Bolivia is to stop oil companies setting the price of oil as well as the volume of oil exports. The government will also be implementing shortly a law approved by Congress last year that increases taxes on oil and gas production to 50% from 18%. Spain’s Repsol YPF and Brazil’s Petrobras, the country’s largest oil and gas producers, will have to charge more to their units abroad to purchase supplies from their operations in Bolivia. Speaking at the IMF Spring meeting in Washington, Carlos Villegas, Bolivia’s planning and development minister, commented: “With the same company being the buyer and seller, volumes and prices are significantly altered at the expense of the Bolivian government and to the benefit of the company … This is going to change.”
Category: Regions
Banxico Cuts Benchmark Lending Rate
Banco de México (Banxico) has lowered Mexico’s benchmark overnight lending rate from 7.50% to 7.25%, against market expectations. The cut brings the rate to its lowest level in 20 months and is the ninth consecutive reduction in as many months. Despite a recent spike, Banxico said it believed core inflation would ease after April and remain within the target range of 3% by year end.
Cofetel President To Step Down
Jorge Arredondo, the president of the Comisión Federal de Telecomunicaciones (Cofetel), Mexico’s telecom regulator, is to step down from his post at the end of April. This follows the resignation last week of three senior figures at the regulator, who left in protest against the recent approval of a controversial reform to the country’s media laws. Critics of the reform claim that it favors the large broadcasters and will allow them to consolidate their control of the media.
US Warns Ecuador; Palacio Seeks Free Trade With Mexico
Following the decision by Ecuador’s lawmakers to reform a law obliging foreign oil companies to hand over half of all extra profits made from the high price of oil, the US has warned the country that it needs to resolve several critical issues if free treaty talks are to continue. The warning came from the spokesperson for the US trade representative’s office, who added that no date had been set to restart the talks; Ecuador has said that restarting negotiations with the US is a priority and hopes to see it happen by the beginning of May. Meantime, Ecuador’s president, Alfredo Palacio, is hoping to initiate free trade talks with Mexico during his visit to that country this week.
Venezuela Announces CAN Departure
Venezuela has announced that it will be leaving the Community of Andean Nations (CAN), although it gave no precise date. Venezuelan president, Hugo Chávez, made the government’s decision public while attending an energy summit in Paraguay last week. Last November Chávez said that he was looking towards trade bloc Mercosur rather than to CAN for the future direction of Venezuela and was critical of the member nations of CAN – Colombia, Ecuador, Peru and Bolivia – for seeking a free trade agreement with the US.
Bolivia Buys 5% Of Telesur
Bolivian and Venezuelan presidents, Evo Morales and Hugo Chávez, officially sealed the deal for Bolivia to buy a 5% stake in Latin American broadcaster Telesur. The heads of state signed the agreement in Asunción, Paraguay, where they are both attending an energy meeting. As a stakeholder in Telesur, Bolivia will form part of the company’s advisory board, along with Venezuela, Cuba, Argentina and Uruguay. Telesur began operating in July last year. Venezuela has a 51% stake, Argentina 20%, Cuba 19% and Uruguay 10%.
Ecuador Approves 50% Oil Reform
Ecuador’s Congress has approved a proposal put forward by government to allow the state to take a 50% share in extra revenues earned by oil companies as a result of high international crude oil prices. Congress had originally wanted 60% of extra revenues for the state. Foreign oil companies have rejected Ecuador’s oil reform, and the impasse has led to a stalling in the free trade agreement between Ecuador and the US.
Santander Sells Up In Bolivia
Spanish bank Grupo Santander has completed the sale of its majority stake in Bolivia’s Banco Santa Cruz to local Banco Mercantil. Santander is thought to have garnered anything between $26 million and $38 million for its 96.3% stake in the country’s fourth-largest bank. The acquisition of Banco Santa Cruz makes Banco Mercantil Bolivia’s largest bank; currently it is the second largest.
Analysts: Banxico To Hold Interest Rates
A recent survey of market experts predicts that Mexico’s central bank, Banco de México (Banxico), will hold interest rates steady after eight consecutive months of cuts. Banxico will decide on Friday whether to lower the benchmark overnight lending rate from its current level of 7.25%. Last month, the Bank cut the rate from 7.50%, but a slight rise in core inflation in March is likely to stay Banxico’s hand from lowering the rate further this month, according to a majority of economists.
Globeleq Finalizes Panama-DR Energy Deal
Emerging markets energy company Globeleq, registered in Bermuda, has finalized the deal to buy controlling shares of El Paso Corporation in Panama and Dominican Republic. The deal includes a stake in Fortuna, a hydroelectric plant with a capacity of 300 MW and Pedregal, a 55 MW thermogenerator in Panama, as well as an increased stake in CEPP, a 65 MW thermogenerating plant in Dominican Republic. Globeleq is expected to make further acquisitions in the region later in the year. The company has energy plants in Bolivia, Peru, Guatemala, Nicaragua and Jamaica.