Peter Howard Wertheim
OGJ Correspondent
RIO DE JANEIRO, July 6 -- Confusion about Bolivia's hydrocarbon policies has increased since interim President Eduardo Rodriguez issued decrees instructing the ministries of oil and gas, interior, and defense "to coordinate work and operations so as to guarantee state authority of oil and gas deposits."
One of the decrees orders immediate implementation of a law passed last May that would raise hydrocarbon taxes. The law also has an ambiguous item calling upon military help to control oil and gas installations.
Another decree calls for auditing of foreign companies operating in Bolivia to verify that royalty and tax payments to the government correspond with production at each installation.
Some analysts interpret one of the decrees as an order for the armed forces to take physical control of oil fields and as a step toward nationalization of hydrocarbon reserves. Others say that the army was called in to protect petroleum installations from further invasion by protestors.
The nongovernmental Bolivian Hydrocarbons Chamber, which includes major foreign oil companies, issued a note saying, "The situation is not clear. We don't know what the decree means."
Hydrocarbons Minister Mario Canida was quoted by the Bolivian newspaper El Deber as saying, "The participation of the military is to guarantee security and free access to oil and gas companies."
Bolivia's Defense Minister Gonzalo Mendez told the newspaper La Prensa that troops would not be mobilized. Other military officers expressed concerns about the "logistics and expenditures involved in such a move."
Unhappy with a new hydrocarbons law that adds a 32% tax at the wellhead to the existing 18% royalty on hydrocarbons production by foreign companies, the Movement Toward Socialism (MAS) party and other leftist organizations want the government to decree outright nationalization of hydrocarbon resources (OGJ Online, Mar. 23, 2005).