El Salvador Hydrocarbons Law

El Salvador’s reforms to hydrocarbons laws create opportunities for U.S. companies to explore the existence of oil and natural gas in the country.

On January 3, 2024, the Legislative Assembly in El Salvador approved reforms to the former Hydrocarbons Law and renamed it as the Law on the Exploration and Exploitation of Hydrocarbons Deposits.  The law determines that the exploration and exploitation of hydrocarbons are the sole responsibility of the Hydroelectric Executive Commission of the Lempa River (CEL) and allows CEL to contract companies to conduct studies to determine the existence of oil and natural gas in the Salvadoran territory.

According to the law, CEL will be able to contract a company by the forms that it deems necessary, by itself or through contracts of operation, provision of services, investment contracts, or other modalities of contracts determined or internally regulated by the CEL. In Article 47-G, the law specifies the criteria companies need to comply with in the prequalification phase.   

Any contract under the Law on the Exploration and Exploitation of Hydrocarbons Deposits is excluded from El Salvador’s Public Procurements Law.  Also, Article 47-L of the law stipulates that CEL can do direct contracting. 

A full copy of the law is available in the Official Gazette. Date of Publication: January 10, 2023. 

For more information, contact the U.S. Commercial Service Office in San Salvador at office.sansalvador@trade.gov.