The Bolivian minister of Hydrocarbons, Andrés Soliz Rada, says that Bolivia will run audits on foreign oil companies to determine just how much they have invested in the country over the last decade.
"Everything depends on the audits. Based on the results of the audits we will decide what kind of contracts we draw up and future taxation policy," declared Soliz Rada.
As part of the nationalization of the country’s oil and gas reserves announced on Monday, May 1st, all contracts with foreign operators in the country were cancelled. New rules and new contracts are supposed to be ready within six months.
According to Soliz Rada, the government of Bolivia will draw up and present the new contracts which will mean important changes in the present situation.
"The government will no longer have to comply with contracts drawn up by the oil companies, which was what happened in the past. Now the companies will have to obey government contracts," he said.
As an example of what he was talking about, Soliz Rada pointed out that the Brazilian company, Petrobras, was paying 50% in taxes to operate two large gas fields, but now pays 82% in taxes. The two oil fields supply 70% of the gas exported to Brazil.
"Studies we have made show that Petrobras paid off its investment in those gas fields some time ago. Now it is time for the Bolivian people to get in on what has been an extraordinary deal," said the minister, adding that as Bolivian gas accounts for 80% of Brazilian consumption, "There is a lot of interest in ensuring that the gas flow is not interrupted."
Soliz Rada also commented on the fact that Bolivia has now nationalized its oil and gas resources three times. He pointed out that with the second nationalization in 1969, the country confiscated gas reserves worth an estimated US$ 3 billion. But with this week’s nationalization, the country has confiscated reserves worth an estimated US$ 250 billion.
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