Bolivia reached a “friendly” agreement Aug. 8 to compensate Royal Dutch Shell for its stake in the nationalized gas pipeline company Transredes. The accord was signed by Energy Minister Carlos Villegas and Shell representative Jose Maria Linardi in the presence of President Evo Morales. The amount of the deal for Shell’s stake in Transredes was not divulged by officials, but reports put the sum at $120.57 million. Bolivia’s state-owned YPBF now assumes a 98% stake in Transredes, with the other 2% held by private partners. “YPBF has become owner of Shell’s share in Transredes at a price established by the national government,” Villegas said.
The deal did not include another stake-holder in Transredes, Ashmore Energy International (of Houston), which is demanding a $500 million payout from Bolivia in a case before the Arbitration Institute of Stockholm’s Chamber of Commerce. Shell and Ashmore together owned 50% of Transredes through a joint company, TR Holding, before it was nationalized. (AFP, EFE, Aug. 9)
US court rules for Bolivia!
Federal Judge Laura Swain of the Southern District of New York ruled July 30 that European investors in Bolivia’s national telephone company Entel, whose shares were nationalized May 1, had no right to seize any Bolivian assets in US banks. Full access to the funds were ordered restored to Bolivia.
The European concern, ETI—a Dutch subsidiary of an Italian firm itself owned by Telecom Italia—had filed for arbitration against Bolivia with the International Center for the Settlement of Investment Disputes (ICSID), the arbitration arm of the World Bank, demanding compensation of more than $500 million. On May 5, four days after the nationalization decree was issued by President Morales, the investor group appeared ex parte in courts in totaling more than $90 million. Judge Swain ruled that ETI had no right to freeze any assets prior to the final outcome of what is expected to be a lengthy arbitration process. On July 11, a similar order was issued by the High Court in London. (Foley Hoag press release, Aug. 1)
See our last post on Bolivia.