Repsol freezes EUR 389m Bolivian investment
27 January 2006
MADRID — Spanish energy giant Repsol YPF announced that it had put on hold some EUR 389 million in investment in Bolivia, saying that some projects were no longer viable due to country’s new hydrocarbons law.
The amount frozen represents half of the company’s planned investment in the country through 2009.
The move comes only days after the inauguration as Bolivia’s president of Evo Morales, a Socialist who has promised to nationalize his country’s energy industry, though in a manner he says will not be confiscatory.
Repsol YPF chairman Antonio Brufau said the company wants to continue to invest in Bolivia, but said that, before doing so “it’s necessary to clarify the rules of the game”.
According to Brufau, Repsol’s investments are on “stand-by” because, under the current situation, “it’s difficult to commit to long-term investments”.
Brufau, however, said that the company is “open to maintaining a dialogue” with the new Bolivian authorities, adding that the conversation he had with Morales during the Bolivian’s recent visit to Spain was “frank and positive”.
Under the hydrocarbons law enacted in spring 2005, Bolivia’s levies on firms rose from some of the lowest in the world to a cumulative 50 percent, and Morales’s team wants to apply an even higher rate to companies that have already fully recouped their initial investment.
[Copyright EFE with Expatica]
Subject: Spanish news