Pan American Energy LLC and the nationalization of Empresa Petrolera Chaco SA

 
TIDM57UB 
 
 

  On January 23rd, 2009 the Government of the Republic of Bolivia issued Supreme Executive Decree No. 29888, whereby the shares owned by Amoco Bolivia Oil & Gas AB -a subsidiary of Pan American Energy LLC (PAE)- in Empresa Petrolera Chaco S.A. were nationalized, taking control over Empresa Petrolera Chaco. 
 

  Since the execution of Decree No. 28701 dated May 1st, 2006, which established the nationalization of hydrocarbons in Bolivia, PAE held conversations and negotiations aimed at achieving a fair valuation of its participation in Empresa Petrolera Chaco and assure an adequate operation of the company and the preservation of its rights. 
 

  Subsequently, said dialogue led to the analysis of innovative corporate options intending to fit the country's social reality and the need to maintain and expand the hydrocarbon production and reserves in Bolivia. 
 

  The conversations for developing these new corporate options reached encouraging levels of consensus among different players of the Bolivian government and were aimed at creating a cooperation formula aligned with the strategic objectives of the Bolivian Government. 
 

  During these past years, PAE has proven its commitment with Bolivia and the regional energy integration program promoted by its Government. The investment effort made by Empresa Petrolera Chaco positioned the company as a key player for the increase of the natural gas supply for the domestic market and for its exports, especially to Argentina. 
 

  Notwithstanding the new Supreme Executive Decree, PAE ratifies its will to continue its efforts to align its legitimate interests -that it will defend at all levels- with the objectives and interests of the Republic of Bolivia.