Bolivia calls for responsible nationalization of oil and gas industry

Jul 05, 2004 02:00 AM

Bolivian President Carlos Mesa called for a "responsible nationalisation" of the country's oil and gas industry. He urged voters to participate in the referendum.
Oil companies now control the production of oil and gas, but if voters back the referendum's proposals, then the "State will recover sovereignty over oil and gas", Mesa said.

Credit Suisse First Boston said in a note that Bolivia plans to seek compensation from foreign oil companies Repsol-YPF, Petroleo Brasileiro and Total after an investigation determined that the firms were allegedly paying too few taxes.
Bolivia's older gas fields, which were fully operational prior to 1996, currently pay a 50 % tax rate, while the newer ones, such as the ones in which the three companies invested, are taxed at only 18 %, CSFB analyst Edward Westlake said.

If Bolivian voters approve the proposed changed to the oil and gas law in the July referendum, royalties will be raised to 50 % from 18 % and a national oil company will be reinstated,Yacimientos Petroliferos Fiscales Bolivianos (YPFB).
Within 180 days, after new legislation is approved, companies with existing upstream contracts will have to switch to joint development, joint production, operational or association contracts with the new state company, he said.

Source: AFX News
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