LA PAZ – The decision to nationalize Bolivia’s oil and gas sector on May 1, 2006, has generated $31.5 billion for the public coffers over the past decade, the CEO of state energy company YPFB said Friday.
By comparison, Guillermo Acha told state-run media that taxes and royalties from oil and gas production amounted to $2.5 billion in the prior 10 years.
Acha, who said the government planned to invest $12.4 billion in the hydrocarbons sector through 2020, said a “radical change” had occurred since the May 2006 nationalization because the sharply higher taxes and royalties contributed to the government’s wealth-distribution and social-inclusion efforts.
Bolivia’s hydrocarbons sector – and its natural gas industry in particular – accounts for a significant portion of the nation’s gross domestic product of roughly $33 billion, while the revenue paid into the Treasury is a key pillar of the government’s budget.
The nationalization decree, issued four months after President Evo Morales took office, involved requiring the – mostly foreign – energy firms to convert their Bolivian operations into minority partnerships with YPFB.
All of the companies doing business in the Andean nation’s oil and gas sector signed the new contracts, which included sharply higher taxes and royalties for La Paz.
In recent months, the government’s earnings from gas exports – primarily to Argentina and Brazil – have plunged because those sales are indexed to sharply lower global oil prices.