LA PAZ – Bolivia’s government has agreed to pay $357 million in compensation to Anglo-Argentine Pan American Energy for the 2009 nationalization of its Chaco Petroleum natural gas unit.
The head of Bolivian state-owned energy company YPFB, Carlos Villegas, and a representative of Buenos Aires-based PAE, Argentina’s Alejandro Bulgheroni, signed the deal Thursday at the presidential palace in La Paz.
Bolivia decreed the expropriation of PAE’s 50 percent stake in Chaco in 2006 and the measure was carried out in 2009 after the two sides failed to negotiate an agreement.
In August, Bolivia’s Attorney General’s Office announced that a settlement had been reached with PAE but did not indicate the amount to be paid.
PAE had demanded $1.5 billion in compensation for its former stake in Chaco and for additional damages incurred and in 2010 initiated arbitration against Bolivia at the International Centre for Settlement of Investment Disputes, Attorney General Hector Arce said Thursday.
Bolivia, however, protested that institution’s registration of PAE’s request for arbitration, noting that it withdrew from the ICSID Convention in 2007.
Arce added that the eventual compensation amount is equivalent to 23.9 percent of the total initially sought by PAE.
Bolivia’s leftist government has reached settlements with numerous foreign companies after nationalizing assets in a range of sectors, including natural gas and telecommunications, but it still faces other lawsuits filed in courts in both the Andean nation and abroad.