Bolivia Min: Foreign Oil Companies Can't Book Reserves as Own

Mar 23, 2007 (Dow Jones Newswires)

Foreign energy companies can't book Bolivian oil and gas reserves as theirs, Bolivian Hydrocarbons Minister Carlos Villegas said, the El Diario newspaper reported Friday.

"Can companies book the reserves as theirs at stock exchanges? I clearly tell them 'no,' because the owner is the Bolivian state," Villegas is quoted as telling a Bolivian senate commission.

Villegas added companies that continue to book Bolivian reserves as theirs will be expelled from Bolivia.

Most energy companies operating in Bolivia have kept silent about the issue but keep registering Bolivian oil and gas reserves with the U.S. Securities and Exchange Commission.

Brazil's state-run oil company Petroleo Brasileiro SA (PBR), or Petrobras, has said repeatedly it accepts the reserves belong to the Bolivian state but keeps booking them due to obligations as a listed company.

After signing new production contracts with Bolivia in October that steeply raised taxes and royalties on production, Petrobras Chief Executive Sergio Gabrielli said the company will be able to continue to book its reserves from Bolivia.

The new contracts under SEC criteria can be seen as an increase in taxes, Gabrielli argued.

Therefore, "the reserves can be booked by Petrobras," Gabrielli said in October.

Gabrielli then added the new contracts were shared production contracts with Bolivian state energy company YPFB and can't be called service-provider contracts, which wouldn't allow the company to book reserves as theirs.

"We don't receive a fixed profit, therefore they are no service provider contracts," Gabrielli said.

Copyright (c) 2007 Dow Jones & Company, Inc.

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