BOLIVIA: Bolivian President Evo Morales replaces the head of Bolivia's state oil company

President Evo Morales replaced the head of Bolivia's state oil company YPFB on Monday and gave foreign energy companies a Sept. 1 deadline to pay new taxes outlined in the country's nationalization. The Bolivian leader named a top YPFB official, Juan Carlos Ortiz, to take over from Jorge Alvarado, who faced fraud accusations. Ortiz previously worked for foreign energy companies including Brazil's Petrobras, the biggest investor in Bolivia's gas and oil industry, analysts said. The shake-up comes several weeks after Morales suspended key parts of the role of YPFB in the state takeover of Bolivia's oil and gas resources in a move analysts said highlighted the company's lack of money and technical expertise. The implementation of the energy nationalization has been delayed as a cash-strapped YPFB struggles to take control of the sector. The government on Monday ordered the main foreign companies operating in the country to make a combined $30 million tax payment by Friday, the hydrocarbons ministry said in a statement. As part of the nationalization, Bolivia hiked taxes from 18 percent to up to as much as 82 percent on some companies and ordered YPFB to hold a majority stake in several foreign-owned refineries. The tax hike will impact multinational companies including Petrobras, Spain's Repsol YPF, France's Total and British gas and oil producer BG Group Plc. The extra revenue is expected to be used to breathe fresh financial life into YPFB. The resignation of Alvarado, the former YPFB head, followed weeks of fraud accusations swirling around one of the most public faces of the nationalization announced by Morales on May 1. But Morales came out on Monday strongly defending him. "There is no damage to the state and no corruption, I want to reiterate that Jorge Alvarado is incorruptible. During the last weeks, there was a conspiracy against the supreme decree of nationalization," Morales said. Last week, Energy Minister Andres Soliz said Alvarado had violated a key part of the nationalization process in a barter deal to exchange crude oil for diesel with Brazilian company Iberoamerica at a price well under the market value. Soliz said the former YPFB president signed the contract without asking for bids and without carrying out technical and legal studies as required by law. Alvarado had been under investigation by the attorney general's office over the deal. A geologist and former deputy for Morales' MAS party, Alvarado was appointed to the helm of YPFB soon after the government took office in January and charged with putting the dilapidated energy company at the heart of the sector. Bolivia has the second-largest natural gas reserves in South America after Venezuela.

ITN Source | August 29, 2006

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