What happens if political ambition clashes with business interest? Bolivia would know. The country is witnessing a growing disapproval of oil companies and President Carlos Mesa is desperate to maintain his popularity. Encouraged by a recent referendum on gas exports, Mesa's government is drafting a new hydrocarbons bill that has raised concern in oil companies. His predecessor Snchez de Lozada had lost his job due to an unpopular decision on gas exports.
In the latest published draft of the bill, the government proposes to levy a Complementary Tax on Hydrocarbons, which would increase the tax on the income of oil companies to 50 per cent. It has also suggested that the companies should "migrate" or adapt to new contracts with new investment rules. The government has already halted negotiations for exporting gas through Chile and is considering other options. The 13 foreign companies that explore and drill oil and gas in the country have opposed the draft law. Bolivia's National Hydrocarbons Chamber, which represents them, has termed it a confiscation" of property.
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