|
Bolivia nationalizes natural gas industry Evo Morales gives companies six months to sign new contracts; production to be turned over to YPFB for sale, industrialization ALVARO ZUAZO Associated Press Writer
President Evo Morales decreed the nationalization of Bolivia’s natural gas industry May 1, threatening to evict foreign companies that tap all of the country’s petroleum unless they sign new contracts within six months giving control of the industry to the Bolivian state.
“The time has come, the awaited day, a historic day in which Bolivia retakes absolute control of our natural resources,” Morales said from the San Alberto petroleum field in southern Bolivia operated by Brazil’s Petroleo Brasileiro SA in association with the Spanish-Argentine Repsol YPF SA.
Bolivia has South America’s second largest natural gas reserves after Venezuela, and all foreign companies must turn over most production control to Bolivia’s cash-strapped state-owned oil company, Yacimientos Petroliferos Fiscales Bolivianos, Morales said.
Foreign companies were also told that their production would be turned over to YPFB for sale and industrialization.
Multinational companies that produced 100 million cubic feet of natural gas daily last year in Bolivia will be able to retain only 18 percent of their production, with the rest being given to YPFB, he said. Morales did not name the companies.
Other major petroleum companies doing business in Bolivia include Britain’s BG Group PLC and BP PLC; France’s Total SA; and U.S.-based Exxon Mobil Corp.
Negotiations to begin immediately Morales said the government would begin negotiations immediately with the companies to make sure they are willing to comply, but said they could be stripped of their privilege to operate in Bolivia if they don’t sign contracts within the six-month deadline.
YPFB used to produce Bolivia’s natural gas, but was reduced to an administrative capacity in the mid-1990s after the country’s gas exploration and production business was privatized. Experts have warned that the company is incapable of becoming a producer again without a massive infusion of cash.
Morales, a strident leftist, won the presidency in a landslide late last year after saying the country’s natural resources had been “looted” by foreign companies and must be nationalized so Bolivians benefit and profits are no longer sent overseas.
Morales chose May 1, International Day of the Workers, to announce the nationalization plan, wearing a miner’s helmet as he gave his speech. After he spoke, a soldier unfurled a Bolivian flag from atop the natural gas installation.
Morales also said the state would retake control Bolivian hydrocarbons companies that were privatized in the 1990s, with the state taking over shares now in the hands of foreign companies and of semipublic Bolivian entities.
With the nationalization announcement, Morales is following the path of Venezuela’s President Hugo Chavez, his populist political mentor, said Pietro Pitts, editor-in-chief for the Venezuela-based LatinPetroleum.com.
Chavez has also taken moves to exert greater control over his country’s vast petroleum reserves. Most foreign companies have decided to keep producing in Venezuela, though some announced they would abandon some production.
“You can call Bolivia Venezuela Part II because it seems like he (Morales) is going to try to do the same thing that Chavez is doing,” said Pitts, namely giving the state majority control in its fossil fuel wealth.
| 