Repsol in Bolivia: When Business Serves Foreign Policy

Erratum: STRATFOR erroneously referred to Repsol YPF as a state-owned company in the following analysis. Repsol YPF is not a state-owned firm. STRATFOR regrets the error. It is STRATFOR’s policy not to remove published analyses from our Web site, but it is also our policy to acknowledge our errors. Our reputation is based on our history of forecasting and analysis, right or wrong, and we leave these analyses available to allow our clients to judge our accuracy. The analysis has been corrected. Bolivia's government will take away control of energy prices and export volumes from foreign companies, and will proceed with the implementation of a law raising energy-output taxes from 18 percent to 50 percent, Bolivian officials said April 23 in Washington. The move increases the difficulties facing Spanish company Repsol YPF, which has nearly a quarter of its reserves portfolio in Bolivia. Despite this new blow, Repsol's role as a tool for Spanish state policy means the company cannot simply pull out of Bolivia.