Sunday, July 16, 2006

Petrobras Arbitration

Brazilian newspapers reported last week that Petrobras —Brazil’s state-owned oil company, the (then) major player in Bolivia’s energy market— will turn down the requests of Yacimientos Petrolíferos Fiscales Bolivianos - YPFB (Bolivian government’s oil company) to a review of prices in their gas purchase agreement. According to several sources, the gas purchase agreement contains an arbitration clause with seat of arbitration in New York City, New York.

The Bolivian government’s efforts to renegotiate its energy contracts, and this (eventual) big arbitration, are consequences of the “nationalization” of Bolivia’s oil and gas fields dated May 1, 2006.

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