Bolivian Lower House Approves Bill on Higher Oil and Gas Taxes

[struggle4progress]

May 5 (Bloomberg) -- Bolivia's Lower House passed a bill that would raise taxes on oil and gas production, a Congress spokesman said.

The bill, which seeks to add a 32 percent tax to the existing 18 percent royalty, was passed late Thursday by 59 votes to 48 and will be sent Friday to President Carlos Mesa for final review, spokesman Edil Herrera said in a phone interview from La Paz. He said Mesa has 10 days to pass or veto the bill. Mesa, who offered to resign amid protests against the government's energy policies in March, has said he will block the bill.

The bill will also force 12 foreign companies including Exxon Mobil Corp. and Spain's Repsol YFP to renegotiate 72 exploration and production contracts mainly signed during the governments of President Gonzalo Sanchez de Losada from 1993 to 2003, Herrera said.

Companies including Repsol YFP and Rio de Janeiro-based Petroleo Brasileiro SA said they will cut back on investment if the hydrocarbon law is passed. Reading, England-based BG Group Plc has said it will take legal action against the Bolivian government if its contract is rescinded. <snip>

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