Santa Cruz (Bolivia), May 25 (IANS) Bolivia’s government, which asserted greater state control over the Andean nation’s natural gas sector seven years ago, says it will issue a decree to encourage investment in exploration.
Vice President Alvaro Garcia Linera made the announcement at the inauguration of a gas and oil congress in the eastern city of Santa Cruz, where energy experts from nine countries have gathered.
The incentives are “very important, very attractive” and will help investors make a “extremely rapid return on their investment”, he said.
President Evo Morales’ government instituted a new tax regime in 2006 that gives the state up to 82 percent of the value of gas production, leaving foreign multinationals with the remaining 18 percent, an overhaul that has made it difficult to attract investment.
Garcia Linera did not provide details on the incentives to be offered, but he said the goal was to attract $500 million worth of investment annually starting this year.
In the seven years since Morales boosted the state’s tax and royalty take, roughly $5.2 billion has been invested in the sector but only about a fifth of the total has been allocated for exploration.
The president of the Bolivian Chamber of Hydrocarbons and Energy, or CBHE, Carlos Delius, who is attending the congress, told EFE that his institution received the announcement with “cautious optimism”.
The CBHE comprises multinational energy companies operating in Bolivia, including Spain’s Repsol, Brazil’s Petrobras, France’s Total, British Gas and Russia’s Gazprom.
Multinational companies, regarded as “service providers” since Morales’ 2006 overhaul of the natural gas sector, say they must be given a more important role if the government wants to spur an intensive exploration campaign and make the business sustainable.
Bolivia’s proven natural gas reserves were estimated at 11.2 trillion cubic feet in December 2012, up from 9.9 trillion feet three years earlier.