Political Risk Latin America Blog @PolRiskLatam

Bolivia back steps and offers new deal to attract foreign oil companies

Posted in News and Articles, Political Risk by politicalrisklatam on January 6, 2011

by Merco Press News, January 6th, 2011.

President Evo Morales’ government has offered to reimburse 100% of the cost of successful exploratory drilling in Bolivia by private oil and natural gas companies, state-owned energy company YPFB announced this week.

Carlos Villegas, president of Yacimientos Petroliferos Fiscales Bolivianos said most of the companies that operate in Bolivia have accepted the proposal, which is especially aimed at triggering the search for liquid hydrocarbons.

“The private company will cover the cost of exploration if the results are negative, all the losses will be assumed by the company and YPFB will have no obligations. If the results are positive, YPFB pledges through a mixed corporation to return 100% of the investment made in the exploration phase,” Villegas said.

The executive described the offer as an “important benefit” for companies and said other incentives could be offered to boost gas and oil production.

Another measure under consideration by YPFB is to increase the amount that companies currently receive per-barrel, currently just 10 US dollars even though international market prices now stand at almost 90 USD. (continue reading… )


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