MercoPress. South Atlantic News Agency

Repsol-YPF freezes investment in Bolivia's oil industry

Repsol YPF has shelved plans to export Bolivian natural gas to the United States through the Pacific LNG consortium informed Tuesday the president of the Spanish-Argentine energy corporation.

Antonio Brufau told reporters that for Repsol YPF the project "doesn't exist" anymore arguing that the corporation's new strategic plan for 2005-2009 focuses on integrating Southern Cone's gas markets.

Repsol-YPF strategy is to increase Bolivian gas production to the equivalent of 227,000 barrels of crude per day, to supply the domestic market as well as exporting to Brazil and Argentina where gas sales have great potential.

But, "we must make sure we will recover our investments and before any future plans we have to carefully study the new Bolivian Hydrocarbons Law", underlined Mr. Brufau.

Last December Repsol-YPF announced the possibility of freezing investments in Bolivia following changes in hydrocarbons legislation, the second oil corporation to adopt this position behind Brazil's Petrobras.

Bolivia's new legislation drastically increases taxes on extracted oil, ignores previous contracts, and has been described as "confiscatory" by corporations operating in the country since 1996 when the oil sector was opened to foreign investment.

Repsol YPF has a 50% stake in Andina Petroleum through which it channels investments in Bolivia.

The Pacific LNG consortium ?made up of Repsol YPF, British Petroleum (BP) and British Gas- was created with the goal of transporting natural gas from Bolivia to either Chile's or Peru's Pacific coast and once liquefied shipped United States or Mexico.

Pacific LNG consortium had plans to invest 7,4 billion US dollars in the operation.