |     |                        |  |  |                     |   |  |                        |     |   |                     |  |     |   |  |  |     |  
|Actuarial gains from experiencie adjustments   |  |                        | (45 | ) |                     |  | 1   |                        |  |  | 9                   |   |  |                        |    |   |                     |  | (38 | ) |  |  |    |  
|Benefits paid                                  |  |                        | (34 | ) |                     |  | (15 | )                      |  |  | (18                 | ) |  |                        | (14 | ) |                     |  | (14 | ) |  |  | (11 | )
|Contributions paid                             |  |                        |    |   |                     |  | 15  |                        |  |  |                    |   |  |                        | 14  |   |                     |  |    |   |  |  | 10  |  
|Others                                         |  |                        | 40  |   |                     |  | 25  |                        |  |  | 19                  |   |  |                        | 12  |   |                     |  |    |   |  |  |    |  
|                                               |  |                        |     |   |                     |  |     |                        |  |  |                     |   |  |                        |     |   |                     |  |     |   |  |  |     |  
|At the end of the year (a)                     |  |                        | 500 |   |                     |  | 128 |                        |  |  | 392                 |   |  |                        | 84  |   |                     |  | 298 |   |  |  | 63  |  
|                                               |  |                        |     |   |                     |  |     |                        |  |  |                     |   |  |                        |     |   |                     |  |     |   |  |  |     |  
|Net liability at the end of the year           |  |                        |     |   |                     |  | 372 |                        |  |  |                     |   |  |                        | 308 |   |                     |  |     |   |  |  | 235 |  
|                                               |  |                        |     |   |                     |  |     |                        |  |  |                     |   |  |                        |     |   |                     |  |     |   |  |  |     |  



|(a) | As of December 31, 2015, 2014 and 2013 the defined benefit obligation includes 254, 221 and 172 corresponding to the Compensatory Fund and 118, 87 and 63 for the Indemnity Plan, respectively.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Principal assumptions and sensitivity analysis



|                        |  |      |                                      |   |        |  |   |          |  |  |          |    |  |  |       |   
|----------------------- |  | ---- | ------------------------------------ | - | ------ |  | - | -------- |  |  | -------- | -- |  |  | ----- | --
|                        |  |      | Impact on defined benefit obligation |  
|                        |  | Used |                                      |   | Change |  |   | Increase |  |  | Decrease |   
|Discount rate           |  |      | 4                                    | % |        |  | 1 | %        |  |  | (8,88    | %) |  |  | 10.39 | % 
|Future salary increases |  |      | 2                                    | % |        |  | 1 | %        |  |  | 9.36     | %  |  |  | (7,65 | %)

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.

Benefit obligation are expected to be paid as follows:



|          |  |  |     | 
|--------- |  |  | --- | 
|2017      |  |  | 51  | 
|2018      |  |  | 37  | 
|2019      |  |  | 30  | 
|2020      |  |  | 33  | 
|2021-2025 |  |  | 205 | 



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23.3. Other employment benefit obligations

Company employees falling within the scope of certain collective bargaining agreements and meeting the relevant requirements
are eligible to receive a certain number of salary pays, when they leave the Company upon retirement or disability.

During 2015, 2014 and 2013 the most relevant actuarial information on the defined-benefits as follows:



|                                                |  |      |     |   |      |  |     |      |  |  |     |  
|----------------------------------------------- |  | ---- | --- | - | ---- |  | --- | ---- |  |  | --- | -
|                                                |  | 2015 |     |   | 2014 |  |     | 2013 | 
|Benefit obligation at the beginning of the year |  |      | 130 |   |      |  | 101 |      |  |  | 59  |  
|Items classified in profit or loss              |  |      |     |   |      |  |     |      |  |  |     |  
|Service cost                                    |  |      | 11  |   |      |  | 8   |      |  |  | 5   |  
|Net Interest cost                               |  |      | 54  |   |      |  | 37  |      |  |  | 17  |  
|Items classified en other comprehensive income  |  |      |     |   |      |  |     |      |  |  |     |  
|Actuarial gains from experiencie adjustments    |  |      | (22 | ) |      |  | (11 | )    |  |  | 22  |  
|Benefits paid                                   |  |      | (11 | ) |      |  | (5  | )    |  |  | (2  | )
|                                                |  |      |     |   |      |  |     |      |  |  |     |  
|Benefit obligation at the end of the year       |  |      | 162 |   |      |  | 130 |      |  |  | 101 |  
|                                                |  |      |     |   |      |  |     |      |  |  |     |  

Principal assumptions and sensitivity analysis



|                        |  |      |   |   |                                      |  |   |          |  |  |          |    |  |  |       |   
|----------------------- |  | ---- | - | - | ------------------------------------ |  | - | -------- |  |  | -------- | -- |  |  | ----- | --
|                        |  |      |   |   | Impact on defined benefit obligation | 
|                        |  | Used |   |   | Change                               |  |   | Increase |  |  | Decrease |   
|Discount rate           |  |      | 4 | % |                                      |  | 1 | %        |  |  | (3.47    | %) |  |  | 9.53  | % 
|Future salary increases |  |      | 2 | % |                                      |  | 1 | %        |  |  | 9.78     | %  |  |  | (4.01 | %)

The sensitivity analysis is 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.

Benefit obligation are expected to be paid as follows:



|          |  |  |    | 
|--------- |  |  | -- | 
|2017      |  |  | 18 | 
|2018      |  |  | 12 | 
|2019      |  |  | 10 | 
|2020      |  |  | 13 | 
|2021-2025 |  |  | 76 | 

23.4. Pension plan financing  Optimum Petrobras Trust Fund

The Company, in its capacity as trustor, entered into a trust agreement with BNP Paribas Argentina Investment Partners S.A., in
its capacity as trustee, which trust assets consist of shares of the Company (Note 2.6.8). As of December 31, 2015 which number 5,811,866 share of the Company.

The sole purpose of the trust is to make periodical contributions of shares and/or cash resulting from the sale of the shares
in order for the Company to comply with the funding obligations under the Compensatory Fund (Note 23.2) and the Supplementary Pension Plan (Note 23.1).



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24. Capital stock

As of December 31, 2015, the Companys capital stock amounted to 2,019, fully subscribed, issued, paid-in and authorized for public
trading.

Changes in capital stock in the last three fiscal years:



|                                                       |  |      |       |  |      |  |       |      |  |  |       | 
|------------------------------------------------------ |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                       |  | 2015 |       |  | 2013 |  |       | 2012 | 
|Common shares of 1 vote and face value of $1 per share |  |      | 2,019 |  |      |  | 2,019 |      |  |  | 2,019 | 

Restrictions on availability of the Companys shares

Law No. 27.181 passed on October 5, 2015 declared of public interest the protection of the National Governments shareholdings
that are part, among others, of the investment portfolio of the Sustainability Guarantee Fund (Fondo de Garantía de Sustentabilidad) of the Argentine Integrated Social Security System (Sistema Integrado Previsional Argentino). To such effect,
the Argentine Agency of Government Investments in Companies was created as enforcement authority.

According to the provisions of such
law, the transfer of Companys shares held by the Sustainability Guarantee Fund of the Argentine Integrated Social Security System shall require prior authorization of the Argentine Congress.

25. Reserves



|                                       |  |      |       |  |      |  |       |      |  |  |       | 
|-------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                       |  | 2015 |       |  | 2014 |  |       | 2013 | 
|Legal reserve                          |  |      | 576   |  |      |  | 553   |      |  |  | 515   | 
|Optional reserve for future investment |  |      | 5,730 |  |      |  | 5,432 |      |  |  | 4,943 | 
|Reserve for future dividends           |  |      | 1,159 |  |      |  | 1,159 |      |  |  | 1,050 | 
|                                       |  |      |       |  |      |  |       |      |  |  |       | 
|                                       |  |      | 7,465 |  |      |  | 7,144 |      |  |  | 6,508 | 
|                                       |  |      |       |  |      |  |       |      |  |  |       | 

26. Unappropriated retained earnings



|                                      |  |      |      |   |      |  |      |      |  |  |      |  
|------------------------------------- |  | ---- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                      |  | 2015 |      |   | 2014 |  |      | 2013 | 
|Balances at the beginning of the year |  |      | 458  |   |      |  | 752  |      |  |  | 528  |  
|Legal reserve                         |  |      | (23  | ) |      |  | (38  | )    |  |  | (32  | )
|Reserve for future investments        |  |      | (298 | ) |      |  | (489 | )    |  |  | (162 | )
|Reserve for future dividends          |  |      | (137 | ) |      |  | (225 | )    |  |  | (361 | )
|Income attributable to shareholders   |  |      | 853  |   |      |  | 458  |      |  |  | 779  |  
|                                      |  |      |      |   |      |  |      |      |  |  |      |  
|Balances at the end of the period     |  |      | 853  |   |      |  | 458  |      |  |  | 752  |  
|                                      |  |      |      |   |      |  |      |      |  |  |      |  

27. Other comprehensive income



|                                                      |  |      |       |   |      |  |       |      |  |  |      |  
|----------------------------------------------------- |  | ---- | ----- | - | ---- |  | ----- | ---- |  |  | ---- | -
|                                                      |  | 2015 |       |   | 2014 |  |       | 2013 | 
|Effect of exchange rate fluctuation                   |  |      | 1,691 |   |      |  | 1,097 |      |  |  | 742  |  
|Income tax on the effect of exchange rate fluctuation |  |      | (668  | ) |      |  | (664  | )    |  |  | (591 | )
|Actuarial profits and loss                            |  |      | 128   |   |      |  | 60    |      |  |  | 58   |  
|Income Tax on actuarial gains and losses              |  |      | (45   | ) |      |  | (21   | )    |  |  | (20  | )
|                                                      |  |      |       |   |      |  |       |      |  |  |      |  
|                                                      |  |      | 1,106 |   |      |  | 472   |      |  |  | 189  |  
|                                                      |  |      |       |   |      |  |       |      |  |  |      |  



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28. Related party transactions

Sale of companies

In December 2007 and in April 2009, Petrobras Argentina sold to PIB BV (a subsidiary of its holding company) a 40% equity
interest and the remaining 60% equity interest in PVIE for USD423.3 million and USD619.4 million, respectively.

The agreed
price further includes a contingent consideration in favor of the Company to reflect the value of the Prospectus Kinteroni in market conditions or, alternatively, non-participation of the buyer and their respective compensation. Such
compensation defined by the parties a consequence of the discovery of gas and condensate in the prospectus Kinteroni of Block 57 in January 2008. The Company continues negotiating with the buyer in order to agree on the amount.

Financial guarantees

In 2007, Petrobras Argentina issued USD300 million Class S corporate bonds, collateralized by a Standby Purchase Agreement
provided by Petróleo Brasileiro (Note 20).

Commercial transactions

The Company carries out commercial transactions in the ordinary course of business. The Company makes purchase and sale of
crude oil and oil related products with PELSA, Refinería del Norte and EG3 Red, and operations of transportation of oil and gas with Oldelval and TGS. In addition, the Company makes crude oil and oil related products import and export
transactions with subsidiaries of Petróleo Brasileiro (including an administrative infrastructure cost sharing agreement), particularly with Brasken S.A. and Petrobras Global Trading BV. In addition, the Company has contracts of technical,
administrative and technological assistance with PBI BV, Petróleo Brasileiro, Petrobras Colombia Combustible and Petrobras Venezuela Inversiones y Servicios. Finally, transactions with OCP are described in Note 30.

Balances and transactions with related companies

Outstanding balances with related parties as of December 31, 2015, 2014 and 2013 are as follows:



|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 
|----------------------------------------------------- |  | ---------------- | -- |  | ---------------- |  | --- | --------------- |  |  | ---------- |  |  | ---------- | --- |  |  |  | -- |  |  | 
|                                                      |  | 2015             |    |  |                 
|                                                      |  | Current          |    |  | Non-current      |  |     |                
|Company                                               |  | TradeReceivables |    |  | OtherReceivables |  |     | AccountsPayable |  |  | Provisions |  |  | Provisions |     |  | 
|Companies in wich it excercises significant influence |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 
|OCP                                                   |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |            | 299 |  |  |  | 88 |  |  | 
|Refinería del Norte S.A.                              |  |                  | 10 |  |                  |  |    |                 |  |  | 16         |  |  |            |    |  |  |  |   |  |  | 
|Other                                                 |  |                  |   |  |                  |  | 125 |                 |  |  | 14         |  |  |            | 3   |  |  |  |   |  |  | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 
|                                                      |  |                  | 10 |  |                  |  | 125 |                 |  |  | 30         |  |  |            | 302 |  |  |  | 88 |  |  | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 
|Companies under joint control                         |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 
|TGS                                                   |  |                  | 5  |  |                  |  | 31  |                 |  |  | 33         |  |  |            | 17  |  |  |  |   |  |  | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 
|                                                      |  |                  | 5  |  |                  |  | 31  |                 |  |  | 33         |  |  |            | 17  |  |  |  |   |  |  | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 
|Petróleo Brasileiro Group companies                   |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 
|Braskem S.A.                                          |  |                  |   |  |                  |  |    |                 |  |  | 17         |  |  |            |    |  |  |  |   |  |  | 
|PIB BV                                                |  |                  |   |  |                  |  | 366 |                 |  |  |           |  |  |            |    |  |  |  |   |  |  | 
|Petrobras Venezuela Inversiones y Servicios S.A.      |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |            | 62  |  |  |  |   |  |  | 
|Petrobras Global Trading B.V.                         |  |                  | 1  |  |                  |  | 1   |                 |  |  | 1          |  |  |            |    |  |  |  |   |  |  | 
|Petróleo Brasileiro                                   |  |                  |   |  |                  |  | 6   |                 |  |  | 253        |  |  |            | 220 |  |  |  |   |  |  | 
|Petrobras Colombia Combustible                        |  |                  |   |  |                  |  | 34  |                 |  |  |           |  |  |            |    |  |  |  |    |  |  | 
|Other                                                 |  |                  | 6  |  |                  |  | 58  |                 |  |  | 5          |  |  |            |    |  |  |  |   |  |  | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 
|                                                      |  |                  | 7  |  |                  |  | 465 |                 |  |  | 276        |  |  |            | 282 |  |  |  |   |  |  | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 
|Total                                                 |  |                  | 22 |  |                  |  | 621 |                 |  |  | 339        |  |  |            | 601 |  |  |  | 88 |  |  | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |            |     |  |  |  |    |  |  | 



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|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|----------------------------------------------------- |  | ---------------- | -- |  | ---------------- |  | --- | --------------- |  |  | ---------- |  |  | ---------------- | --- |  | ---------- |  | --- |  |  |  | --- | 
|                                                      |  | 2014             |    |  |                  | 
|                                                      |  | Current          |    |  | Non-current      |  |     |                 | 
|Company                                               |  | TradeReceivables |    |  | OtherReceivables |  |     | AccountsPayable |  |  | Provisions |  |  | Provisions       |     |  |            | 
|Companies in wich it excercises significant influence |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|OCP                                                   |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |                  | 130 |  |            |  | 299 |  |  |  |     | 
|Refinería del Norte S.A.                              |  |                  | 13 |  |                  |  | 10  |                 |  |  | 8          |  |  |                  |    |  |            |  |    |  |  |  |     | 
|Other                                                 |  |                  |   |  |                  |  | 84  |                 |  |  | 7          |  |  |                  | 2   |  |            |  |    |  |  |  |     | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|                                                      |  |                  | 13 |  |                  |  | 94  |                 |  |  | 15         |  |  |                  | 132 |  |            |  | 299 |  |  |  |     | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Companies under joint control                         |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|TGS                                                   |  |                  | 39 |  |                  |  |    |                 |  |  | 22         |  |  |                  |    |  |            |  |    |  |  |  |     | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|                                                      |  |                  | 39 |  |                  |  |    |                 |  |  | 22         |  |  |                  |    |  |            |  |    |  |  |  |     | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Petróleo Brasileiro Group companies                   |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Braskem S.A.                                          |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |                  |    |  |            |  |    |  |  |  |     | 
|PIB BV                                                |  |                  |   |  |                  |  | 240 |                 |  |  |           |  |  |                  |    |  |            |  |    |  |  |  |     | 
|Petrobras Venezuela Inversiones y Servicios S.A.      |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |                  | 36  |  |            |  |    |  |  |  |     | 
|Petrobras Global Trading B.V.                         |  |                  | 8  |  |                  |  |    |                 |  |  |           |  |  |                  |    |  |            |  |    |  |  |  |     | 
|Petróleo Brasileiro                                   |  |                  | 4  |  |                  |  | 15  |                 |  |  | 162        |  |  |                  | 12  |  |            |  |    |  |  |  |     | 
|Other                                                 |  |                  | 3  |  |                  |  | 91  |                 |  |  | 8          |  |  |                  | 7   |  |            |  |    |  |  |  |     | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|                                                      |  |                  | 15 |  |                  |  | 346 |                 |  |  | 170        |  |  |                  | 55  |  |            |  |    |  |  |  |     | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Total                                                 |  |                  | 67 |  |                  |  | 440 |                 |  |  | 207        |  |  |                  | 187 |  |            |  | 299 |  |  |  |     | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|                                                      | 
|                                                      |  | 2013             |   
|                                                      |  | Current          |    |  | Non-current      | 
|Company                                               |  | TradeReceivables |    |  | OtherReceivables |  |     | AccountsPayable |  |  | Provisions |  |  | OtherInvestments |     |  | Provisions | 
|Companies in wich it excercises significant influence |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|OCP                                                   |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |                  | 92  |  |            |  | 127 |  |  |  | 288 | 
|Refinería del Norte S.A.                              |  |                  | 4  |  |                  |  | 13  |                 |  |  | 7          |  |  |                  |    |  |            |  |    |  |  |  |    | 
|Other                                                 |  |                  | 6  |  |                  |  | 109 |                 |  |  | 6          |  |  |                  | 7   |  |            |  | 1   |  |  |  |    | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|                                                      |  |                  | 10 |  |                  |  | 122 |                 |  |  | 13         |  |  |                  | 99  |  |            |  | 128 |  |  |  | 288 | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Companies under joint control                         |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|TGS                                                   |  |                  | 21 |  |                  |  | 8   |                 |  |  | 12         |  |  |                  |    |  |            |  |    |  |  |  |    | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|                                                      |  |                  | 21 |  |                  |  | 8   |                 |  |  | 12         |  |  |                  |    |  |            |  |    |  |  |  |    | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Petróleo Brasileiro Group companies                   |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Braskem S.A.                                          |  |                  |   |  |                  |  |    |                 |  |  | 60         |  |  |                  |    |  |            |  |    |  |  |  |    | 
|PIB BV                                                |  |                  |   |  |                  |  | 237 |                 |  |  |           |  |  |                  |    |  |            |  |    |  |  |  |    | 
|Petrobras Venezuela Inversiones y Servicios S.A.      |  |                  |   |  |                  |  |    |                 |  |  |           |  |  |                  | 16  |  |            |  |    |  |  |  |    | 
|Petróleo Brasileiro                                   |  |                  | 1  |  |                  |  | 3   |                 |  |  | 144        |  |  |                  |    |  |            |  |    |  |  |  |    | 
|Other                                                 |  |                  | 11 |  |                  |  | 39  |                 |  |  | 10         |  |  |                  |    |  |            |  |    |  |  |  |    | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|                                                      |  |                  | 12 |  |                  |  | 279 |                 |  |  | 214        |  |  |                  | 16  |  |            |  |    |  |  |  |    | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 
|Total                                                 |  |                  | 43 |  |                  |  | 409 |                 |  |  | 239        |  |  |                  | 115 |  |            |  | 128 |  |  |  | 288 | 
|                                                      |  |                  |    |  |                  |  |     |                 |  |  |            |  |  |                  |     |  |            |  |     |  |  |  |     | 

The main transactions with related companies for the years ended December 31, 2015, 2014 and 2013 are as
follows:



|                                                      |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|----------------------------------------------------- |  | --------- | --- |  | ----- |  | --- | --------- |  |  | ----- |  |  | --------- | --- |  | ----- |  | --- |  |  |  | --- | 
|                                                      |  | 2015      |     |  | 2014  |  |     | 2013      | 
|Company                                               |  | Purchases |     |  | Sales |  |     | Purchases |  |  | Sales |  |  | Purchases |     |  | Sales | 
|Companies in wich it excercises significant influence |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|Oleoductos del Valle S.A.                             |  |           | 81  |  |       |  | 4   |           |  |  | 77    |  |  |           | 4   |  |       |  | 46  |  |  |  | 3   | 
|Refinería del Norte S.A.                              |  |           | 166 |  |       |  | 84  |           |  |  | 151   |  |  |           | 67  |  |       |  | 86  |  |  |  | 42  | 
|                                                      |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|                                                      |  |           | 247 |  |       |  | 88  |           |  |  | 228   |  |  |           | 71  |  |       |  | 132 |  |  |  | 45  | 
|                                                      |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|Companies under joint control                         |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|TGS                                                   |  |           | 127 |  |       |  | 161 |           |  |  | 88    |  |  |           | 221 |  |       |  | 68  |  |  |  | 202 | 
|                                                      |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|                                                      |  |           | 88  |  |       |  | 161 |           |  |  | 88    |  |  |           | 221 |  |       |  | 68  |  |  |  | 202 | 
|                                                      |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|Petróleo Brasileiro Group companies                   |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|Braskem S.A.                                          |  |           | 158 |  |       |  |    |           |  |  | 416   |  |  |           |    |  |       |  | 471 |  |  |  |    | 
|Petróleo Brasileiro                                   |  |           | 69  |  |       |  | 5   |           |  |  | 40    |  |  |           | 5   |  |       |  | 122 |  |  |  | 17  | 
|Compañía Mega S.A.                                    |  |           |    |  |       |  | 2   |           |  |  |      |  |  |           | 18  |  |       |  |    |  |  |  | 7   | 
|Petrobras Paraguay Operaciones y Logistica S.R.L.     |  |           |    |  |       |  | 3   |           |  |  |      |  |  |           | 86  |  |       |  |    |  |  |  | 47  | 
|Petrobras Global Trading BV                           |  |           | 58  |  |       |  | 77  |           |  |  | 65    |  |  |           | 35  |  |       |  | 41  |  |  |  |    | 
|Petrobras Chile Distribución Limitada                 |  |           |    |  |       |  | 75  |           |  |  |      |  |  |           | 77  |  |       |  |    |  |  |  |    | 
|Other                                                 |  |           | 3   |  |       |  | 1   |           |  |  | 4     |  |  |           | 2   |  |       |  | 3   |  |  |  | 200 | 
|                                                      |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|                                                      |  |           | 288 |  |       |  | 163 |           |  |  | 525   |  |  |           | 223 |  |       |  | 637 |  |  |  | 271 | 
|                                                      |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 
|Total                                                 |  |           | 662 |  |       |  | 412 |           |  |  | 841   |  |  |           | 515 |  |       |  | 837 |  |  |  | 518 | 
|                                                      |  |           |     |  |       |  |     |           |  |  |       |  |  |           |     |  |       |  |     |  |  |  |     | 



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During 2015, 2014 and 2013, the Company paid to its directors and executive
officers salaries for approximately 34, 26 and 18, and no significant payments of other benefits were made. The members of the Board of Directors and executive officers do not receive any share based payments or compensation.

29. Oil and gas areas and participation in joint ventures

29.1. General considerations

The Company is jointly and severally liable with the other participants for meeting the contractual obligations under these
arrangements.

The production areas in Argentina are operated pursuant to concession production agreements with free crude
oil availability.

According to Law No.17,319, royalties equivalent to 12% of the wellhead price of crude oil and natural
gas are paid in Argentina. The wellhead price is calculated by deducting freight and other sales related expenses from the sale prices obtained from transactions with third parties. This rate may increase from 3% to 4% depending to the producing
jurisdiction and market value of the product.

The Companys branch in Bolivia performs at its own risk and for its
own account, in the name and on behalf of YPFB exploration and production activities within the Colpa Caranda area. Pursuant to the agreement, YPFB owns the hydrocarbons, pays royalties and direct tax on hydrocarbons, which in the aggregate amount
to 50% of the production valued on the basis of sales prices, and applies the 80% of the surplus amount to pay, in the first place, the costs and depreciations associated to the development and operation of Petrobras Argentinas branch, being
the rest shared between YPFB and the branch on the basis of an index calculated based on production volumes, depreciation rate, prices and taxes paid, among other items.

29.2. Exploratory well costs

The following table provides the year end balances and activity for exploratory well costs, during the years ended
December 31, 2015, 2014 and 2013:



|                            |  |       |   |  |      |  |      |      |  |  |      |   |  |  |      |  
|--------------------------- |  | ----- | - |  | ---- |  | ---- | ---- |  |  | ---- | - |  |  | ---- | -
|                            |  | Notes |   |  | 2015 |  |      | 2014 |  |  | 2013 |  
|Beginning balance           |  |       |   |  |      |  | 617  |      |  |  | 298  |   |  |  | 116  |  
|Traslation effect           |  |       |   |  |      |  | 20   |      |  |  | 13   |   |  |  | 5    |  
|Additions                   |  |       |   |  |      |  | 330  |      |  |  | 349  |   |  |  | 319  |  
|Transferred to development  |  |       |   |  |      |  | (615 | )    |  |  | (32  | ) |  |  | (115 | )
|Charged to expenses         |  |       | 8 |  |      |  | (83  | )    |  |  | (11  | ) |  |  | (27  | )
|                            |  |       |   |  |      |  |      |      |  |  |      |   |  |  |      |  
|Ending balance              |  |       |   |  |      |  | 269  |      |  |  | 617  |   |  |  | 298  |  
|                            |  |       |   |  |      |  |      |      |  |  |      |   |  |  |      |  
|Number of wells at year end |  |       |   |  |      |  | 15   |      |  |  | 32   |   |  |  | 23   |  
|                            |  |       |   |  |      |  |      |      |  |  |      |   |  |  |      |  



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29.3. Oil and gas areas and participation in joint-operations

As of December 31, 2015, the Company and associates are part of the joint operations and consortia for the exploration and
production of oil and gas as indicated below:



|                                  |  |      |    |   |          |                                  |                  |  |        |          |  |          |          |   |  |                         |  |          
|--------------------------------- |  | ---- | -- | - | -------- | -------------------------------- | ---------------- |  | ------ | -------- |  | -------- | -------- | - |  | ----------------------- |  | ---------
|                                  |  |      |    |   |          |                                  | Working Interest |  |        |          |  | Duration
|Name                              |  | Note |    |   | Location |                                  | Direct           |  |        | Indirect |  |          | Operator |  
|Production Argentina              |  |      |    |   |          |                                  |                  |  |        |          |  |          |          |   |  |                         |  |          
|25 de Mayo - Medanito S.E.        |  |      | (a | ) |          | La Pampa and Río Negro           |                  |  | 100.00 | %        |  |          |         |   |  | Petrobras Argentina     |  | 2016/2026
|Jagüel de los Machos              |  |      | (a | ) |          | La Pampa and Río Negro           |                  |  | 100.00 | %        |  |          |         |   |  | Petrobras Argentina     |  | 2015/2025
|Bajada del Palo                   |  |      |    |   |          | Neuquén                          |                  |  | 3.85   | %        |  |          | 43.07    | % |  | PELSA                   |  | 2025     
|Río Neuquén                       |  |      | (a | ) |          | Neuquén and Río Negro            |                  |  | 100.00 | %        |  |          |         |   |  | Petrobras Argentina     |  | 2027     
|Entre Lomas                       |  |      | (a | ) |          | Neuquén and Río Negro            |                  |  | 3.85   | %        |  |          | 43.07    | % |  | PELSA                   |  | 2026     
|Aguada de la Arena                |  |      |    |   |          | Neuquén                          |                  |  | 80.00  | %        |  |          |         |   |  | Petrobras Argentina     |  | 2036     
|Sierra Chata                      |  |      |    |   |          | Neuquén                          |                  |  | 19.89  | %        |  |          | 25.67    | % |  | Petrobras Argentina     |  | 2023     
|El Mangrullo                      |  |      | (b | ) |          | Neuquén                          |                  |  | 100.00 | %        |  |          |         |   |  | Petrobras Argentina     |  | 2025     
|Atuel Norte                       |  |      |    |   |          | Mendoza                          |                  |  | 33.33  | %        |  |          |         |   |  | Tecpetrol               |  | 2016     
|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                  |  |      | (c | ) |          | Mendoza                          |                  |  | 22.51  | %        |  |          |         |   |  | Pluspetrol              |  | 2036     
|Jarilla Quemada                   |  |      |    |   |          | Río Negro                        |                  |  | 3.85   | %        |  |          | 43.07    | % |  | PELSA                   |  | 2040     
|Charco del Palenque               |  |      |    |   |          | Río Negro                        |                  |  | 3.85   | %        |  |          | 43.07    | % |  | PELSA                   |  | 2034     
|Foreign                           |  |      |    |   |          |                                  |                  |  |        |          |  |          |          |   |  |                         |  |          
|Colpa - Caranda                   |  |      |    |   |          | Bolivia                          |                  |  | 100.00 | %        |  |          |         |   |  | Petrobras Argentina     |  | 2029     
|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     
|Exploration Argentina             |  |      |    |   |          |                                  |                  |  |        |          |  |          |          |   |  |                         |  |          
|Cerro Hamaca Norte                |  |      | (c | ) |          | Mendoza                          |                  |  | 39.64  | %        |  |          |         |   |  | Pluspetrol              |  |         
|Parva Negra                       |  |      | (d | ) |          | Neuquén                          |                  |  | 42.50  | %        |  |          |         |   |  | Petrobras Argentina     |  | 2018     
|Enarsa 1 (E1)                     |  |      | (e | ) |          | Plataforma Continental Argentina |                  |  | 25.00  | %        |  |          |         |   |  | YPF                     |  |         
|Enarsa 3 (E3)                     |  |      | (e | ) |          | Plataforma Continental Argentina |                  |  | 35.00  | %        |  |          |         |   |  | Petrobras Argentina     |  |         
|Chirete                           |  |      |    |   |          | Salta                            |                  |  | 50.00  | %        |  |          |         |   |  | High Luck Group Limited |  | 2016     
|Río Atuel                         |  |      |    |   |          | Mendoza                          |                  |  | 33.33  | %        |  |          |         |   |  | Tecpetrol               |  | 2016     
|Borde del Limay                   |  |      | (f | ) |          | Neuquén                          |                  |  | 85.00  | %        |  |          |         |   |  | Petrobras Argentina     |  | 2014     
|Los Vértices                      |  |      | (f | ) |          | Neuquén                          |                  |  | 85.00  | %        |  |          |         |   |  | Petrobras Argentina     |  | 2014     
|Veta Escondida y Rincón de Aranda |  |      |    |   |          | Neuquén                          |                  |  | 55.00  | %        |  |          |         |   |  | Petrobras Argentina     |  | 2027     



|(a) | See Note 29.7.
|--- | --------------

|(b) | The Company signed an agreement with Petrolera Pampa SA to make additional investments in well drilling, which would entitle Petrolera Pampa S.A. to obtain 43% of the production.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | The granting of the concession is in progress and the term will be 25 years from such granting.
|--- | -----------------------------------------------------------------------------------------------

|(d) | The Company has yield 50% of its direct and indirect working interest to ExxonMobil Exploration Argentina S.R.L.
|--- | ----------------------------------------------------------------------------------------------------------------

|(e) | The Company, in compliance with article 5.2 of the respective partnership agreements, informed to the partners of Enarsa 1 and Enarsa 3 its decision not to participate in retraining them in exploration permits according
to Art. 30 of Law 27,007.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(f) | It is in process of returning to Gas y Petróleo del Neuquén SA (Permit holder).
|--- | ---------------------------------------------------------------------------------



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29.4. Production concession in the Veta Escondida area

On April 4, 2012 by the sanction of the Provincial Decree No. 563/12, Petrobras Argentina was notified of a decision
of the government of the Province of Neuquén to terminate the production concession in the Veta Escondida area. The Company has sought relief alleging that it has complied with all requirements under the concession and that it did not commit
any breach which would support the decision adopted by the Government of Neuquén.

On December 19, 2013,
Petrobras Argentina(as operator), and Total Austral having an interest of 55% and 45% in the Veta Escondida exploitation concession, respectively, reached an out-of-court agreement with the Province of Neuquén and GyP to settle the dispute
arising from the enactment of Provincial Decree No. 563/12 which declared the expiration of the concessionaires rights under this exploitation concession and had led Petrobras Argentina to bring complaint against the Province of
Neuquén.

On March 17, 2015, under Decree No.565/2015, the Province of Neuquén approved a standard
agreement including terms and conditions similar to those provided in the agreement reached in December 2013. At the date of these financial statements, the parties are negotiating a solution to the conflict taking into account the model agreement
approved and the current situation of the industry and market.

29.5. Changes in working interest oil and gas areas

On January 31, 2014 the Board of Directors approved the sale to YPF S.A. of the entire interest of 38,45% in the Puesto
Hernández Joint Operation (UTE) agreement, for a total price of USD 40.7 million and recognized income before income tax of 181 recorded in Other operating expenses, net (Note 9). This transaction represents for the Company
an early termination of the Joint Operation (UTE) agreement, whose assets represented approximately 1% of the total assets of the Company as of December 31, 2013.

The joint operation (UTE) agreement for the exploration and potential exploitation of the area Parva Negra Este, was approved
by the Executive Branch of the province of Neuquén through Decree No. 575/14, published on April 4, 2014. The Company has the commitment to drill four onshore wells in the next two years, with a guaranteed amount of USD
27 million for the first year.

The Company had submitted a request for an exploitation concession in Parva Negra
area, holding a direct and indirect interest of 47.63% and 52.37%, respectively. In 2014 the Company renegotiated its rights on the area and entered into a joint operation agreement with Gas y Petróleo del Neuquén S.A. (GyP), holder of
the Parva Negra Este exploration permit, with GyP having a 15% interest and Petrobras (operator) having a 85% direct and indirect interest (40.48% direct and 44.52% indirect).

On March 30, 2015, the Companys Board of Directors approved the sale to Compañía General de
Combustibles S.A. of the Companys entire interest in the Austral basin in Argentina in the amount of USD 101 million, resulting in a pre-tax gain of 675 recorded in Other operating expenses, net (Note 9). The transaction
includes concessions operated under the Joint Ventures (UTE) of Santa Cruz I, Santa Cruz I Oeste, Glencross and Estancia Chiripá, assets related to Santa Cruz II, Punta Loyola Terminal and oil and gas pipelines operated in the basin.

In the third quarter of 2015, the Executive Branch of the Province of Salta, through Provincial Decree No. 3,129/15,
ratified the incorporation of High Luck Group in the Chirete area. Therefore, the Companys current interest in such area is 50%.

In the third quarter of 2015, the Executive Branch of the Province of Neuquén, through Provincial Decree
No. 1,600/15, ratified the incorporation of Exxon Mobil Exploration Argentina S.R.L. in the Parva Negra Este area and therefore the Companys current interest in such area is 42.50%.

29.6. Renegotiation of interest in oil and gas areas

On December 30, 2014 the Legislative Body of the Province of Río Negro ratified the agreement entered into with the
Province on December 9, 2014 and approved by the Argentine Executive Branch under Decree No. 1,708/2014 on December 15, 2014, to extend for a 10-year term the three concessions the Company holds in that Province: 25 de Mayo 
Medanito, Jagüel de los Machos and Río Neuquén.



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This agreement mainly establishes the obligations of Petrobras Argentina S.A. to
pay a Fixed Bond of USD 40 million, a USD 8 million contribution to Social Development and Institutional Strengthening and a 3% supplementary contribution on hydrocarbon production (in addition to the 12% royalty payment). Likewise, it was
agreed to assign to Empresa de Desarrollo Hidrocarburífero Provincial Sociedad Anónima (EDHIPSA) 5% of the rights and obligations inherent to the production concession in the Rio Neuquén area in the Province of Rio Negro.
Formalization of the mentioned assignment is in implementation phase as set forth in Article 3.18 of the agreement.

Petrobras Argentina has committed to spend about USD 907.7 million in hydrocarbon exploration and production as from the
effective date of the agreement until the new expiration date of the concessions, of which 450.7 are up to 2017, 266.1 from 2018 to 2020 and 190.9 from 2021 onwards.

In addition, on December 30, 2014 the Legislative Body of the Province of Río Negro ratified the agreement entered
into with PELSA to extend for a 10-year term the concession in the Entre Lomas field held by the Company in that Province.

This agreement mainly establishes the obligations of PELSA to pay a Fixed Bond of USD 25.3 million, a USD 5 million
contribution to Social Development and Institutional Strengthening and a 3% supplementary contribution on hydrocarbon production (in addition to the 12% royalty payment). PELSA has committed to spend about USD 491.8 million in hydrocarbon
exploration and production as from the effective date of the agreement until the new expiration date of the concessions of which 172.8 are up to 2017, 139.9 from 2018 to 2020 and 179.1 from 2021 onwards.

In November 2014, the Company announced an investment of USD 622 million for the development of Punta Rosada formation in
the province of Neuquén. The investment includes the drilling of 44 wells up to 4,000 meters deep search for tight gas. In 2014, 2015 and 2016, the investment will amount to USD 245 million and at least 15 wells that will add
1.4 million m3 per day of gas production in the province of Neuquén be drilled. Petrobras Argentina takes on the challenge of increasing production and increasing gas reserves.

Concerning the Jagüel de los Machos area in the Province of La Pampa, a legal dispute arose with such Province relating to
the non-recognition of the extension rights on such area acquired by the Company according to the provisions of National Law No. 17,319, as amended by Law No. 27,007, and under the provisions of Provincial Decree No. 18/2015 dated
January 28, 2015. As a result, although the Company has filed the relevant administrative motions for the defense of the rights vested on it, as from September 7, 2015 the Province of La Pampa has taken possession of the area and,
consequently, all the Companys activities in such area have been discontinued, with a loss of 121 shown under Other operating expenses, net (Note 9).

Regarding the 25 de Mayo-Medanito S.E. concession in the Province of La Pampa, on March 30, 2016, the legislature of the
Province of La Pampa approved a bill declaring the strategic importance of the portion of the 25 de Mayo-Medanito S.E. area located within such province, and transferring its possession to the Province upon expiration of the Company original
concession period of 25 years in November 2016, although the Company is entitled to request a 10-year extension period of the Companys concession under the applicable law.

29.7. Investment commitments

In addition to the information in note 29.6, in Argentina, in connection with its interest in the consortia in charge of
exploration activities in Río Colorado, Río Atuel, and Parva Negra Este oil areas, as of December 31, 2015 the Company has investment commitments of approximately USD 9 million, including drilling of exploration wells. PELSA
has investment commitments totaling USD 22 million. Total of both, 8 are up to 2017, 11 from 2018 to 2020 and 12 from 2021 onwards.



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29.8. Relevant information

Relevant information on assets, liabilities and results related to the Companys interests in joint operations as of
December 31, 2015, 2014 and 2013, includes the following:

Assets and liabilities



|                        |  |      |       |  |      |  |       |      |  |  |       | 
|----------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                        |  | 2015 |       |  | 2014 |  |       | 2013 | 
|Current assets          |  |      | 230   |  |      |  | 341   |      |  |  | 467   | 
|Non-current assets      |  |      | 3,855 |  |      |  | 4,103 |      |  |  | 3,255 | 
|                        |  |      |       |  |      |  |       |      |  |  |       | 
|Total assets            |  |      | 4,085 |  |      |  | 4,444 |      |  |  | 3,722 | 
|                        |  |      |       |  |      |  |       |      |  |  |       | 
|Current liabilities     |  |      | 976   |  |      |  | 1,241 |      |  |  | 1,011 | 
|Non-current liabilities |  |      | 555   |  |      |  | 625   |      |  |  | 609   | 
|                        |  |      |       |  |      |  |       |      |  |  |       | 
|Total liabilities       |  |      | 1,531 |  |      |  | 1,866 |      |  |  | 1,620 | 
|                        |  |      |       |  |      |  |       |      |  |  |       | 

Statements of Income for the years ended December 31, 2015, 2014 and 2013



|                                    |  |      |        |   |      |  |        |      |  |  |        |  
|----------------------------------- |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                    |  | 2015 |        |   | 2014 |  |        | 2013 | 
|Sales                               |  |      | 3,944  |   |      |  | 4,273  |      |  |  | 3,413  |  
|Cost of sales                       |  |      | (3,224 | ) |      |  | (3,375 | )    |  |  | (2,884 | )
|                                    |  |      |        |   |      |  |        |      |  |  |        |  
|Gross profit                        |  |      | 720    |   |      |  | 898    |      |  |  | 529    |  
|Administrative and selling expenses |  |      | 139    |   |      |  | (156   | )    |  |  | (97    | )
|Exploration expenses                |  |      | (115   | ) |      |  | (49    | )    |  |  | (43    | )
|Other operating expenses, net       |  |      | (35    | ) |      |  | (60    | )    |  |  | (24    | )
|Financial results                   |  |      | (257   | ) |      |  | (259   | )    |  |  | (210   | )
|                                    |  |      |        |   |      |  |        |      |  |  |        |  
|Net income before tax               |  |      | 174    |   |      |  | 374    |      |  |  | 155    |  
|                                    |  |      |        |   |      |  |        |      |  |  |        |  

The charge for income tax is not an obligation for UTEs but an obligation for companies which integrate them.

30. Operations in Ecuador

As from
2006 the Ecuadorian Government introduced major tax and regulatory reforms in the hydrocarbon sector which resulted in significant changes to the terms and conditions set forth at the time of execution of the Participation Agreements.

Amendatory Agreements and Law amending the Hydrocarbon Law

On October 31, 2008, EcuadorTLC S.A., Teikoku Oil Ecuador and Petroecuador, among others, executed the Amendatory Agreements regulating
the operation of Block 18 and Palo Azul while the parties negotiated the migration to a new contract modality.

On July 26, 2010, the
amendment to the Hydrocarbon Law in force was approved by operation of law, which provided for, among other things, the obligation to migrate to a new contract modality before November 24, 2010.

As a result of the negotiation process mentioned above, the Company decided not to accept the final proposal received from the Ecuadorian
government, as this is insufficient to migrate to Service Agreements in Block 18 and Palo Azul Unified Field. Consequently, through Resolution dated November 25, 2010 the Hydrocarbon Secretary notified EcuadorTLC S.A. the termination of the
Participation Agreements and instructed Petroamazonas EP to undertake the operational transition process.



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Section 9 of the Amendatory Agreements indicates that the Ecuadorian government must
compensate the terminated parties in an amount equivalent to unamortized investments adjusted by a variable rate and provides for a period of time for the Ecuadorian government and the terminated parties to work out the details of the termination
payment.

On March 18, 2011, the Hydrocarbon Secretary issued Official Notice No. 626 to inform the Company that it was analyzing
and structuring a new regulatory framework to determine a settlement price for the termination, to be applied instead of the provisions of the Amendatory Agreements. On April 11, 2011, the Company filed an answer to the Official Notice and
rejected the terms thereof claiming these did not comply with the conditions set forth in the Amendatory Agreements by the parties concerned, which conditions may not be unilaterally modified. In this respect, the Company informed the Hydrocarbon
Secretary that it would continue to seek compliance with the terms of the Amendatory Agreements.

On December 8, 2011, Petrobras
Argentina served a notice on the Ecuadorian government (Trigger Letter) informing the existence of a dispute under the terms of the Treaty for the Promotion and Reciprocal Protection of Investments previously entered into between Argentina and
Ecuador. The Treaty, implies the opening of a negotiation period prior to a possible arbitration to seek enforcement of the provisions of the Amendatory Agreements.

On June 21, 2013, not having reached an agreement with the Ecuadorian government, EcuadorTLC SA, Cayman International Exploration Company
and Teikoku Oil Ecuador, members of the Consortium, submitted to the Ecuadorian Goverment a letter of notification of a dispute under the terms of the Amendatory Agreements starting their decision to submit the dispute to international arbitration
under the arbitration Rules of the United Nations Commission on International Trade Law. Finally, on February 26, 2014 the request for arbitration against Ecuador was presented in the above terms. The defendant submitted its answer to the
complaint and any objections to the jurisdiction of the arbitral tribunal on March 21, 2016. The members of the Consortium will submit its answer to the defendant arguments on or prior to May 12, 2016.

As of December 31, 2015 the Company has recorded 698 to be recovered from the Ecuadorian State in accordance with the provisions of the
Amendments Agreement, disclosed in Other current receivables (Note 15). This amount does not include the interest calculation for update, as the Company believes that it is not possible to determine with certainty the interest rate to be applied.

Crude Oil Transportation Agreement with OCP

The Company holds a contract with OCP, whereby it assumed a commitment to an oil transport capacity of 80,000 barrels/day for a term of 15
years counted as from November 10, 2003.

The transport contract is a Ship or Pay contract, so the Company must meet its
contractual obligations for the total volume agreed upon, regardless of the real volume transported, and has to pay, the same as the other producers, a rate that covers the operating costs and financial services of OCP, among others.

The Company has the right to sell the transport capacity in the heavy crude oil pipeline (OCP) to mitigate the negative impact of its non-use.
Periodically, the Company negotiates the sale of the hired transport capacity. On December 31, 2008, the Company entered into a contract with Petroecuador whereby the Ecuadorian State assumed a commitment to charge, effective January 1,
2009, the available crude owned by it and transported through the heavy crude oil pipeline to the oil transport capacity hired by the Company, up to a maximum volume of 70,000 barrels/day. In addition, the Company sold transport capacity of
approximately 8,000 barrels/day of oil for the period from July 2004 to January 2012. As a result of the contract non-compliance by the buyers, the Company is making the pertinent claims. Lastly, 40% of the net contractual commitment resulting from
the above had been assumed by Teikoku Oil Ecuador, as consideration for the transfer to this company of the 40% interest in Block 18 and Palo Azul in October 2008.

In the third quarter of 2015, the Company, through Petrobras Bolivia Internacional S.A., reassumed the obligations previously assigned to
Teikoku Oil Ecuador relating to the mentioned agreement and received a USD 95 million payment. As a result of this transaction the Company has the necessary funds to continue with negotiations in Ecuador. The estimated obligations of 626
attributable to Contracts renegotiations in Ecuador were recognized in current provisions (Note 22). Additionally, as of December 31, 2015 the Company carries a liability for the net transport capacity hired from OCP, in current and non-current
provisions for 299 and 88, respectively (Note 28). The premises used in calculation of the provisions mainly include the estimate of the applicable rate and the transport capacity used by third parties. The discount rates used in the measurement
consider the type of liability in question, the business segment and the country where the transactions are conducted. In estimating the liabilities as of December 31, 2015, as a result of the assumptions revision, the Company recorded a gain
of 507, under Other operating expenses, net (Note 9).



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The Company must hold letters of credit to ensure compliance with its financial commitments under
the Ship or Pay transport contract with OCP and the commitments related to OCP trade payables.

The letters of credit, falling due in
December 2018, will be gradually released in the same proportion as those commitments become extinguished. As of December 31, 2015, the Company holds letters of credit for approximately USD 64.2 million. The Company is required to renew or
replace the letters of credit as they fall due; otherwise, those amounts shall be paid in cash.

31. Contributions to finance additions to
infrastructure in the energy sector in Argentina

31.1. FONINVEMEM, 2008/2011 Agreement and Secretary of Energy Resolutions
No.95/2013, No. 529/2014 and No. 482/2015:

Through Resolution No. 712/04, the SE created the FONINVEMEM
I trust for the purpose of granting creditors an incentive to invest in the MEM thus increasing the generation of electrical power in Argentina. In 2007, through SE Resolution No.564/07, the SE requested MEM agents to participate in FONINVEMEM II,
with the purpose of complementing financing of FONINVEMEM I.

In addition, in November 2010 the SE and MEM generators
(among which the Company is included) entered into an agreement for the following purposes: (i) enable addition of new generation capacity to meet the increase in demand for Energy and Power in the MEM; (ii) improve availability of
existing generation equipment; (iii) determine a method to pay the amounts due to the generators accumulated in the 2008/2011 period, and (iv) recognize a higher Power price and an increase in recognized operating and maintenance costs.

On January 24, 2012, the SE Resolution No.495/12 suspended the greater recognition of operation and maintenance costs
and higher prices of power affecting the remuneration paid to generators.

On March 26, 2013, the SE issued Resolution
No. 95 which involved the change in the compensation of Generators, Cogeneration and Self-Generators MEM except the Generators Plus, the Binational Hydroelectric Generation and Nuclear Generation among others. One of its main changes is the
modification being paid Included Generators, for the case of Petrobras comprising the Combined Cycle and Hydroelectric Genelba Pichi Picún Leufú. The new resolution established that the generators had the option of joining or not the
conditions. On May 31, 2013, the company adhered to the new rules being the above mentioned central framed under the new resolution.

On May 20, 2014, retroactive to February of the same year, the SE through Resolution No. 529/2014 updated the
remunerative value of Resolution 95/2013 aforementioned. Additionally, the new legislation incorporated remuneration stands to cover nonrecurring Maintenance of thermal power plants and additional remuneration for thermal machines in periods of peak
seasonal demand.

On July 10, 2015, retroactive to February of the same year, the SE through Resolution
No. 482/2015 updated the remunerative value of SE Resolution 529/2014 aforementioned. In addition, the new rules incorporate remuneration for new investments and compensation for efficiency and production improvements.



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FONINVEMEM

The financing of FONINVEMEM I and II was made through the contribution of 35% and 50% of the credit balances recorded in
2004-2006 and in 2007, respectively, resulting from the spread between the selling price of energy and the variable generation cost. The total contribution in FONINVEMEM I by all the private power generating companies in the wholesale electric
market is estimated at USD 470 million, of which Petrobras Argentina contributed USD 42 million. In addition, the Company was reimbursed the credit balances recorded in 2007 in the amount of USD16 million pursuant to Resolution No.564/07.

On October 17, 2005 and under the terms of Resolution No. 1,193 issued by the SE, Petrobras Argentina and other MEM
creditors formally announced their decision to participate in the construction, operation and maintenance of two power plants of combined cycle 820 MW each.

For the purposes of the purchase of equipment and the construction, operation and maintenance of the power plants, two trusts
funds were created. The procurement of the equipment, construction, operation and maintenance of each power plant will be undertaken by Termoeléctrica José de San Martín S.A. and Termoeléctrica Manuel Belgrano S.A., which
will enter into a ten-year electricity supply agreement with CAMMESA for the 80% of the energy output, at a price that will allow to cover all costs. Also the contract provides the reimbursements of the FONINVEMEM and the repayment of the debt used
to finance the initial investment. The 20% of the electricity output is sold in the spot market. Upon expiration of the supply agreement, the ownership of the assets held in trust will be transferred to the power generation companies proportionally
to their contributions to finance the capital expenditure.

End of December 31, 2009, the gas turbines of both power
plants were operating in open cycle mode and started to operate in combined cycle as from the first quarter of 2010.

The
Company recovers the amounts contributed to the FONINVEMEM I, converted to USD and adjusted by Libo rate + 1% p.a., in 120 monthly installments starting March 2010, upon authorization of commercial operations of both power plants in the combined
cycle mode referred to above. In addition, the Company is a shareholder in both companies with 8.9% share.

By
December 31, 2009 the funds contributed by the Company to FONINVEMEM II had been fully recovered through investment in additional electricity generation projects under Resolution No. 564/2007 issued by the SE, whereby the Company built
Genelba Plus, a 165 MW thermoelectric plant close to the existing Genelba Power Plant.

2008/2011 Agreement

On November 25, 2010, the SE and MEM Generators signed the 2008/2011 Agreement which will be implemented through new
generation projects that have to be submitted by Generators to the SE for selection and subsequent approval.

As regards
payment to generators entered into the Agreement, certain methods established for them to maintain contribution margins, mainly as regards the Power price, recognition of higher variable maintenance costs and other non-fuel costs. The indicated
mechanism was in effect until December 31, 2011, with the implementation of the Resolution No.495/12 indicated above.



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Secretary of Energy Resolution (SE) No. 95/2013:

In March 2013, the SE issued Resolution No. 95/2013 which involved the modification of the remuneration scheme of
Generators, Cogeneration and Self-Generators MEM except the Generators Plus, the Binational Hydroelectric Power Generation and Nuclear Generation among others.

The main changes apply to generators that have joined this new scheme are:

(a) Changes in the remuneration of generating agents by scale and technology. Fixed costs and non-fuel variables as well as
additional remuneration are paid (the latter two items will be paid based on the generation of each machine) . Part of the additional compensation will go to a trust fund works the electricity sector.

b) Temporary Suspension of contracts between private, both electrical energy and fuels and associated inputs, which will be
administered by CAMMESA

c) Temporary Suspension of contracts Term Market for Base Demand and supply thus forcing the large
users acquire their demand for electrical energy CAMMESA. Until October 7, 2013, the membership of the company at that resolution as Large User MEM were performed.

Secretary of Energy Resolution No. 529/2014:

In May 2014, retroactive to February, Resolution No. 529/2014 was issued to update the values of remunerative from
Resolution No. 95/2013, the following remunerative concepts discriminated by scale and technology are added:

a)
Remuneration of Non-Recurring Maintenance, a concept that is accrued and paid on the basis of maintenance to be performed.

b) Compensation of Thermal Machines Fixed Costs in Relation to the availability, which provides an increase in the price paid
depending on the availability of the plant in the months of the year increased demand.

Secretary of Energy Resolution
No. 482/2015:

In July 2015, retroactive to February, Resolution No. 482/2015 was issued to update the values
of remunerative from Resolution No. 529/2014, the following remunerative concepts discriminated by scale and technology are added:

a) Resources for investments FONINVEMEN 2015-2018, to be assigned to generators with investment projects already approved, or
to be approved, by the Secretary of Energy.

b) Incentives for energy production and operational efficiency.

Decree No. 13/2015:

On December 11, 2015, Decree No. 13/2015 modified the Ministries Law No. 22,520. Among other changes, it created
the Ministry of Energy and Mining, which absorbs the functions of the Secretaries of Energy and Mining and decentralized entities, from the Ministry of Federal Planning, Public Investment and Services.

Ministry of Energy and Mining Resolution No. 22/2016:

In March 2016, and with retroactive effect as from February 2016, Resolution No. 22/2016 issued by the Ministry of Energy
and Mining set forth an upgrade in the compensation established under Resolution No. 482/2015.



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31.2. Financial Trust for Works on Gasoducto Sur (Fideicomiso Financiero de Obra Gasoducto
Sur)

In order to assist in financing the expansion of the transportation capacity of the General San Martín Gas
Pipeline, in the offshore leg across the Straits of Magellan, in the fourth quarter of 2009 Petrobras Argentina underwrote bonds issued by Fideicomiso Financiero de Obra Gasoducto Sur, for an amount in pesos equal to USD30 million.

Petrobras Argentina received in exchange debt securities denominated in Argentine pesos (VRD Obra-4 Estrecho
Definitivos) that bear interest at a rate equivalent to the Reference Stabilization Coefficient plus an annual nominal rate of 8%. The principal amortizes in 30 quarterly installments from April 25, 2011.

32. Warranty bonds, sureties and guarantees granted

The warranty bonds, sureties and guarantees as of December 31, 2015 which are not disclosed in other notes amount to 2,526.

Additionally, in certain business operations in which the Company and the counterparty act as customers and suppliers, both sides issued
guarantees for such operations by equivalent values, which at 31 December 2015 amount to 652.

In addition, as of December 31,
2015, the Company had the following contractual purchase and sale:



|                                             |  |      |  |               |       |  |                          |  |        |       |  |  |      | 
|-------------------------------------------- |  | ---- |  | ------------- | ----- |  | ------------------------ |  | ------ | ----- |  |  | ---- | 
|                                             |  | Note |  | Total (Units) |       |  | Total (Millions ofPesos) |  |        | Until | 
|Purchase Commitments                         |  |      |  |               |       |  |                          |  |        |       |  |  |      | 
|Long-term service agreement                  |  | (a)  |  |               |      |  |                          |  | 2,697  |       |  |  | 2031 | 
|Petroleum services and materials             |  | (a)  |  |               |      |  |                          |  | 8,526  |       |  |  | 2020 | 
|Transportarion capacity (in MMm3)            |  | (b)  |  |               | 1,896 |  |                          |  | 1,347  |       |  |  | 2032 | 
|Gas purchase agreement for Genelba (in MMm3) |  |      |  |               | 97    |  |                          |  | 212    |       |  |  | 2016 | 
|Gasolines (in millions of cubic meters)      |  |      |  |               | 5     |  |                          |  | 23,181 |       |  |  | 2026 | 
|Sale Commitments                             |  |      |  |               |       |  |                          |  |        |       |  |  |      | 
|Natural gas (in MMm3)                        |  |      |  |               | 298   |  |                          |  | 745    |       |  |  | 2016 | 
|Transportarion capacity (in MMm3)            |  |      |  |               | 355   |  |                          |  | 12     |       |  |  | 2019 | 
|Electric power (in thousands of MWh)         |  |      |  |               | 4,219 |  |                          |  | 4,252  |       |  |  | 2022 | 
|LPG (in thousands of tons)                   |  |      |  |               | 161   |  |                          |  | 714    |       |  |  | 2021 | 
|Gasolines (in millions of cubic meters)      |  |      |  |               | 3     |  |                          |  | 13,787 |       |  |  | 2026 | 
|Diesel (in millions of cubic meters)         |  |      |  |               | 37    |  |                          |  | 247    |       |  |  | 2016 | 



|(a) | Estimated price of $0.71 per MMm3.
|--- | ----------------------------------

|(b) | Prices are generally determined by formulas based on future market prices. Estimated prices used to calculate the monetary equivalent of these purchase commitments for purposes of the table are based on current market
prices as of December 31, 2015 and may not reflect actual future prices. Accordingly, the peso amounts provided in this table with respect to these commitments are provided for illustrative purpose only.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

33. General Resolution No. 629/2014 - Save Documentation

On August 14, 2014, the CNV issued Resolution No. 629 by amending rules about guard documentation.

In this regard, the Company advises that trade books, corporate books and accounting records are in the registered office.

The Company has sent documentation of certain age to AdeA provider - File Management SA to be stored, it is in Ruta 36, km 34.5, Florencio
Varela, Buenos Aires.



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34. Subsequent events

Negotiations for the sale of the shareholding PETROBRAS in the Company:

On January 20, 2016, Petroleo Brasileiro S.A.  PETROBRAS, announced that it had initiated negotiations for the sale of its
controlling share in the Company. On March 2, 2016, Petrobras made public that its executive board had approved to conduct exclusive negotiations with Pampa Energia S.A. for 30 days, which could be extended for another 30 days. On April 8,
2016, Petrobras informed that negotiations with Pampa Energia S.A. for the sale of its controlling share in the Company were to continue for 30 days.

In each of its press releases related to the potential sale of its controlling interest, PETROBRAS has stated that any such transactions
terms and conditions would be subject to approval by its executive board and its board of directors, as well as by the relevant regulatory entities.

Shareholders Meeting of Petrobras Argentina S.A.

On April 28, 2016, the Shareholders of Petrobras Argentina in their General Regular meeting: (a) approved (i) in accordance with
legal requirements, an increase of 810 in the reserve for future dividends, and the transfer to the legal reserve of 43 based on our results in 2014, and (ii) the mainteinance of the reserve for future investments (consisting of an
increase in the amount of 5,474 and a decrease in the amount of 5,474); and (b) delegated to the Board of Directors the determination of the actual dividend distribution date and amount. As a result of the foregoing, as of the date of this
Annual Report, the reserve for future dividends amounts to 1,969 and the reserve for future investments amounts to 5,730.

35. Expenses classified by
nature for the years ended December 31, 2015, 2014 and 2013



|                                              |  |       |       |   |       |  |        |       |  |  |        |   |  |                                   |       |   |                     |  |       |   |  |  |     | 
|--------------------------------------------- |  | ----- | ----- | - | ----- |  | ------ | ----- |  |  | ------ | - |  | --------------------------------- | ----- | - | ------------------- |  | ----- | - |  |  | --- | 
|                                              |  | 2013  |       |   | 2014  |  |        | 2015  | 
|Accounts                                      |  | Total |       |   | Total |  |        | Total |  |  | Costs  |   |  | Administrativeand sellingexpenses |       |   | Explorationexpenses | 
|Salaries and wages                            |  |       | 1,269 |   |       |  | 1,534  |       |  |  | 2,039  |   |  |                                   | 1,004 |   |                     |  | 1,035 |   |  |  |    | 
|Other benefits to personnel                   |  |       | 292   |   |       |  | 348    |       |  |  | 481    |   |  |                                   | 219   |   |                     |  | 262   |   |  |  |    | 
|Taxes, charges and contributions              |  |       | 365   |   |       |  | 516    |       |  |  | 589    |   |  |                                   | 53    |   |                     |  | 536   |   |  |  |    | 
|Fees and professional advisory                |  |       | 104   |   |       |  | 146    |       |  |  | 161    |   |  |                                   | 11    |   |                     |  | 150   |   |  |  |    | 
|Depreciation of property, plant and equipment |  |       | 2,194 |   |       |  | 2,632  |       |  |  | 2,630  |   |  |                                   | 2,549 |   |                     |  | 81    |   |  |  |    | 
|Oil and gas royalties                         |  |       | 1,128 |   |       |  | 1,560  |       |  |  | 1,689  |   |  |                                   | 1,689 |   |                     |  |      |   |  |  |    | 
|Spare parts and repairs                       |  |       | 640   |   |       |  | 727    |       |  |  | 690    |   |  |                                   | 569   |   |                     |  | 121   |   |  |  |    | 
|Geological and geophysical expenses           |  |       | 55    |   |       |  | 59     |       |  |  | 65     |   |  |                                   |      |   |                     |  |      |   |  |  | 65  | 
|Abandoned and non-productive well write-downs |  |       | 27    |   |       |  | 11     |       |  |  | 83     |   |  |                                   |      |   |                     |  |      |   |  |  | 83  | 
|Transportation and freights                   |  |       | 522   |   |       |  | 669    |       |  |  | 645    |   |  |                                   | 149   |   |                     |  | 496   |   |  |  |    | 
|Procurement of works and services             |  |       | 1,945 |   |       |  | 2,538  |       |  |  | 2,663  |   |  |                                   | 2,355 |   |                     |  | 308   |   |  |  |    | 
|Fuel, gas, energy and other                   |  |       | 129   |   |       |  | 143    |       |  |  | 120    |   |  |                                   | 104   |   |                     |  | 16    |   |  |  |    | 
|Other operating costs and consumptions        |  |       | 207   |   |       |  | 297    |       |  |  | 303    |   |  |                                   | 208   |   |                     |  | 95    |   |  |  |    | 
|Expense reimbursements                        |  |       | (200  | ) |       |  | (235   | )     |  |  | (234   | ) |  |                                   | (55   | ) |                     |  | (179  | ) |  |  |    | 
|                                              |  |       |       |   |       |  |        |       |  |  |        |   |  |                                   |       |   |                     |  |       |   |  |  |     | 
|Total 2015                                    |  |       |       |   |       |  |        |       |  |  | 11,924 |   |  |                                   | 8,855 |   |                     |  | 2,921 |   |  |  | 148 | 
|                                              |  |       |       |   |       |  |        |       |  |  |        |   |  |                                   |       |   |                     |  |       |   |  |  |     | 
|Total 2014                                    |  |       |       |   |       |  | 10,945 |       |  |  |        |   |  |                                   | 8,459 |   |                     |  | 2,416 |   |  |  | 70  | 
|                                              |  |       |       |   |       |  |        |       |  |  |        |   |  |                                   |       |   |                     |  |       |   |  |  |     | 
|Total 2013                                    |  |       | 8,677 |   |       |  |        |       |  |  |        |   |  |                                   | 6,798 |   |                     |  | 1,797 |   |  |  | 82  | 
|                                              |  |       |       |   |       |  |        |       |  |  |        |   |  |                                   |       |   |                     |  |       |   |  |  |     | 



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##### Table of Contents

GLOSSARY:



|           |  |                                                                                                                                                                                                         
|---------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|           | 
|AFIP       |  | Administración Federal de Ingresos Públicos Argentine Federal Public Revenues Administration                                                                                                           
|           | 
|ADS        |  | American Depositary Shares                                                                                                                                                                              
|           | 
|BCBA       |  | Buenos Aires Stock Exchange                                                                                                                                                                             
|           | 
|BCRA       |  | Banco Central de la República Argentina  Central Bank of Argentina                                                                                                                                     
|           | 
|BOE        |  | Barrel Oil Equivalent                                                                                                                                                                                   
|           | 
|BOL        |  | Bolivares                                                                                                                                                                                               
|           | 
|BOPS       |  | Bi-oriented polystyrene                                                                                                                                                                                 
|           | 
|CAMMESA    |  | Compañía Administradora del Mercado Mayorista Eléctrico S.A.                                                                                                                                            
|           | 
|CGN        |  | Compressed Natural Gas                                                                                                                                                                                  
|           | 
|CIESA      |  | Compañía de Inversiones de Energía S.A.                                                                                                                                                                 
|           | 
|CNDC       |  | Comisión Nacional de Defensa de la Competencia - Argentine Anti-Trust Authorities                                                                                                                       
|           | 
|CNV        |  | Comisión Nacional de Valores - Argentine Securities Commission                                                                                                                                          
|           | 
|CPCECABA   |  | Consejo Profesional de Ciencias Económicas de la Ciudad Autónoma de Buenos Aires - Professional Council in Economic Sciences of the City of Buenos Aires                                                
|           | 
|Distrilec  |  | Distrilec Inversora S.A.                                                                                                                                                                                
|           | 
|EDESUR     |  | Empresa Distribuidora Sur S.A. (Edesur S.A.)                                                                                                                                                            
|           | 
|EEUU       |  | Estados Unidos de Norteamérica - United States of America                                                                                                                                               
|           | 
|ENARGAS    |  | Ente Nacional Regulador del Gas - Argentine Gas Regulatory Agency                                                                                                                                       
|           | 
|ENARSA     |  | Energía Argentina S.A.                                                                                                                                                                                  
|           | 
|ENRE       |  | Ente Nacional Regulador de la Electricidad - Federal Power Regulation Authority                                                                                                                         
|           | 
|EPCA       |  | Enron Pipeline Company Argentina S.A.                                                                                                                                                                   
|           | 
|EU         |  | Euros                                                                                                                                                                                                   
|           | 
|FACPCE     |  | Federación Argentina de Consejos Profesionales de Ciencias Económicas - Argentine Federation of Professional Councils in Economic Sciences                                                              
|           | 
|FONINVEMEM |  | Fondo para las Inversiones Necesarias que permitan Incrementar la Oferta de Energía Eléctrica - Fund for the Investments Required to Increase the Electric Power Supply in the Electric Wholesale Market
|           | 
|GWh        |  | Giga Watts hour                                                                                                                                                                                         
|           | 
|HES        |  | Quality, Safety, Environmental and Health policies and guidelines                                                                                                                                       
|           | 
|IASB       |  | International Accounting Standards Board                                                                                                                                                                
|           | 
|IFO        |  | Intermediate Fuel Oil                                                                                                                                                                                   
|           | 
|IFRS       |  | International Financial Reporting Standards                                                                                                                                                             
|           | 
|IPACE      |  | Argentine Professional Institute for Quality and Excellence                                                                                                                                             
|           | 
|LNG        |  | Liquid Natural Gas                                                                                                                                                                                      
|           | 
|LPG        |  | Liquefied Petroleum Gas                                                                                                                                                                                 
|           | 
|LSC        |  | Ley de Sociedades Comerciales - Business Associations Law                                                                                                                                               
|           | 
|Mbbl       |  | Thousands of barrels                                                                                                                                                                                    
|           | 
|MEM        |  | Wholesale Electricity Market                                                                                                                                                                            



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##### Table of Contents

|                    |  |                                                                                                                                 
|------------------- |  | --------------------------------------------------------------------------------------------------------------------------------
|                    | 
|MEP                 |  | Ministerio de Energía y Petróleo de Venezuela - Venezuelan Energy and Oil Ministry                                              
|                    | 
|MMcf                |  | Millions of cubic meters                                                                                                        
|                    | 
|Mcf                 |  | Millions of cubic foot                                                                                                          
|                    | 
|MOA                 |  | Memorandum of Agreement                                                                                                         
|                    | 
|MPFIPyS             |  | Ministerio de Planificación Federal, Inversión Pública y Servicios - Federal Planning, Public Investment and Services Ministry  
|                    | 
|MW                  |  | Mega Watts                                                                                                                      
|                    | 
|MWh                 |  | Mega Watts Hour                                                                                                                 
|                    | 
|m3                  |  | Cubic Meters                                                                                                                    
|                    | 
|NRV                 |  | Net Realizable Value                                                                                                            
|                    | 
|NYSE                |  | New York Stock Exchange                                                                                                         
|                    | 
|OCI                 |  | Other Comprehensive Income                                                                                                      
|                    | 
|OCP                 |  | Oleoducto de Crudos Pesados Ltd.                                                                                                
|                    | 
|OHSAS               |  | Occupational Health and Safety Assessment Series                                                                                
|                    | 
|ONG                 |  | Nongovernmental Organization                                                                                                    
|                    | 
|OPEC                |  | Organization of the Petroleum Exporting Countries                                                                               
|                    | 
|PDVSA               |  | Petróleos de Venezuela S.A.                                                                                                     
|                    | 
|PEDASA              |  | Petrobras Electricidad de Argentina S.A.                                                                                        
|                    | 
|PELSA               |  | Petrolera Entre Lomas S.A.                                                                                                      
|                    | 
|PEN                 |  | Poder Ejecutivo Nacional - Executive Branch of Government                                                                       
|                    | 
|PEPSA               |  | Petrobras Energía Participaciones S.A.                                                                                          
|                    | 
|PES                 |  | Argentine Pesos                                                                                                                 
|                    | 
|Petróleo Brasileiro |  | Petróleo Brasileiro S.A.  PETROBRAS.                                                                                           
|                    | 
|PFB                 |  | Petrobras Finance Bermuda                                                                                                       
|                    | 
|PIB BV              |  | Petrobras Internacional Braspetro BV                                                                                            
|                    | 
|PVIE                |  | Petrobras Valores Internacional de España S.L.                                                                                  
|                    | 
|Rls                 |  | Reales                                                                                                                          
|                    | 
|RT                  |  | Technical Resolution                                                                                                            
|                    | 
|RTI                 |  | Revisión Tarifaria Integral - Complete Rate Review                                                                              
|                    | 
|SCyCG               |  | Subsecretaría de Coordinación y Control de Gestión - Undersecretariat of Coordination and Control of Government Affairs         
|                    | 
|SE                  |  | Secretaría de Energía                                                                                                           
|                    | 
|SEC                 |  | Security and Exchange Commission                                                                                                
|                    | 
|SFAS                |  | Statement of Financial Accounting Standard                                                                                      
|                    | 
|TGS                 |  | Transportadora de Gas del Sur S.A.                                                                                              
|                    | 
|Tn                  |  | Tonnes                                                                                                                          
|                    | 
|UNIREN              |  | Unidad de Renegociación y Análisis de Contratos de Servicios Públicos - Public Service Agreement Renegotiation and Analysis Unit



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##### Table of Contents

|      |  |                                             
|----- |  | --------------------------------------------
|      | 
|USD   |  | United States Dollars                       
|      | 
|WACC  |  | Weighted Average Cost of Capital            
|      | 
|WTI   |  | West Texas Intermediate                     
|      | 
|WTS   |  | West Texas Sour                             
|      | 
|YPFB  |  | Yacimientos Petrolíferos Fiscales Bolivianos
|      | 
|$ BOL |  | Bolivian Pesos                              



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##### Table of Contents

Oil and Gas Supplementary Disclosures (Unaudited)

In December 2009, the Company adopted the Modernization of Oil and Gas Reporting rules, which were issued by the Securities and Exchange
Commission (SEC) of the United States of America at the end of 2008.

The following information for the oil and gas producing
activities has been prepared in accordance with the methodology prescribed by ASC 932 of the FASB Accounting Standards Codification (ASC) relating to Extractive Activities  Oil and Gas (formerly SFAS no. 69 Disclosures about Oil and Gas
Producing Activities) and includes the Companys and its subsidiaries oil and gas production activities as well as the equity shares in its associates valued by the equity method. The Company has oil and gas properties in Argentina and
other countries in Latin America.

Amounts are stated in millions of pesos.

Capitalized costs

The following table presents the capitalized costs as of December 31, 2015, 2014 and 2013, for proved and unproved oil and gas properties,
and the related accumulated depreciation and allowances, which reduce the value of assets.



|                                                                         |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|------------------------------------------------------------------------ |  | --------------------------------------- | --------------------------------------- | - | ------------------------ |  | ------------------------ | ----- |  |  | --------- | - |  | ----- | --------- | - |  |  | ------ | -
|                                                                         |  | Consolidated Companies                  |                                         |   | Equity Method Investment | 
|                                                                         |  | Argentina                               |                                         |   | Rest ofLatin-America     |  |                          | Total |  |  | Venezuela |   |  | Total |          
|                                                                         |  | (Stated in millions of Argentine pesos) |                                        
|December 31, 2015                                                        |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|Proved properties:                                                       |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|Equipment, camps and other facilities                                    |  |                                         | 3,470                                   |   |                          |  | 294                      |       |  |  | 3,764     |   |  |       |          |   |  |  |       |  
|Mining properties and wells                                              |  |                                         | 17,334                                  |   |                          |  | 1,330                    |       |  |  | 18,664    |   |  |       | 6,631     |   |  |  | 6,631  |  
|Unproved properties                                                      |  |                                         | 269                                     |   |                          |  |                         |       |  |  | 269       |   |  |       |          |   |  |  |       |  
|                                                                         |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|Total capitalized costs                                                  |  |                                         | 21,073                                  |   |                          |  | 1,624                    |       |  |  | 22,697    |   |  |       | 6,631     |   |  |  | 6,631  |  
|                                                                         |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|Accumulated depreciation and allowances which reduce the value of assets |  |                                         | (9,974                                  | ) |                          |  | (1,411                   | )     |  |  | (11,385   | ) |  |       | (2,618    | ) |  |  | (2,618 | )
|                                                                         |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|Total net capitalized costs                                              |  |                                         | 11,099                                  |   |                          |  | 213                      |       |  |  | 11,312    |   |  |       | 4,013     |   |  |  | 4,013  |  
|                                                                         |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|                                                                         |  |                                        
|                                                                         |  |                                         | Consolidated Companies                  |   |                          |  | Equity Method Investment |      
|                                                                         |  |                                         | Argentina                               |   |                          |  | Rest ofLatin-America     |       |  |  | Total     |   |  |       | Venezuela |   |  |  | Total  |  
|                                                                         |  |                                         | (Stated in millions of Argentine pesos) |  
|December 31, 2014                                                        |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|Proved properties:                                                       |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|Equipment, camps and other facilities                                    |  |                                         | 5,040                                   |   |                          |  | 194                      |       |  |  | 5,234     |   |  |       |          |   |  |  |       |  
|Mining properties and wells                                              |  |                                         | 15,078                                  |   |                          |  | 1,101                    |       |  |  | 16,179    |   |  |       | 3,570     |   |  |  | 3,570  |  
|Unproved properties                                                      |  |                                         | 617                                     |   |                          |  |                         |       |  |  | 617       |   |  |       |          |   |  |  |       |  
|                                                                         |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|Total capitalized costs                                                  |  |                                         | 20,735                                  |   |                          |  | 1,295                    |       |  |  | 22,030    |   |  |       | 3,570     |   |  |  | 3,570  |  
|                                                                         |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|Accumulated depreciation and allowances which reduce the value of assets |  |                                         | (12,080                                 | ) |                          |  | (968                     | )     |  |  | (13,048   | ) |  |       | (1,711    | ) |  |  | (1,711 | )
|                                                                         |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  
|Total net capitalized costs                                              |  |                                         | 8,655                                   |   |                          |  | 327                      |       |  |  | 8,982     |   |  |       | 1,859     |   |  |  | 1,859  |  
|                                                                         |  |                                         |                                         |   |                          |  |                          |       |  |  |           |   |  |       |           |   |  |  |        |  



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##### Table of Contents

|                                                                         |  |                        |                                         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|------------------------------------------------------------------------ |  | ---------------------- | --------------------------------------- | - | ------------------------ |  | ----- | ----- |  |  | --------- | - |  | ----- | ------ | - |  |  | ------ | -
|                                                                         |  | Consolidated Companies |                                         |   | Equity Method Investment | 
|                                                                         |  | Argentina              |                                         |   | Rest ofLatin-America     |  |       | Total |  |  | Venezuela |   |  | Total |       
|                                                                         |  |                        | (Stated in millions of Argentine pesos) |  
|December 31, 2013                                                        |  |                        |                                         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Proved properties:                                                       |  |                        |                                         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Equipment, camps and other facilities                                    |  |                        | 4,818                                   |   |                          |  | 85    |       |  |  | 4,903     |   |  |       |       |   |  |  |       |  
|Mining properties and wells                                              |  |                        | 13,097                                  |   |                          |  | 1,056 |       |  |  | 14,153    |   |  |       | 3,730  |   |  |  | 3,730  |  
|Unproved properties                                                      |  |                        | 298                                     |   |                          |  |      |       |  |  | 298       |   |  |       |       |   |  |  |       |  
|                                                                         |  |                        |                                         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Total capitalized costs                                                  |  |                        | 18,213                                  |   |                          |  | 1,141 |       |  |  | 19,354    |   |  |       | 3,730  |   |  |  | 3,730  |  
|                                                                         |  |                        |                                         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Accumulated depreciation and allowances which reduce the value of assets |  |                        | (11,612                                 | ) |                          |  | (637  | )     |  |  | (12,249   | ) |  |       | (1,181 | ) |  |  | (1,181 | )
|                                                                         |  |                        |                                         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Total net capitalized costs                                              |  |                        | 6,601                                   |   |                          |  | 504   |       |  |  | 7,105     |   |  |       | 2,549  |   |  |  | 2,549  |  
|                                                                         |  |                        |                                         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  

Costs incurred

The following table presents those costs capitalized as well as expensed that were incurred during each of the years ended as of
December 31, 2015, 2014 and 2013. The acquisition of properties includes the cost of acquisition of proved or unproved oil and gas properties. Exploration costs include geological and geophysical costs, costs necessary for retaining undeveloped
properties, and drilling costs and exploratory well equipment. Development costs include drilling costs and equipment for developmental wells, costs incurred in improved recovery, the construction of facilities for extraction, treatment and storage
of hydrocarbons and all necessary costs to maintain facilities for the existing developed reserves.



|                           |  |           |                                         |  |                       |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|-------------------------- |  | --------- | --------------------------------------- |  | --------------------- |  | ----------------------- | ----- |  |  | --------- |  |  | ----- | --- |  |  |  | --- | 
|                           |  |           | Consolidated companies                  |  |                       |  | Equity MethodInvestment |      
|                           |  | Argentina |                                         |  | Rest of Latin-America |  |                         | Total |  |  | Venezuela |  |  | Total |    
|                           |  |           | (Stated in millions of Argentine pesos) | 
|At December 31, 2015       |  |           |                                         |  |                       |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|Acquisition of properties: |  |           |                                         |  |                       |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|- Proved                   |  |           |                                        |  |                       |  |                        |       |  |  |          |  |  |       |    |  |  |  |    | 
|- Unproved                 |  |           |                                        |  |                       |  |                        |       |  |  |          |  |  |       |    |  |  |  |    | 
|Exploration costs          |  |           | 346                                     |  |                       |  |                        |       |  |  | 346       |  |  |       |    |  |  |  |    | 
|Development costs          |  |           | 4,287                                   |  |                       |  | 3                       |       |  |  | 4,290     |  |  |       | 725 |  |  |  | 725 | 
|                           |  |           |                                         |  |                       |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|Total costs incurred       |  |           | 4,633                                   |  |                       |  | 3                       |       |  |  | 4,636     |  |  |       | 725 |  |  |  | 725 | 
|                           |  |           |                                         |  |                       |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 



S-2



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##### Table of Contents

|                           |  |                        |                                         |  |                         |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|-------------------------- |  | ---------------------- | --------------------------------------- |  | ----------------------- |  | ----------------------- | ----- |  |  | --------- |  |  | ----- | --- |  |  |  | --- | 
|                           |  | Consolidated companies |                                         |  | Equity MethodInvestment | 
|                           |  | Argentina              |                                         |  | Rest of Latin-America   |  |                         | Total |  |  | Venezuela |  |  | Total |    
|                           |  |                        | (Stated in millions of Argentine pesos) | 
|At December 31, 2014       |  |                        |                                         |  |                         |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|Acquisition of properties: |  |                        |                                         |  |                         |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|- Proved                   |  |                        |                                        |  |                         |  |                        |       |  |  |          |  |  |       |    |  |  |  |    | 
|- Unproved                 |  |                        | 21                                      |  |                         |  |                        |       |  |  | 21        |  |  |       |    |  |  |  |    | 
|Exploration costs          |  |                        | 386                                     |  |                         |  |                        |       |  |  | 386       |  |  |       |    |  |  |  |    | 
|Development costs          |  |                        | 3,810                                   |  |                         |  | 31                      |       |  |  | 3,841     |  |  |       | 539 |  |  |  | 539 | 
|                           |  |                        |                                         |  |                         |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|Total costs incurred       |  |                        | 4,217                                   |  |                         |  | 31                      |       |  |  | 4,248     |  |  |       | 539 |  |  |  | 539 | 
|                           |  |                        |                                         |  |                         |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|                           |  |                       
|                           |  |                        | Consolidated companies                  |  |                         |  | Equity MethodInvestment |      
|                           |  | Argentina              |                                         |  | Rest of Latin-America   |  |                         | Total |  |  | Venezuela |  |  | Total |    
|                           |  |                        | (Stated in millions of Argentine pesos) | 
|At December 31, 2013       |  |                        |                                         |  |                         |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|Acquisition of properties: |  |                        |                                         |  |                         |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|- Proved                   |  |                        |                                        |  |                         |  |                        |       |  |  |          |  |  |       |    |  |  |  |    | 
|- Unproved                 |  |                        | 59                                      |  |                         |  |                        |       |  |  | 59        |  |  |       |    |  |  |  |    | 
|Exploration costs          |  |                        | 315                                     |  |                         |  |                        |       |  |  | 315       |  |  |       |    |  |  |  |    | 
|Development costs          |  |                        | 2,087                                   |  |                         |  | 31                      |       |  |  | 2,118     |  |  |       | 240 |  |  |  | 240 | 
|                           |  |                        |                                         |  |                         |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 
|Total costs incurred       |  |                        | 2,461                                   |  |                         |  | 31                      |       |  |  | 2,492     |  |  |       | 240 |  |  |  | 240 | 
|                           |  |                        |                                         |  |                         |  |                         |       |  |  |           |  |  |       |     |  |  |  |     | 

Results of operations

The breakdown of results of the operations shown below summarizes revenues and expenses directly associated with oil and gas-producing
activities for the years ended December 31, 2015, 2014 and 2013. These activities are a part of the Oil and Gas Exploration and Production segment. This breakdown does not include any allocation of financial costs or expenses from Corporate and
therefore it is not necessarily an indicator of the contribution in operations for oil and gas producing activities to the net income of the Company. Income tax for the years presented was calculated utilizing the deferred income tax criteria.



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|                                                                                      |  |                        |                                         |   |                         |  |      |       |  |  |           |   |  |       |        |   |  |  |        |  
|------------------------------------------------------------------------------------- |  | ---------------------- | --------------------------------------- | - | ----------------------- |  | ---- | ----- |  |  | --------- | - |  | ----- | ------ | - |  |  | ------ | -
|                                                                                      |  | Consolidated companies |                                         |   | Equity MethodInvestment | 
|                                                                                      |  | Argentina              |                                         |   | Rest ofLatin-America    |  |      | Total |  |  | Venezuela |   |  | Total |       
|                                                                                      |  |                        | (Stated in millions of Argentine pesos) |  
|At December 31, 2015                                                                  |  |                        |                                         |   |                         |  |      |       |  |  |           |   |  |       |        |   |  |  |        |  
|Net sales:                                                                            |  |                        |                                         |   |                         |  |      |       |  |  |           |   |  |       |        |   |  |  |        |  
|- to third parties                                                                    |  |                        | 1,348                                   |   |                         |  | 118  |       |  |  | 1,466     |   |  |       | 743    |   |  |  | 743    |  
|- transfers to other operations                                                       |  |                        | 8,983                                   |   |                         |  |     |       |  |  | 8,983     |   |  |       |       |   |  |  |       |  
|                                                                                      |  |                        |                                         |   |                         |  |      |       |  |  |           |   |  |       |        |   |  |  |        |  
|Total net sales                                                                       |  |                        | 10,331                                  |   |                         |  | 118  |       |  |  | 10,449    |   |  |       | 743    |   |  |  | 743    |  
|Production costs:                                                                     |  |                        |                                         |   |                         |  |      |       |  |  |           |   |  |       |        |   |  |  |        |  
|- Operating costs                                                                     |  |                        | (4,116                                  | ) |                         |  | (92  | )     |  |  | (4,208    | ) |  |       | (1,518 | ) |  |  | (1,518 | )
|- Royalties and other                                                                 |  |                        | (950                                    | ) |                         |  | (17  | )     |  |  | (967      | ) |  |       | (237   | ) |  |  | (237   | )
|                                                                                      |  |                        |                                         |   |                         |  |      |       |  |  |           |   |  |       |        |   |  |  |        |  
|Total production costs                                                                |  |                        | (5,066                                  | ) |                         |  | (109 | )     |  |  | (5,175    | ) |  |       | (1,755 | ) |  |  | (1,755 | )
|Exploration costs                                                                     |  |                        | (148                                    | ) |                         |  |     |       |  |  | (148      | ) |  |       |       |   |  |  |       |  
|Depreciation, depletion, amortization and allowances which reduce the value of assets |  |                        | (2,273                                  | ) |                         |  | (77  | )     |  |  | (2,350    | ) |  |       | (1,414 | ) |  |  | (1,414 | )
|                                                                                      |  |                        |                                         |   |                         |  |      |       |  |  |           |   |  |       |        |   |  |  |        |  
|Results of operations before income tax                                               |  |                        | 2,844                                   |   |                         |  | (68  | )     |  |  | 2,776     |   |  |       | (2,426 | ) |  |  | (2,426 | )
|Income tax                                                                            |  |                        | (995                                    | ) |                         |  |     |       |  |  | (995      | ) |  |       | 429    |   |  |  | 429    |  
|                                                                                      |  |                        |                                         |   |                         |  |      |       |  |  |           |   |  |       |        |   |  |  |        |  
|Total Results of oil and gas operations                                               |  |                        | 1,849                                   |   |                         |  | (68  | )     |  |  | 1,781     |   |  |       | (1,997 | ) |  |  | (1,997 | )
|                                                                                      |  |                        |                                         |   |                         |  |      |       |  |  |           |   |  |       |        |   |  |  |        |  



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##### Table of Contents

|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|------------------------------------------------------------------------------------- |  | ---------------------- | --------------------------------------- | - | ----------------------- |  | --- | ----- |  |  | --------- | - |  | ----- | ------ | - |  |  | ------ | -
|                                                                                      |  | Consolidated companies |                                         |   | Equity MethodInvestment | 
|                                                                                      |  | Argentina              |                                         |   | Rest ofLatin-America    |  |     | Total |  |  | Venezuela |   |  | Total |       
|                                                                                      |  |                        | (Stated in millions of Argentine pesos) |  
|At December 31, 2014                                                                  |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|Net sales:                                                                            |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|- to third parties                                                                    |  |                        | 1,823                                   |   |                         |  | 192 |       |  |  | 2,015     |   |  |       | 1,251  |   |  |  | 1,251  |  
|- transfers to other operations                                                       |  |                        | 8,538                                   |   |                         |  |    |       |  |  | 8,538     |   |  |       |       |   |  |  |       |  
|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|Total net sales                                                                       |  |                        | 10,361                                  |   |                         |  | 192 |       |  |  | 10,553    |   |  |       | 1,251  |   |  |  | 1,251  |  
|Production costs:                                                                     |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|- Operating costs                                                                     |  |                        | (3,007                                  | ) |                         |  | (81 | )     |  |  | (3,088    | ) |  |       | (514   | ) |  |  | (514   | )
|- Royalties and other                                                                 |  |                        | (1,875                                  | ) |                         |  | (14 | )     |  |  | (1,889    | ) |  |       | (374   | ) |  |  | (374   | )
|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|Total production costs                                                                |  |                        | (4,882                                  | ) |                         |  | (95 | )     |  |  | (4,977    | ) |  |       | (888   | ) |  |  | (888   | )
|Exploration costs                                                                     |  |                        | (70                                     | ) |                         |  |    |       |  |  | (70       | ) |  |       |       |   |  |  |       |  
|Depreciation, depletion, amortization and allowances which reduce the value of assets |  |                        | (2,364                                  | ) |                         |  | (31 | )     |  |  | (2,395    | ) |  |       | (1,541 | ) |  |  | (1,541 | )
|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|Results of operations before income tax                                               |  |                        | 3,045                                   |   |                         |  | 66  |       |  |  | 3,111     |   |  |       | (1,178 | ) |  |  | (1,178 | )
|Income tax                                                                            |  |                        | (1,066                                  | ) |                         |  | (17 | )     |  |  | (1,083    | ) |  |       | 339    |   |  |  | 339    |  
|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|Total Results of oil and gas operations                                               |  |                        | 1,979                                   |   |                         |  | 49  |       |  |  | 2,028     |   |  |       | (839   | ) |  |  | (839   | )
|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  



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##### Table of Contents

|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|------------------------------------------------------------------------------------- |  | ---------------------- | --------------------------------------- | - | ----------------------- |  | --- | ----- |  |  | --------- | - |  | ----- | ----- | - |  |  | ----- | -
|                                                                                      |  | Consolidated companies |                                         |   | Equity MethodInvestment | 
|                                                                                      |  | Argentina              |                                         |   | Rest ofLatin-America    |  |     | Total |  |  | Venezuela |   |  | Total |      
|                                                                                      |  |                        | (Stated in millions of Argentine pesos) |  
|At December 31, 2013                                                                  |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|Net sales:                                                                            |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|- to third parties                                                                    |  |                        | 1,625                                   |   |                         |  | 189 |       |  |  | 1,814     |   |  |       | 1,172 |   |  |  | 1,172 |  
|- transfers to other operations                                                       |  |                        | 6,024                                   |   |                         |  |    |       |  |  | 6,024     |   |  |       |      |   |  |  |      |  
|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|Total net sales                                                                       |  |                        | 7,649                                   |   |                         |  | 189 |       |  |  | 7,838     |   |  |       | 1,172 |   |  |  | 1,172 |  
|Production costs:                                                                     |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|- Operating costs                                                                     |  |                        | (2,525                                  | ) |                         |  | (77 | )     |  |  | (2,602    | ) |  |       | (306  | ) |  |  | (306  | )
|- Royalties and other                                                                 |  |                        | (1,169                                  | ) |                         |  | (9  | )     |  |  | (1,178    | ) |  |       | (293  | ) |  |  | (293  | )
|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|Total production costs                                                                |  |                        | (3,694                                  | ) |                         |  | (86 | )     |  |  | (3,780    | ) |  |       | (599  | ) |  |  | (599  | )
|Exploration costs                                                                     |  |                        | (82                                     | ) |                         |  |    |       |  |  | (82       | ) |  |       |      |   |  |  |      |  
|Depreciation, depletion, amortization and allowances which reduce the value of assets |  |                        | (1,934                                  | ) |                         |  | (27 | )     |  |  | (1,961    | ) |  |       | (985  | ) |  |  | (985  | )
|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|Results of operations before income tax                                               |  |                        | 1,939                                   |   |                         |  | 76  |       |  |  | 2,015     |   |  |       | (412  | ) |  |  | (412  | )
|Income tax                                                                            |  |                        | (679                                    | ) |                         |  | (20 | )     |  |  | (699      | ) |  |       | 59    |   |  |  | 59    |  
|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|Total Results of oil and gas operations                                               |  |                        | 1,260                                   |   |                         |  | 56  |       |  |  | 1,316     |   |  |       | (353  | ) |  |  | (353  | )
|                                                                                      |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  

Estimated oil and gas reserves

Proved reserves represent estimated quantities of oil (including crude oil, condensate and natural gas liquids) and natural gas, which
available geological and engineering data demonstrates with reasonable certainty to be recoverable in the future from known reservoirs under existing economic and operating conditions. Proved developed reserves are proved reserves that can
reasonably be expected to be recovered through existing wells with existing equipment and operating methods. The choice of method or combination of methods employed in the analysis of each reservoir was determined by the stage of development,
quality and reliability of basic data, and production history.

The Company believes that its estimates of remaining proved recoverable
oil and gas reserve volumes are reasonable and such estimates have been prepared in accordance with the SEC Modernization of Oil and Gas Reporting rules, which were issued by the SEC at the end of 2008.

The Company estimates its reserves at least once a year. The Companys reserves estimation as of December 31, 2015, 2014 and 2013
was evaluated by DeGolyer and MacNaughton. The technical revision covered approximately 81%, 80% and 73% respectively, of the Companys estimated reserves. DeGolyer and MacNaughton evaluated the proved oil and natural gas reserve estimates in
accordance with Rule 4-10 of Regulation S-X, promulgated by the SEC, and in accordance with the oil and gas reserves disclosure provisions of ASC 932 of the FASB Accounting Standards Codification (ASC) relating to Extractive Activities-Oil and Gas
(formerly SFAS no. 69 Disclosures about Oil and Gas Producing Activities). We provided all information required during the course of the evaluation process to the auditors satisfaction.



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Proved reserves are estimated by the Companys reservoir engineers. Reserves engineering is
a subjective process of estimation of hydrocarbon accumulation, which cannot be accurately measured, and the reserve estimation depends on the quality of available information and the interpretation and judgment of the engineers and geologists.
Therefore, the reserves estimations, as well as future production profiles, are often different than the quantities of hydrocarbons which are finally recovered. The accuracy of such estimations depends, in general, on the assumptions on which they
are based.

The following table sets forth the estimated proved reserves of oil (includes crude oil, condensate and natural gas liquids)
and natural gas as of December 31, 2015, 2014 and 2013:



|                                            |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|------------------------------------------- |  | -------------------------------------------------------------------- | ------- | - | ------------------------------------- |  | ------ | ----- | --------- |  | --------------------- | --------- |  | ----------------------- | ------- | - | ----- |  | ------- | - |  |  | ------- | -
|                                            |  | CRUDE OIL, CONDENSATE ANDNATURAL GAS LIQUIDS IN THOUSANDS OF BARRELS |         |   | NATURAL GAS IN MILLIONS OF CUBIC FEET | 
|                                            |  | Consolidatedcompanies                                                |         |   | Equity MethodInvestment               |  |        | Total |           |  | Consolidatedcompanies |           |  | Equity MethodInvestment |         |   | Total | 
|Proved reserves (developed and undeveloped) |  | Argentina                                                            |         |   | Venezuela                             |  |        |       | Argentina |  |                       | Venezuela |  |                        
|Reserves as of December 31, 2012 (*)        |  |                                                                      | 64,245  |   |                                       |  | 24,530 |       |           |  | 88,775                |           |  |                         | 712,466 |   |       |  | 46,455  |   |  |  | 758,921 |  
|                                            |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|Increase (Decrease) originated in:          |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|Revisions of previous estimates             |  |                                                                      | 67      |   |                                       |  | (1,086 | )     |           |  | (1,019                | )         |  |                         | 65,774  |   |       |  | (4,362  | ) |  |  | 61,412  |  
|Improved recovery                           |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|Extensions and discoveries                  |  |                                                                      |        |   |                                       |  |       |       |           |  |                      |           |  |                         |        |   |       |  |        |   |  |  |        |  
|Purchase of proved reserves in place        |  |                                                                      | 13,204  |   |                                       |  |       |       |           |  | 13,204                |           |  |                         | 9,260   |   |       |  |        |   |  |  | 9,260   |  
|Sale of proved reserves in place            |  |                                                                      |        |   |                                       |  |       |       |           |  |                      |           |  |                         |        |   |       |  |        |   |  |  |        |  
|Years production                           |  |                                                                      | (16,675 | ) |                                       |  | (2,020 | )     |           |  | (18,695               | )         |  |                         | (92,213 | ) |       |  | (620    | ) |  |  | (92,833 | )
|                                            |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|Reserves as of December 31, 2013 (*)        |  |                                                                      | 60,841  |   |                                       |  | 21,424 |       |           |  | 82,265                |           |  |                         | 695,287 |   |       |  | 41,473  |   |  |  | 736,760 |  
|                                            |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|Increase (Decrease) originated in:          |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|Revisions of previous estimates             |  |                                                                      | (3,053  | ) |                                       |  | (1,766 | )     |           |  | (4,819                | )         |  |                         | 23,424  |   |       |  | (13,277 | ) |  |  | 10,147  |  
|Improved recovery                           |  |                                                                      | 520     |   |                                       |  |       |       |           |  | 520                   |           |  |                         | 10,817  |   |       |  |        |   |  |  | 10,817  |  
|Extensions and discoveries                  |  |                                                                      | 2,955   |   |                                       |  |       |       |           |  | 2,955                 |           |  |                         | 42,076  |   |       |  |        |   |  |  | 42,076  |  
|Purchase of proved reserves in place        |  |                                                                      | 22,713  |   |                                       |  |       |       |           |  | 22,713                |           |  |                         | 46,975  |   |       |  |        |   |  |  | 46,975  |  
|Sale of proved reserves in place            |  |                                                                      | (3,404  | ) |                                       |  |       |       |           |  | (3,404                | )         |  |                         |        |   |       |  |        |   |  |  |        |  
|Years production                           |  |                                                                      | (13,957 | ) |                                       |  | (1,691 | )     |           |  | (15,648               | )         |  |                         | (89,858 | ) |       |  | (591    | ) |  |  | (90,449 | )
|                                            |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|Reserves as of December 31, 2014 (*)        |  |                                                                      | 66,615  |   |                                       |  | 17,967 |       |           |  | 84,582                |           |  |                         | 728,721 |   |       |  | 27,605  |   |  |  | 756,326 |  
|                                            |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|Increase (Decrease) originated in:          |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|Revisions of previous estimates             |  |                                                                      | (3,683  | ) |                                       |  | (2,169 | )     |           |  | (5,852                | )         |  |                         | 18,910  |   |       |  | (10,414 | ) |  |  | 8,496   |  
|Improved recovery                           |  |                                                                      | 710     |   |                                       |  |       |       |           |  | 710                   |           |  |                         | 27,701  |   |       |  |        |   |  |  | 27,701  |  
|Extensions and discoveries                  |  |                                                                      | 4,800   |   |                                       |  |       |       |           |  | 4,800                 |           |  |                         | 74,620  |   |       |  |        |   |  |  | 74,620  |  
|Purchase of proved reserves in place        |  |                                                                      |        |   |                                       |  |       |       |           |  |                      |           |  |                         |        |   |       |  |        |   |  |  |        |  
|Sale of proved reserves in place            |  |                                                                      | (4,498  | ) |                                       |  |       |       |           |  | (4,498                | )         |  |                         | (90,157 | ) |       |  |        |   |  |  | (90,157 | )
|Years production                           |  |                                                                      | (11,671 | ) |                                       |  | (1,226 | )     |           |  | (12,897               | )         |  |                         | (79,249 | ) |       |  | (313    | ) |  |  | (79,562 | )
|                                            |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  
|Reserves as of December 31, 2015 (*)        |  |                                                                      | 52,273  |   |                                       |  | 14,572 |       |           |  | 66,845                |           |  |                         | 680,546 |   |       |  | 16,878  |   |  |  | 697,424 |  
|                                            |  |                                                                      |         |   |                                       |  |        |       |           |  |                       |           |  |                         |         |   |       |  |         |   |  |  |         |  

Bolivian proved reserves were not classified as such in 2015, 2014 and 2013 due to changes introduced to the
Bolivian Constitution, which restrict the disclosure of estimated reserves for properties under its authority.

The estimated reserves
were subjected to economic evaluation to determine their economic limits. Such estimated reserves in Argentina for years ended in 2015, 2014 and 2013 are stated prior to the payment of any royalties as they have the same impact as taxes on
production and are not paid in kind, and therefore are treated as operating costs.

In Venezuela, as of December 31, 2015, 2014 and
2013, estimated reserves were calculated on the basis of the contractual structure in force, and are stated before royalties and are computed by multiplying our ownership in each mixed company by the proved reserve volumes of the relevant mixed
company.



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##### Table of Contents

|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|---------------------------------------------- |  | ------------------------------------------ | ------ |  | ------------------------ |  | ------- | ------------------------------------------ |  |  | ------------------------ |  |  | ------------------------------------------ | ------- |  | ------------------------ |  | ------ |  |  |  | ------- | 
|                                               |  | 2015                                       |        |  | 2014                     |  |         | 2013                                       | 
|                                               |  | Crude Oil,Condensateand NaturalGas Liquids |        |  | Natural Gas              |  |         | Crude Oil,Condensateand NaturalGas Liquids |  |  | Natural Gas              |  |  | Crude Oil,Condensateand NaturalGas Liquids |         |  | Natural Gas              | 
|                                               |  | In thousands ofbarrels                     |        |  | In millions ofcubic feet |  |         | In thousands ofbarrels                     |  |  | In millions ofcubic feet |  |  | In thousands ofbarrels                     |         |  | In millions ofcubic feet | 
|Net proved developed reserves:                 |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Consolidated entities                          |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Argentina                                      |  |                                            | 39,748 |  |                          |  | 366,331 |                                            |  |  | 51,986                   |  |  |                                            | 356,228 |  |                          |  | 43,802 |  |  |  | 320,642 | 
|Rest of Latin-America                          |  |                                            |       |  |                          |  |        |                                            |  |  |                         |  |  |                                            |        |  |                          |  |       |  |  |  |        | 
|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|                                               |  |                                            | 39,748 |  |                          |  | 366,331 |                                            |  |  | 51,986                   |  |  |                                            | 356,228 |  |                          |  | 43,802 |  |  |  | 320,642 | 
|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Equity method investees                        |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Argentina                                      |  |                                            |       |  |                          |  |        |                                            |  |  |                         |  |  |                                            |        |  |                          |  |       |  |  |  |        | 
|Venezuela                                      |  |                                            | 6,623  |  |                          |  | 7,955   |                                            |  |  | 9,407                    |  |  |                                            | 15,738  |  |                          |  | 12,448 |  |  |  | 14,848  | 
|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|                                               |  |                                            | 6,623  |  |                          |  | 7,955   |                                            |  |  | 9,407                    |  |  |                                            | 15,738  |  |                          |  | 12,448 |  |  |  | 14,848  | 
|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Total consolidated and equity method investees |  |                                            | 46,371 |  |                          |  | 374,286 |                                            |  |  | 61,393                   |  |  |                                            | 371,966 |  |                          |  | 56,250 |  |  |  | 335,490 | 
|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Net proved undeveloped reserves:               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Consolidated entities                          |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Argentina                                      |  |                                            | 12,525 |  |                          |  | 314,215 |                                            |  |  | 14,629                   |  |  |                                            | 372,493 |  |                          |  | 17,039 |  |  |  | 374,645 | 
|Rest of Latin-America                          |  |                                            |       |  |                          |  |        |                                            |  |  |                         |  |  |                                            |        |  |                          |  |       |  |  |  |        | 
|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|                                               |  |                                            | 12,525 |  |                          |  | 314,215 |                                            |  |  | 14,629                   |  |  |                                            | 372,493 |  |                          |  | 17,039 |  |  |  | 374,645 | 
|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Equity method investees                        |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Argentina                                      |  |                                            |       |  |                          |  |        |                                            |  |  |                         |  |  |                                            |        |  |                          |  |       |  |  |  |        | 
|Venezuela                                      |  |                                            | 7,949  |  |                          |  | 8,923   |                                            |  |  | 8,560                    |  |  |                                            | 11,867  |  |                          |  | 8,976  |  |  |  | 26,605  | 
|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|                                               |  |                                            | 7,949  |  |                          |  | 8,923   |                                            |  |  | 8,560                    |  |  |                                            | 11,867  |  |                          |  | 8,976  |  |  |  | 26,605  | 
|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 
|Total consolidated and equity method investees |  |                                            | 20,474 |  |                          |  | 323,138 |                                            |  |  | 23,189                   |  |  |                                            | 384,360 |  |                          |  | 26,015 |  |  |  | 401,250 | 
|                                               |  |                                            |        |  |                          |  |         |                                            |  |  |                          |  |  |                                            |         |  |                          |  |        |  |  |  |         | 

Standardized measure of discounted future net cash flows

The following table discloses estimated future net cash flows from future production of proved developed and undeveloped reserves of crude oil,
condensate, natural gas liquids and natural gas. As prescribed by SEC Modernization of Oil and Gas Reporting rules and ASC 932 of the FASB Accounting Standards Codification (ASC) relating to Extractive Activities  Oil and Gas (formerly SFAS
no. 69 Disclosures about Oil and Gas Producing Activities), such future net cash flows were estimated using the average first-day-of-the-month price during the 12-month period for 2015, 2014 and 2013 and using a 10% annual discount factor. Future
development and abandonment costs include estimated drilling costs, development and exploitation installations and abandonment costs. These future development costs were estimated based on evaluations made by the Company and the operators of the
fields in which the Company has an interest. The future income tax was calculated by applying the tax rate in effect as of the date this supplementary information was filed.

This standardized measure is not intended to be and should not be interpreted as an estimate of the market value of the Companys
reserves. The purpose of this information is to give standardized data to help the users of the financial statements to compare different companies and make certain projections. It is important to point out that this information does not include,
among other items, the effect of future changes in prices, costs and tax rates, which past experience indicates that are likely to occur, as well as the effect of future cash flows from reserves which have not yet been classified as proved reserves,
of a discount factor more representative of the value of money over the lapse of time and of the risks inherent to the production of oil and gas. These future changes may have a significant impact on the future net cash flows disclosed below. For
all these reasons, this information does not necessarily indicate the perception the Company has on the discounted future net cash flows derived from the reserves of hydrocarbons.



S-8



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##### Table of Contents

|                                                         |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|-------------------------------------------------------- |  | --------------------------------------- | ------- | - | ------------------------ |  | ----- | ----- |  |  | --------- | - |  | ----- | ------ | - |  |  | ------ | -
|                                                         |  | Consolidated companies                  |         |   | Equity Method Investment | 
|                                                         |  | Argentina                               |         |   | Rest ofLatin-America     |  |       | Total |  |  | Venezuela |   |  | Total |       
|                                                         |  | (Stated in millions of Argentine pesos) |        
|At December 31, 2015                                     |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Future cash flows                                        |  |                                         | 85,296  |   |                          |  |      |       |  |  | 85,296    |   |  |       | 4,822  |   |  |  | 4,822  |  
|Future production costs                                  |  |                                         | (41,274 | ) |                          |  |      |       |  |  | (41,274   | ) |  |       | (2,066 | ) |  |  | (2,066 | )
|Future development and abandonment costs                 |  |                                         | (13,769 | ) |                          |  |      |       |  |  | (13,769   | ) |  |       | (1,418 | ) |  |  | (1,418 | )
|Future income tax                                        |  |                                         | (6,869  | ) |                          |  |      |       |  |  | (6,869    | ) |  |       | (157   | ) |  |  | (157   | )
|                                                         |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Undiscounted future net cash flows                       |  |                                         | 23,384  |   |                          |  |      |       |  |  | 23,384    |   |  |       | 1,181  |   |  |  | 1,181  |  
|10% annual discount                                      |  |                                         | (7,671  | ) |                          |  |      |       |  |  | (7,671    | ) |  |       | (779   | ) |  |  | (779   | )
|                                                         |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Standardized measure of discounted future net cash flows |  |                                         | 15,713  |   |                          |  |      |       |  |  | 15,713    |   |  |       | 402    |   |  |  | 402    |  
|                                                         |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|At December 31, 2014                                     |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Future cash flows                                        |  |                                         | 61,252  |   |                          |  | 1,037 |       |  |  | 62,289    |   |  |       | 6,778  |   |  |  | 6,778  |  
|Future production costs                                  |  |                                         | (32,004 | ) |                          |  | (672  | )     |  |  | (32,676   | ) |  |       | (2,284 | ) |  |  | (2,284 | )
|Future development and abandonment costs                 |  |                                         | (10,218 | ) |                          |  | (243  | )     |  |  | (10,461   | ) |  |       | (1,224 | ) |  |  | (1,224 | )
|Future income tax                                        |  |                                         | (5,285  | ) |                          |  | (62   | )     |  |  | (5,347    | ) |  |       | (130   | ) |  |  | (130   | )
|                                                         |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Undiscounted future net cash flows                       |  |                                         | 13,745  |   |                          |  | 60    |       |  |  | 13,805    |   |  |       | 3,140  |   |  |  | 3,140  |  
|10% annual discount                                      |  |                                         | (4,493  | ) |                          |  | (27   | )     |  |  | (4,520    | ) |  |       | (1,216 | ) |  |  | (1,216 | )
|                                                         |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Standardized measure of discounted future net cash flows |  |                                         | 9,252   |   |                          |  | 33    |       |  |  | 9,285     |   |  |       | 1,924  |   |  |  | 1,924  |  
|                                                         |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|At December 31, 2013                                     |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Future cash flows                                        |  |                                         | 39,279  |   |                          |  | 1,055 |       |  |  | 40,334    |   |  |       | 12,291 |   |  |  | 12,291 |  
|Future production costs                                  |  |                                         | (20,993 | ) |                          |  | (770  | )     |  |  | (21,763   | ) |  |       | (9,073 | ) |  |  | (9,073 | )
|Future development and abandonment costs                 |  |                                         | (6,490  | ) |                          |  | (185  | )     |  |  | (6,675    | ) |  |       | (843   | ) |  |  | (843   | )
|Future income tax                                        |  |                                         | (3,009  | ) |                          |  | (60   | )     |  |  | (3,069    | ) |  |       | (535   | ) |  |  | (535   | )
|                                                         |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Undiscounted future net cash flows                       |  |                                         | 8,787   |   |                          |  | 40    |       |  |  | 8,827     |   |  |       | 1,840  |   |  |  | 1,840  |  
|10% annual discount                                      |  |                                         | (2,328  | ) |                          |  | 29    |       |  |  | (2,299    | ) |  |       | (652   | ) |  |  | (652   | )
|                                                         |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  
|Standardized measure of discounted future net cash flows |  |                                         | 6,459   |   |                          |  | 69    |       |  |  | 6,528     |   |  |       | 1,188  |   |  |  | 1,188  |  
|                                                         |  |                                         |         |   |                          |  |       |       |  |  |           |   |  |       |        |   |  |  |        |  



S-9



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##### Table of Contents

Changes in the standardized measure of discounted future net cash flows

The following table discloses the changes in the standardized measure of discounted future net cash flows for the years ended December 31,
2015, 2014 and 2013:



|                                                                                             |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|-------------------------------------------------------------------------------------------- |  | ---------------------- | --------------------------------------- | - | ----------------------- |  | --- | ----- |  |  | --------- | - |  | ----- | ------ | - |  |  | ------ | -
|                                                                                             |  | Consolidated companies |                                         |   | Equity MethodInvestment | 
|                                                                                             |  | Argentina              |                                         |   | Rest ofLatin-America    |  |     | Total |  |  | Venezuela |   |  | Total |       
|                                                                                             |  |                        | (Stated in millions of Argentine pesos) |  
|Standardized measure at December 31, 2014                                                    |  |                        | 9,252                                   |   |                         |  | 33  |       |  |  | 9,285     |   |  |       | 1,924  |   |  |  | 1,924  |  
|                                                                                             |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|Changes related to oil & gas activities:                                                     |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|Hydrocarbons sales net of production costs                                                   |  |                        | (5,265                                  | ) |                         |  | (9  | )     |  |  | (5,274    | ) |  |       | 1,012  |   |  |  | 1,012  |  
|Net change in sales prices, net of future production costs                                   |  |                        | (82                                     | ) |                         |  | 7   |       |  |  | (75       | ) |  |       | (3,770 | ) |  |  | (3,770 | )
|Changes in future development costs                                                          |  |                        | (4,944                                  | ) |                         |  | (3  | )     |  |  | (4,947    | ) |  |       | (673   | ) |  |  | (673   | )
|Extensions, discoveries and improved recovery, net of future production and associated
costs |  |                        | 4,223                                   |   |                         |  |    |       |  |  | 4,223     |   |  |       |       |   |  |  |       |  
|Development costs incurred                                                                   |  |                        | 4,287                                   |   |                         |  | 3   |       |  |  | 4,290     |   |  |       | 725    |   |  |  | 725    |  
|Revisions of quantity estimates                                                              |  |                        | 24                                      |   |                         |  | (64 | )     |  |  | (40       | ) |  |       | (392   | ) |  |  | (392   | )
|Purchase of reserves in place                                                                |  |                        |                                        |   |                         |  |    |       |  |  |          |   |  |       |       |   |  |  |       |  
|Sale of reserves in place                                                                    |  |                        | (755                                    | ) |                         |  |    |       |  |  | (755      | ) |  |       |       |   |  |  |        |  
|Net change in income taxes                                                                   |  |                        | 872                                     |   |                         |  |    |       |  |  | 872       |   |  |       | (2     | ) |  |  | (2     | )
|Accretion of discount                                                                        |  |                        | 2,045                                   |   |                         |  | 13  |       |  |  | 2,058     |   |  |       | 306    |   |  |  | 306    |  
|Changes in production rates                                                                  |  |                        | 2,137                                   |   |                         |  |    |       |  |  | 2,137     |   |  |       | (342   | ) |  |  | (342   | )
|Other changes                                                                                |  |                        | 3,919                                   |   |                         |  | 20  |       |  |  | 3,939     |   |  |       | 1,614  |   |  |  | 1,614  |  
|                                                                                             |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  
|Standardized measure at December 31, 2015                                                    |  |                        | 15,713                                  |   |                         |  |    |       |  |  | 15,713    |   |  |       | 402    |   |  |  | 402    |  
|                                                                                             |  |                        |                                         |   |                         |  |     |       |  |  |           |   |  |       |        |   |  |  |        |  



S-10



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##### Table of Contents

|                                                                                             |  |                                         |        |   |                          |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|-------------------------------------------------------------------------------------------- |  | --------------------------------------- | ------ | - | ------------------------ |  | --- | ----- |  |  | --------- | - |  | ----- | ----- | - |  |  | ----- | -
|                                                                                             |  | Consolidated companies                  |        |   | Equity Method Investment | 
|                                                                                             |  | Argentina                               |        |   | Rest ofLatin-America     |  |     | Total |  |  | Venezuela |   |  | Total |      
|                                                                                             |  | (Stated in millions of Argentine pesos) |       
|Standardized measure at December 31, 2013                                                    |  |                                         | 6,459  |   |                          |  | 69  |       |  |  | 6,528     |   |  |       | 1,188 |   |  |  | 1,188 |  
|                                                                                             |  |                                         |        |   |                          |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|Changes related to oil & gas activities:                                                     |  |                                         |        |   |                          |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|Hydrocarbons sales net of production costs                                                   |  |                                         | (5,479 | ) |                          |  | (97 | )     |  |  | (5,576    | ) |  |       | (363  | ) |  |  | (363  | )
|Net change in sales prices, net of future production costs                                   |  |                                         | 689    |   |                          |  | 64  |       |  |  | 753       |   |  |       | 981   |   |  |  | 981   |  
|Changes in future development costs                                                          |  |                                         | (5,107 | ) |                          |  | (26 | )     |  |  | (5,133    | ) |  |       | (550  | ) |  |  | (550  | )
|Extensions, discoveries and improved recovery, net of future production and associated
costs |  |                                         | 1,560  |   |                          |  |    |       |  |  | 1,560     |   |  |       |      |   |  |  |      |  
|Development costs incurred                                                                   |  |                                         | 3,810  |   |                          |  | 31  |       |  |  | 3,841     |   |  |       | 539   |   |  |  | 539   |  
|Revisions of quantity estimates                                                              |  |                                         | (235   | ) |                          |  | (97 | )     |  |  | (332      | ) |  |       | (551  | ) |  |  | (551  | )
|Purchase of reserves in place                                                                |  |                                         | 6,421  |   |                          |  |    |       |  |  | 6,421     |   |  |       |      |   |  |  |      |  
|Sale of reserves in place                                                                    |  |                                         | (721   | ) |                          |  |    |       |  |  |           |   |  |       |      |   |  |  |       |  
|Net change in income taxes                                                                   |  |                                         | (973   | ) |                          |  | 7   |       |  |  | (966      | ) |  |       | 384   |   |  |  | 384   |  
|Accretion of discount                                                                        |  |                                         | 1,126  |   |                          |  | 15  |       |  |  | 1,141     |   |  |       | 203   |   |  |  | 203   |  
|Changes in production rates                                                                  |  |                                         | (3     | ) |                          |  | 47  |       |  |  | 44        |   |  |       | (250  | ) |  |  | (250  | )
|Other changes                                                                                |  |                                         | 1,705  |   |                          |  | 20  |       |  |  | 1,725     |   |  |       | 343   |   |  |  | 343   |  
|                                                                                             |  |                                         |        |   |                          |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  
|Standardized measure at December 31, 2014                                                    |  |                                         | 9,252  |   |                          |  | 33  |       |  |  | 10,006    |   |  |       | 1,924 |   |  |  | 1,924 |  
|                                                                                             |  |                                         |        |   |                          |  |     |       |  |  |           |   |  |       |       |   |  |  |       |  



S-11



---

##### Table of Contents

|                                                                                             |  |                        |                                         |   |                          |  |      |       |  |  |           |   |  |       |       |   |  |  |       |  
|-------------------------------------------------------------------------------------------- |  | ---------------------- | --------------------------------------- | - | ------------------------ |  | ---- | ----- |  |  | --------- | - |  | ----- | ----- | - |  |  | ----- | -
|                                                                                             |  | Consolidated companies |                                         |   | Equity Method Investment | 
|                                                                                             |  | Argentina              |                                         |   | Rest ofLatin-America     |  |      | Total |  |  | Venezuela |   |  | Total |      
|                                                                                             |  |                        | (Stated in millions of Argentine pesos) |  
|Standardized measure at December 31, 2012                                                    |  |                        | 6,052                                   |   |                          |  | 123  |       |  |  | 6,175     |   |  |       | 1,190 |   |  |  | 1,190 |  
|                                                                                             |  |                        |                                         |   |                          |  |      |       |  |  |           |   |  |       |       |   |  |  |       |  
|Changes related to oil & gas activities:                                                     |  |                        |                                         |   |                          |  |      |       |  |  |           |   |  |       |       |   |  |  |       |  
|Hydrocarbons sales net of production costs                                                   |  |                        | (3,955                                  | ) |                          |  | (103 | )     |  |  | (4,058    | ) |  |       | (573  | ) |  |  | (573  | )
|Net change in sales prices, net of future production costs                                   |  |                        | (744                                    | ) |                          |  | 1    |       |  |  | (743      | ) |  |       | 137   |   |  |  | 137   |  
|Changes in future development costs                                                          |  |                        | (1,884                                  | ) |                          |  | (100 | )     |  |  | (1,984    | ) |  |       | (237  | ) |  |  | (237  | )
|Extensions, discoveries and improved recovery, net of future production and associated
costs |  |                        |                                        |   |                          |  |     |       |  |  |          |   |  |       |      |   |  |  |      |  
|Development costs incurred                                                                   |  |                        | 2,087                                   |   |                          |  | 31   |       |  |  | 2,118     |   |  |       | 240   |   |  |  | 240   |  
|Revisions of quantity estimates                                                              |  |                        | 324                                     |   |                          |  | 12   |       |  |  | 336       |   |  |       | (106  | ) |  |  | (106  | )
|Purchase of reserves in place                                                                |  |                        | 1,768                                   |   |                          |  |     |       |  |  | 1,768     |   |  |       |      |   |  |  |      |  
|Net change in income taxes                                                                   |  |                        | 527                                     |   |                          |  | 25   |       |  |  | 552       |   |  |       | 76    |   |  |  | 76    |  
|Accretion of discount                                                                        |  |                        | 1,094                                   |   |                          |  | 23   |       |  |  | 1,117     |   |  |       | 200   |   |  |  | 200   |  
|Changes in production rates                                                                  |  |                        | (227                                    | ) |                          |  | 16   |       |  |  | (211      | ) |  |       |      |   |  |  |      |  
|Other changes                                                                                |  |                        | 1,417                                   |   |                          |  | 41   |       |  |  | 1,458     |   |  |       | 261   |   |  |  | 261   |  
|                                                                                             |  |                        |                                         |   |                          |  |      |       |  |  |           |   |  |       |       |   |  |  |       |  
|Standardized measure at December 31, 2013                                                    |  |                        | 6,459                                   |   |                          |  | 69   |       |  |  | 6,528     |   |  |       | 1,188 |   |  |  | 1,188 |  
|                                                                                             |  |                        |                                         |   |                          |  |      |       |  |  |           |   |  |       |       |   |  |  |       |  



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