Bolivia's Deputy Minister of Exploration and Exploitation Daniel Mayta Jiménez Tuesday said that following the discovery of the Margarita 10 well and in a move to foster investment and encourage production, the Hydrocarbons Law 3058 -enacted May 17, 2005- needed changing.
“We are working on modifying the regulations, we have to differentiate between what is urgent and what is necessary. We see it as necessary that Law 3058 has already completed a cycle,” Mayta Jiménez said.
He added that the Government was working on the supreme decrees to generate incentives for the sector and increase the areas for exploration by the State-run oil company YPFB.
At this time, the conditions of the market and the oil industry require an adjustment, Hydrocarbons and Energy Minister Franklin Molina had said last year, when he also admitted modifying Law 3058 was under consideration.
According to analysts, an updated Hydrocarbons Law will attract private investors to finance exploration activities which will result in an increase in gas and oil reserves. Bolivia is said to need at least US $ 8.5 billion for this purpose. Decree 28701 for the nationalization of hydrocarbons, signed May 1, 2006, already envisions a new hydrocarbons law.
YPFB CEO Armin Dorgathen, foresees oil revenues for 2022 will amount to around US $ 2 billion dollars, not only thanks to Margarita 10 but also because of other long-term projects.
The Margarita-10 well is located at the Margarita-Huacaya field in the departments of Chuquisaca and Tarija. According to Bolivian authorities, profits from Margarita-10 will add up to US $ 260 million annually thanks to its production capabilities estimated to be around 3 million cubic meters per day,” according to President Luis Arce.
Dorgathen has also said YPFB and Repsol would make their best efforts to have this new gas delivered in the shortest time possible.”