Posted on 05/01/2006 9:08:11 PM PDT by Aussie Dasher
PRESIDENT Evo Morales ordered the military to occupy Bolivia's natural gas fields overnight after nationalising the industry and threatening to expel foreign companies that do not recognize state control.
Bolivia has the second-largest natural gas reserves in South America after Venezuela, and disputes over how the impoverished country should manage those riches have sparked several popular revolts since 2003. Ms Morales became president in January on vows to exert more state control over natural resources, reflecting a growing backlash against free markets and foreign investment in Latin America.
The president chose Labor Day, May 1, to announce the nationalisation, which stipulates companies will have to leave Bolivia unless they sign contracts within six months recognizing state control.
"This is just the start ... tomorrow or the day after it will be mining, then the forestry sector, and eventually all the natural resources for which our ancestors fought," Ms Morales told a jubilant crowd in La Paz's main plaza.
She ordered the armed forces and "battalions of engineers" to occupy energy fields after signing a decree earlier in the day at the San Alberto field in Tarija province, operated by Brazil's state-owned Petrobras.
Officials from state energy company YPFB and the military took control of dozens of installations, including gas fields, pipelines and refineries, and the Government said it would guarantee production and exports.
Morales had long pledged to nationalize the sector but said repeatedly he would not expropriate companies' assets.
Bolivia's actions echo what Venezuelan President Hugo Chavez, a Morales ally, did in the world's fifth-largest oil exporter with forced contract migrations and retroactive tax hikes – conditions that oil majors largely agreed to accept.
"This is a continuation of the trend towards increasingly aggressive resource nationaliSation that we have seen across many countries in Latin America, starting in Venezuela," energy analyst Antoine Halff of Fimat said.
"The measure is in line with the populist tone of the new regime in Bolivia; however, how it is carried out in practice still seems somewhat unclear," Mr Halff said.
The government decree says "the state recovers ownership, possession and total and absolute control" of hydrocarbons.
This means the state will own and sell these resources, relegating foreign companies to operators. Previously, Bolivian law said the state no longer owned the gas once companies extracted it from underground.
YPFB will pay foreign companies for their services, offering about 50 per cent of the value of production, although the decree indicated that companies at the country's two largest gas fields would get just 18 per cent.
Top investors in Bolivia's gas industry include Petrobras – which controls more than 45 per cent of Bolivia's gas fields – Spain's Repsol YPF, France's Total and British gas and oil producer BG Group Plc. YPFB alone has no way of financing the development of gas fields.
Spain's foreign ministry said yesterday it was deeply concerned about Bolivia's actions. Repsol said it was too early to evaluate the decree and a Total spokeswoman said the same. BG officials were not immediately reachable.
Petrobras President Jose Sergio Gabrielli told Brazil's Globo Television Network: "The decree is imprecise and is open to various interpretations about how it will be applied. We will take all possible steps to ensure that the Brazilian market is supplied with gas.
"There's no way that new investment in gas production with 18-percent return can be viable, these conditions make gas operations practically impossible in Bolivia."
Brazilian President Luiz Inacio Lula da Silva called an emergency meeting with Mr Gabrielli and government ministers for today.
In the decree, Bolivia also gave YPFB majority control in companies Chaco and Andina, gas transport firm Transredes and two refineries owned by Petrobras. "These are in fact cases of expropriation," Bolivian analyst Gonzalo Mendieta said.
South America's poorest nation, Bolivia has reserves of about 48.7 trillion cubic feet and exports most of its gas to Brazil and Argentina. Foreign companies have invested more than $US3 billion ($3.97 billion) in the past decade, much of it in exploration.
Bolivian Vice President Alvaro Garcia said the government's energy-related revenue would jump to $US780 million next year, expanding nearly sixfold from 2002.
It is pretty amazing to see the same thing happen over and over - always with the same result...
They think they're poor now, just wait a few years...
Workin' that highly successful North Korean economic model.
They're all busy leaking secrets to the media to discredit the Bush adminstration.
There’s an old joke about Bolivia and God’s allotment of minerals, which diplomacy and amnesia forbid.
And this little campesino will be begging the international community for aid.
Bolivia is dirt poor, and this will take all the incentive out of production.
"There’s an old joke about Bolivia and God’s allotment of minerals, which diplomacy and amnesia forbid.
"
I was just thinking how funny God's Creation plan was - to put so much of this important resource in the hands of such unstable, maniacal people.
Certainly not very Intelligent.
Bolivian Vice President Alvaro Garcia said the government's energy-related revenue would jump to $US780 million next year, expanding nearly sixfold from 2002.
Bwhahahahahaha!!!!! Last time I checked, lamas and soliders don't know much about natural gas drilling.
well, thast funny, i bet chinese engineers do
china gets their oil yet again
Bolivia seeks Chinese investment
Evo Morales, right, shakes hands with Chinese minister, Wang Jiarui
Mr Morales has worn his trademark informal clothes
While on a visit to Beijing, Bolivia's President-elect, Evo Morales, has invited China to help develop his country's energy sector.
One of Mr Morales' economic advisers said China could be interested in converting Bolivia's natural gas into environmentally friendly diesel.
http://news.bbc.co.uk/2/hi/americas/4593202.stm
So Bolivia has vast mineral wealth, state ownership of wealth and communism.
Sounds a lot like the old Soviet Union. We it worked for the Soviets, I guess it will work for Bolivia too.
/sarcasm
I am not a chem-e, but I gotta say WTF? Natural gas can be converted to diesel only by Chinese people using special alchemy rigs...
File with a Divine joke in doubtful taste, God's grant of oil to Muslims and not us Jews.
Commies are always trying to skate uphill rather than picking up a history book.
Oh this time, it will be different!!! We won't become a poverty stricken abyss like every other country that adopted communism.
yeah well, exxon oil is spending 6billion dollars to turn NG into diesel in Qatar
so yes chinese can turn NG into diesel its super clean even tree huggers in cali would love it
also a side note, chinese leaders have degrees in engineering our leaders are laywers
I'm glad my employer sold our South American telecom business. It's only a matter of time before all utilities are nationalized.
Actually, Bush has an MBA and Frist is a doctor and Hastert was a teacher.
I had no idea the chinese leaders were engineers until about a month ago when I saw an old friend I trust show up on Cspan and said so. I'm impressed that you knew that though.
The freaking dateline is Bolivia and yet the reporter can't decide whether or not Evo is a male or female.
Since he's a lefty, perhaps he's a switch hitter. Maybe the reporter does know something.
I wouldn't want to be a Petrobras stockholder tomorrow.
I've had my suspicions that Chavez was a poofter.
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