Law For The Promotion For Investment In Exploration And Exploitation Of Hydrocarbon.

Original Language Title: LEY DE PROMOCIÓN PARA LA INVERSIÓN EN EXPLORACIÓN Y EXPLOTACIÓN HIDROCARBURÍFERA .

Read the untranslated law here: http://www.gacetaoficialdebolivia.gob.bo/index.php/normas/verGratis_gob2/153472

Law No. 767 law of 11 December 2015 EVO MORALES AYMA President constitutional of the PLURINATIONAL State of BOLIVIA, when, the plurinational Legislative Assembly, has sanctioned the following law: the Assembly Legislative PLURINATIONAL, DECREES: law of promotion for the investment in exploration and exploitation hydrocarbon chapter I provisions general article 1. (OBJECT). This law aims to promote investment in the activities of exploration and exploitation of hydrocarbons, same that are declared of national interest in the entire territory of the plurinational State of Bolivia.
Article 2. (SCOPE). This law has the following scope: i. the contracts subscribed oilfield services and to subscribe, when crude oil is the main hydrocarbon produced in the Area or Areas of operation within the contract area.
II. contracts subscribed oilfield services and to subscribe, when Natural Gas is produced in the Area or Areas of exploitation main hydrocarbon selected within the contract area.

III. activities of exploration and exploitation of hydrocarbons by Yacimientos Petrolíferos Fiscales Bolivianos - YPFB in a direct way.
Article 3. (SCOPE OF APPLICATION). They are subject to the application of the provisions laid down in this law, national legal persons or foreign, carrying out activities of exploration and exploitation of hydrocarbons in the forms set out in the existing legal system.
Article 4. (PURPOSE). This law aims to promote investments that will allow to increase reserves and production of hydrocarbons in the country through economic incentives to ensure the safety, sustainability and energy sovereignty in the country.
Article 5. (DEFINITIONS). In addition to the definitions laid down in the law N ° 3058 of 17 May 2005, of hydrocarbons, for purposes of the application of this law, the following definitions are established: field of dry Gas. It is that which has hydrocarbons that are in gaseous form in the reservoir and does not condense on surface or generates a minimum amount of liquid.

Condensate. Mixture of hydrocarbons which is in a gaseous state at original reservoir conditions and that conditions of pressure and surface temperature is obtained in liquid state associated with natural gas production.

Oil services contract. They are subscribed contracts or to subscribe by YPFB with public, mixed or private, Bolivian or foreign companies, whose main purpose is the exploration and exploitation of hydrocarbons in return for a fee or payment for their services.

Gas field. Is that field that produces natural gas as main hydrocarbon, with a ratio of Gas/oil more than three thousand five hundred (3,500) cubic feet of gas per barrel and whose condensate associate have one greater than 55 ° API gravity? American Petroleum Institute.

Marginal gas field. It is that field developed gas, which has produced ninety percent (90%) or more of its proved reserves in situ gas, as a result whereof is in decline in its production stage, by natural depletion of its power.

Small gas field. It is that developed gas, whose level of bonded production of gas, condensate associated and natural gas, expressed in monthly daily average flow of barrels of oil equivalent, is equal to or less than three thousand five hundred (3,500) barrels per day equivalent of natural gas, condensate associate and natural gasoline. Any field which has remnants of natural gas (proven reserves - Gas separator) with reserves greater than zero point five (0.5) trillion cubic feet can be classified as small gas field.

Oil field. It is the field which produces oil and hydrocarbon equal to three thousand five hundred (3,500) cubic feet per barrel or main, with a severity less than or equal to 55 ° API and a smaller Gas/oil ratio.

Petroleum crude oil. It is the portion of the oil that exists in the liquid phase in natural underground reservoirs and remains liquid at atmospheric temperature and pressure.

Chapter II incentives to promote investment in the activities of exploration and exploitation of hydrocarbons article 6. (INCENTIVE TO THE PRODUCTION OF CRUDE OIL).
I settle incentives applicable to production per barrel of crude oil: in traditional area, the incentive will be determined based on the international price of oil subject to regulation and will have a minimum amount of 30 $us/Bbl and maximum of 50 $us/Bbl.

In non-traditional zone, the incentive will be determined based on the international price of oil subject to regulation and will have a minimum amount of 35 $us/Bbl and maximum of $55 us/Bbl. II. The incentive per barrel of crude oil, within the margins set out in subparagraphs a) and b) of the first paragraph of this article, will be variable and will be subject, at least, to the international price of crude oil and production, in order to fulfill the purposes of this Act.
III. the incentive to the production of oil, shall apply only when the production is assigned to the internal market and will be adjusted in the event of a modification of the conditions of the internal market for crude oil price.
Article 7. (INCENTIVE TO CONDENSATION ASSOCIATED WITH NATURAL GAS PRODUCTION).
I establish incentives applicable to the production of condensate associated natural gas resulting from the exploitation of new fields or new reservoirs of natural gas discovered from the publication of this law: in traditional area, the incentive will be determined based on the international price of oil subject to regulation and will have a minimum amount of 30 $us/Bbl and maximum of 50 $us/Bbl.

In non-traditional zone, the incentive will be determined based on the international price of oil subject to regulation and will have a minimum amount of 35 $us/Bbl and maximum of 55 $us/Bbl.
The II. incentive per barrel of oil, within the margins set out in subparagraphs a) and b) of the first paragraph of this article, will be variable and will be subject, at least, to the international price of crude oil and production, in order to fulfill the purposes of this Act.
III. the incentive to the production of the associated natural gas, condensate applies only when the production is assigned to the internal market and will be adjusted in the event of a modification of the conditions of the price of the domestic market for the condensate.
Article 8. (TERM AND CONDITIONS FOR THE APPLICATION OF THE INCENTIVE TO CONDENSATION ASSOCIATED WITH NATURAL GAS PRODUCTION).

I. the incentive in traditional area, established in article 7 of this law, will have a duration of up to twenty (20) years, from the regular commercial production, which will be defined according to technical and economic criteria, to be regulated by Supreme Decree.
II. the incentive in non-traditional zone, established in article 7 of this law, will have a duration of up to twenty-five (25) years from regular commercial production, which will be defined according to technical and economic criteria, to be regulated by Supreme Decree.
III. to be eligible for the incentive established in article 7 of this law, contracts for oilfield services that are with effective date to the publication of this law, must necessarily begin exploratory drilling activities prior to January 1, 2019.
IV. to be eligible for the incentive established in article 7 of this law, contracts for oil services in traditional area, with effective date subsequent to the publication of this law, must necessarily begin drilling exploratory maximum until the end of the fourth year of the contract, from the effective date.
V. In order to benefit from the incentives provided for in article 7 of this law, contracts for oil services in non traditional zone, with effective date subsequent to the publication of this law, must necessarily begin exploratory drilling maximum until the last day of the fifth year of the contract, from the effective date.
VI. for purposes of the application of paragraphs III, IV and V of this article, it refers to start exploratory drilling, as the date of removal, transfer and Assembly - DTM, appropriate drilling equipment.
Article 9. (ADDITIONAL PRODUCTION INCENTIVES OF CONDENSATE NATURAL GAS ASSOCIATED).
I established an incentive applicable to the additional production of condensed associated gas natural, from fields that are in operation to the date of publication of this law.
II. the parameters for the application of the incentive will be established according to a baseline, which shall consider, at least, the current reserves and additional investments to the YPFB, approved in accordance with regulation by Supreme Decree.
III. the incentive will have a minimum amount of 0 $us/Bbl and you can achieve a maximum amount of 30 $us/Bbl, and shall apply to traditional area. The amount of the incentive will be variable and will be subject, at least, the international price of crude oil.

IV. the incentive to the further production of the condensate associated with natural gas only applies when the production is assigned to the internal market and it will be adjusted in the event of a modification of the conditions of the price of the domestic market for the condensate.
V. The fields can benefit from this incentive for a period of up to ten (10) years from the publication of this law, in accordance with the update of the Development Plan to be approved by YPFB, which incorporates the line base established in paragraph II of this article.

Article 10. (DETERMINATION OF THE INCENTIVE TO FIELDS GAS WITH RESERVOIRS OF DRY GAS, MARGINAL OR SMALL FIELDS). The incentive for those fields classified as gas fields with reservoirs of Gas dry, marginal or small, will consist of the priority allocation of export markets of natural gas according to parameters and procedures set out in regulation by Supreme Decree.

Chapter III promotion in exploration investment fund and oil article 11. (FUND FOR PROMOTION TO INVESTMENT IN EXPLORATION AND EXPLOITATION OF HYDROCARBON - FPIEEH). Creates the promotion fund for investment in exploration and exploitation oil - FPIEEH with proceeds from the direct tax on hydrocarbons - HDI, to encourage the exploration and exploitation of hydrocarbons in the plurinational State of Bolivia.
Article 12. (THE FPIEEH FINANCING).
I. the FPIEEH will be financed with the twelve percent (12%) of the proceeds of the HDI, prior to distribution to the autonomous territorial entities, public universities and all the intended beneficiaries in the law N ° 3058 of May 17, 2005, law N ° 3322 of 16 January 2006, and regulatory Supreme decrees, applicable on HDI resources collected from the month of January 2016 management Whereas bonded production in the month that corresponds, according to current regulations.
II. the revenues obtained by the application of this law, shall be distributed among all the beneficiaries in accordance with current regulations.
Article 13. (MANAGEMENT AND INVESTMENT OF RESOURCES OF THE FPIEEH).

I the FPIEEH resources will be paid automatically to an account at the Central Bank of Bolivia - BCB.
II. the resources of the FPIEEH will be in the custody of the BCB, this can invest these resources in financial instruments, following the guidelines established for the Administration and investment of the reserves, ensuring the liquidity of the FPIEEH. Yields on investments should be incorporated into the FPIEEH.
III. the resources of the FPIEEH and the yields they generate as a result of the investment, will not be subject to the payment of taxes, liens, rights and others of any nature established in the plurinational State of Bolivia and will not be object of commissions for foreign currency transfers from abroad or by the BCB.
IV. the resources of the FPIEEH and the yields they generate as a result of the investment, are unattachable and may not be subject to precautionary, administrative or judicial measures.
V. The resources of the Fund will be used only against the production of oil or condensate resulting from activities subject to the scope of the present law, ensuring that these economic resources, after the sale of hydrocarbons, generate revenues for all recipients, successful exploration and exploitation.
VI. A termination of the application of incentives, the balances remaining from the FPIEEH, will be distributed among the beneficiaries of the HDI in the percentages of participation of such duty, set out in current regulations.
VII. This provision will be regulated by Supreme Decree.



Chapter IV resources for the financing of incentives for investment in exploration and exploitation of hydrocarbon article 14. (RESOURCES AND PROCEDURE FOR THE INCENTIVES TO THE PRODUCTION OF CRUDE OIL).
I. the financing of the incentives applicable to crude oil production for existing in traditional and non-traditional zone fields, shall be carried out through the issuance of tax credit - NOCRE completo notes.
II. Las NOCRE completo shall be issued by the Ministry of economy and finance, at the request of YPFB, prior authorization from the Ministry of hydrocarbons and energy, on the basis of the results obtained from the application of article 6 of this law.
III. the financing of the incentives applicable to the production of crude oil to new fields in traditional and non-traditional zone, shall be made through resources from the FPIEEH.
IV. application of paragraph III of this article, the Ministry of economy and finance, at the request of YPFB, will assign the FPIEEH resources, prior authorization from the Ministry of hydrocarbons and energy, on the basis of the results obtained from the application of the calculation formula established in the regulatory Supreme Decree.
Article 15. (RESOURCES AND PROCEDURE FOR THE ADDITIONAL PRODUCTION INCENTIVES OF CONDENSATE NATURAL GAS ASSOCIATED).
I financing incentives applicable to the additional production of associated Natural Gas, condensate shall be made through resources from the FPIEEH.
II. the Ministry of economy and finance, at the request of YPFB, prior authorization from the Ministry of hydrocarbons and energy, will be assigned the resources of the FPIEEH, on the basis of the results obtained from the application of the calculation formula established in the regulatory Supreme Decree.
Article 16. (RESOURCES AND PROCEDURE FOR THE INCENTIVES TO THE PRODUCTION OF CONDENSATE NATURAL GAS ASSOCIATED). Funding from the incentives applicable to the production of condensate associated with natural gas, the result of new fields or reservoirs discovered, shall be carried out through the FPIEEH in accordance with the following procedure: the Ministry of economy and finance, at the request of YPFB, prior authorization from the Ministry of hydrocarbons and energy, will be assigned the resources of the FPIEEH, on the basis of the results obtained from the application of the calculation formula established in the regulatory Supreme Decree.

In case that the FPIEEH resources are insufficient to provide the incentive, it authorizes the Ministry of economy and public finance issue NOCRE's as a mechanism for ensuring the energy security of the country.

The emission of NOCRE's will be conducted by the Ministry of economy and finance, at the request of YPFB, prior authorization from the Ministry of hydrocarbons and energy, on the basis of the results obtained from the application of the formulas set out in the regulatory Supreme Decree.
Article 17. (MODE OF CONTRACTS).
I for the execution of exploration and exploitation activities, YPFB will sign, both in reserved areas and in free areas, contracts of oil services companies public, mixed or private, Bolivian and foreign, under any of the existing contractual arrangements.
II. the Ministry of hydrocarbons and energy, will establish the guidelines for the signing of these contracts and the selection of companies, by Ministerial resolution.
Article 18. (PROCESSING OF CONTRACTS). The process of negotiation, authorization and approval of contracts for oil services, must be prioritised in the administrative and legislative level.
Article 19. (INCENTIVES FOR YPFB). When YPFB exploration and exploitation of crude oil and natural gas, you benefit from the incentives established in the present law, whose operating conditions shall be determined in regulations.
SOLE TRANSITIONAL PROVISION.
I. the present law, as appropriate, shall be regulated by Supreme Decree, within a period of up to ninety (90) calendar days from its publication.
II. oil service contracts authorized and approved by the plurinational Legislative Assembly, prior to the promulgation of this law, shall retain terms with which were approved with respect to the new defined areas.

III. insofar as article 6 of this Act, regulate stays current implementation of Supreme No. 1202 Decree of April 18, 2012.
IV. by decree a new delimitation of the traditional and non-traditional zone, will take place within a period of up to ninety (90) calendar days from the publication of this law.
SOLE FINAL PROVISION. It modifies and complements the third paragraph of article 42 of the law N ° 3058 of May 17, 2005, of hydrocarbons, with the following text:

"If the fields of the area of the operation contract were in commercial production regular time completed the term of the contract, YPFB will operate them itself, and, upon justification of YPFB, will operate it through a contract under the regime for the provision of services or the holder of the contract through the subscription of an addendum for the only time, whose term will be to exploit the reserves proven certified within the period of the main contract. In the latter case, the addendum will be signed within the period of up to five (5) years prior to the termination of the contract of head operation, and YPFB negotiated for this purpose new technical, economic conditions provided that they agree to the interests of the State. Once become effective subscription of the addendum, and for the purposes of approval, it shall be forwarded to the plurinational Legislative Assembly."
SOLE ABROGATION AND REPEAL PROVISION.
I repealing article 4 of Supreme Decree No. ° 29130 of May 13, 2007, amended by the Supreme Decree No. 0459 March 24, 2010.
II. appeal and repealing all provisions contrary to this law.
Refer to the Executive Body for constitutional purposes.
Two thousand and fifteen is given in the room sessions of the Assembly Legislative plurinational, nine days of the month of December of the year.
FDO. José Alberto Gonzales Samaniego, Lilly Gabriela MONTAÑO Viana, Ruben Medinaceli Ortiz, Maria Argene Simoni Cuellar, A. Torrez Diez, Erik Moron Claudia Osinaga.

I therefore enacted it is and meets as a law of the plurinational State of Bolivia.
Government Palace of the city of La Paz, to the eleven days of the month of December of the year two thousand and fifteen.
FDO. EVO MORALES AYMA, Juan Ramón Quintana Taborga, Luis Alberto Arce Catacora, Felix Cesar Navarro Miranda Minister of mining and metallurgy and acting of hydrocarbons and energy, Ana Veronica Ramos Morales.