MercoPress. South Atlantic News Agency

US company questions new Bolivian oil bill

United States' Vintage Petroleum company notified the Bolivian government that it will appeal to the bilateral investment protection treaty in pressing its case against Bolivia's new Hydrocarbons Act.

Hydrocarbons Chamber spokesman Carlos Alberto Lopez said last week that Vintage Petroleum has addressed a letter notifying the Bolivian government of the action. A similar procedure was taken last July by the three main private hydrocarbons operators in the country, Spanish-Argentine firm Repsol YPF, French Total Fina and British Gas.

These companies requested a round of negotiations, extending until January 8, 2006, as contemplated under the terms of Bolivia's bilateral treaties with Spain, France and Britain, before to the following step "resorting to international arbitration".

Vintage Petroleum controls one billion cubic feet of Bolivia's gas reserves, or roughly 2.1% of the South American country's proven 48.7 billion cubic feet.

Oil companies are disputing the recently reformed Hydrocarbons Act, especially the new 32% direct tax on oil and gas production as well as the unilateral modifications to established contracts.

According to Mr. Lopez, all and gas companies operating in Bolivia want to begin negotiations as soon as possible, since they consider the legislation an obstacle to the industry's development and output.

The private companies holding the largest gas reserves in Bolivia are Repsol-YPF, 22.3%; Petrobras, 17.5%; Total Fina-Elf, 13.4% and British Gas, 13.1%.

Repsol YPF leading position is made up of 13.9% through its half ownership of a company called Andina plus an 8.4% stake in Margarita deposits, in the south of the country.