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Reserves mess adds urgency to the need for reform

Repsol YPF's reserves write-downs in South America are not just a disaster for the company. Unless the region's governments take action, the reliability of natural gas supplies across the continent could be under serious threat. Robert Olson writes

THE 25 January announcement by Repsol YPF that it was downgrading some 25% of its proved reserves of oil and gas did not come as a complete surprise. The election of a government in Bolivia whose manifesto had included a promise to nationalise the country's oil and gas assets had already raised serious questions about the Spanish firm's reserves base. It had also all but killed off hopes of revising the country's onerous new Hydrocarbons Law, which increased wellhead taxes to 50%, from 18% under the previous regime. With a quarter of its proved reserves in Bolivia, Repsol YPF was far more exposed to the country than any of the other big investors – including Petrobras, Total and BG Group –

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