Bolivia takes oil control back from multinationals


180 day deadline: That law required the companies to cede production to YPFB, Bolivia’s former state energy monopoly, which would set its price and sell it. The decree puts this into immediate effect. It also gives the companies 180 days to accept new contracts, the terms of which will be set after a government audit.

State take to soar: In the interim, the State’s take from the two largest fields will rise to 82 per cent from 50 per cent (itself an increase from 18 per cent a year ago). This boosts the Government’s annual gas revenue by $320m to $780m.

Who’s the boss now? Secondly, YPFB will take a majority stake not just in the main gas and oil production companies, but in refineries and pipelines. Previously, the foreign companies had 51 per cent, with 49 per cent split between private pension funds and the government, which used the dividends to pay a pension to older Bolivians.

Pension system at risk: Those shares will be handed over to YPFB, potentially wrecking the pension system. (Since the funds have sold some of the shares, this provision may be unenforceable.) The extra shares needed for a majority stake will be "nationalised" – by unspecified means.

The Economist, 6/5/2006, p. 41

Source: Erisk Net  

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