Petrobras, Repsol YPF to Seek Arbitration Upon Bill Approval

Brazil's federal energy company Petrobras and Spanish giant Repsol YPF would seek international arbitration if Bolivia's congress approves the hydrocarbons bill, a spokesperson for the hydrocarbons ministry told BNamericas.

At a Thursday meeting between company representatives, hydrocarbons chamber CBH president Raul Kieffer and the congressional subcommittee that is studying the tax and royalty aspects of the hydrocarbons bill, Petrobras and Repsol YPF said they "cannot be obligated to change their contracts," the spokesperson said.

Although companies are prepared to accept some changes for new contracts, such as higher taxes, the move to force companies to change their existing contracts to comply with the new regulations has drawn much criticism from the private sector.

The president of the economic development committee charged with preparing a report on the hydrocarbons bill, Santo Ramírez, was opposed to the meeting with private oil companies because he says "they have nothing more to add to the debate," the spokesperson said.

The committee has four sub-committees studying the bill, which President Carlos Mesa presented on September 7, but they cannot agree on several main points. The committee had planned to decide Wednesday whether to send the bill to the house for debate or try to resolve its internal differences first, but no decision was taken, the spokesperson said. If it decides to send the report to the full session, the house could begin debating the bill during the week of September 20-24 and, depending on how the debate goes, it could be approved by mid-October, the spokesperson said.

The bill would see the re-nationalization of upstream companies Andina and Chaco as well as transport company Transredes, and would increase royalties and taxes on hydrocarbons production to 50%. It would also create a new regulator, Petrobolivia, which would relieve state oil company YPFB of its regulatory duties and would be responsible for signing hydrocarbons contracts on behalf of the state.

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