Transredes SA

cancelled

Empresa Transportadora de Hidrocarburos SA (Transredes SA) was created from the transmission assets of Yacimientos Petroliferos Fiscales Bolivianos (YPFB), a state-owned company. Transredes owned 2,664km of gas transmission pipelines, 2,315km of oil/liquid pipelines, and an important participation in the Bolivian Brazilian gas pipeline. Transredes owned 51% of the Bolivian side of the project through its participation in a joint venture with Enron International which consequently owned 34% of the Bolivian part. Transredes owned a 12% of the Brazilian part of the project and 8% belonged to Enron International, through the same joint venture. The company was created in 1997, when a 50% equity stake was transferred to Enron International (a 25% equity stake) and Shell International (a 25% equity stake) for an equally shared equity investment of $263.5 million. The privatization reached financial closure in May 1997. The remaining interest in Transredes was transferred to Bolivian pension funds (34%) and to current and former employees of YPFB (16%). As of 2005, Enron still controlled 25% of Transredes and was in the midst of liquidating its operations and distributing its assets to its creditors. As of October 31, 2006, Enron had liquidated its assets and Ashmore Energy International controlled 25% of Andina SA while Shell controlled 25%. Due to Bolivian President Morales’ announcement in May that Bolivia would nationalize all hydrocarbon producing facilities, the combined share of both companies was to be reduced to a minimum 49% in order to allow state-run oil and gas company, Yacimientos Petroliferos Fiscales Bolivianos (“YPFB”)a 51% share. This change had not yet reflected in 2006 reports. As of December 31, 2007 the shareholding structure of Transredes consisted of Shell 25% AEI 25%, YPFB 33.57% and Others 16.43%. In May 2008, the Bolivian federal government issued an expropriation decree declaring that the AEI was to sell all of its stake in Transredes SA. A settlement concerning the share price was made in October 2008, in which YPFB would pay US $120 million to AEI for its shares. Half of the price was paid in October 2008. The same arrangement was made with Shell for its 25% stake. The resources from the equity investment were used for infrastructure investments by Tranredes: a total of US$ 230 million was invested in the 1997-1999 period (average of US$ 76.7 million per year), and the remaining US$ 33.5 million was scheduled to be invested in 2000.