Medinacelli Sworn in As New Hydrocarbons Minister in Bolivia

Mauricio Medinacelli was sworn in on Friday as Bolivia's new hydrocarbons minister after Jaime Eduardo Dunn resigned, a hydrocarbons ministry spokesperson told BNamericas.

Dunn stepped down on November 24 citing personal reasons, government news agency ABI reported.

Dunn became hydrocarbons minister last June and oversaw much of the conflict surrounding the controversial new hydrocarbons law passed in May.

The law requires foreign companies to sign new exploration and production contracts that include a combined tax and royalty rate of 50% on oil and gas production. The law established a 180-day period for the 72 contracts held by foreign companies to "migrate" to the new terms, but this deadline lapsed in mid-November without any contracts being transferred.

The government has reportedly set a new deadline of June 2006 for the contracts to be changed over.

Dunn was censured by congress on October 11 for domestic shortages of liquefied petroleum gas (LPG) and first submitted his resignation on October 18 in accordance with the constitution.

Although congress ratified his resignation, President Eduardo Rodríguez did not at that time. Dunn continued in office until he resubmitted his resignation on Thursday, the hydrocarbons ministry spokesperson said.

Rodríguez accepted Dunn's resignation this time round and the new hydrocarbons minister, Mauricio Medinacelli, was sworn in on Friday.

Medinacelli "is a tax expert, he is a little more than 30 years old, and he worked for a few years on drafting the new hydrocarbons law so he's quite familiar with everything that's problematic," the spokesperson said.

With a national election scheduled for December 18 and the transfer of power scheduled for January 23, Medinacelli will remain in office just under two months. "One of his top priorities will be ending the arguments surrounding the [hydrocarbons] law," the spokesperson said.

Negotiations are continuing with companies regarding the controversial 32% tax and 18% royalty rate stipulated by the law, which firms argue will make operations unprofitable, particularly in smaller oilfields.

Bolivia has had nine hydrocarbons ministers in the past three years including Medinacelli, the spokesperson said.

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