Weekly Report - 4 April 2006

The immediate response from the Bolivian government was that there would be no increase in exports of gas to Brazil, beyond the contractually agreed amounts, if Petrobrás did not adapt to the new policies (which include the increased tax take, vaguely defined 'nationalisation' of the industry, and higher prices for the gas). On 2 April Petrobrás president José Sergio Gabrielli announced that he was seeking a reopening of dialogue with the Bolivian government.

Repsol-YPF announced on 31 March that it had no intention of seeking international arbitration over the new taxation régime, and that it hoped to become a partner of the Bolivian government.

ECUADOR | New law taxes oil firms' windfall profits. On 29 March the Ecuadorean congress passed a law which increases to 60% the government's tax take on the windfall profits of oil companies due to big increases in the world price for oil. The Asociación de la Industrias Hidrocarburí­feras, which represents the 15 foreign oil companies operating in Ecuador, says that the law breaches existing contractual arrangements and have asked President Alfredo Palacio to veto it. Palacio has been urged to publicly announce the law by his economy minister, Diego Borja. He has 10 days in which to decide.

VENEZUELA | Foreign oil firms become PDVSA's partners. On 31 March representatives of 16 foreign oil companies operating in Venezuela signed 'migration agreements' whereby their old contracts are replaced by an arrangement in which they become partners in a 'mixed company' controlled by the state oil firm PDVSA. That same day Seniat, the tax-collection agency, reported that the 16 oil firms had duly paid up some US$74m they owed the state in overdue taxes.

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