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 News from Around the Americas | May 2006 
Latin American Leaders to Meet Urgently on Bolivan Gas Nationalisation
 AFP
| | Bolivia's new President Evo Morales, seen here on April 28, is due to hold an emergency meeting on Thursday with the leaders of Brazil, Argentina and Venezuela following his sudden decision to nationalize his country's vast natural gas industry.(AFP/File/Adalberto Roque) |
Bolivia's new president Evo Morales is due to hold an emergency meeting on Thursday with the leaders of Brazil, Argentina and Venezuela following his sudden decision to nationalize his country's vast natural gas industry.
"We have agreed to a meeting," Venezuelan President Hugo Chavez confirmed late on Tuesday. "We will be in Puerto Iguazu (Argentina) on Thursday morning."
Morales announced on Monday that foreign energy companies had 180 days to negotiate new contracts with the state-run oil firm, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), triggering concerns among foreign investors and other Latin American governments.
In the latest reactions, the European Union on Wednesday urged Bolivia to "proceed in a manner that maintains investor confidence," and to engage an "effective dialogue" with the multinational oil and gas firms affected by the decision.
Spanish Foreign Minister Miguel Angel Moratinos rang Morales early on Wednesday and Madrid subsequently announced it was sending a team of politicians and technicians to La Paz to work out the consequences for Spanish oil firm Repsol.
Morales' nationalization decision has helped keep world oil prices hovering near all-time highs.
On Wednesday morning London's Brent North Sea crude for June delivery was trading at 74.45 dollars per barrel, just off Tuesday's all-time high of 74.97 dollars.
New York's main contract, light sweet crude for June delivery, was at 74.51 dollars per barrel.
The takeover particularly affects Brazil and Argentina, which rely heavily on Bolivian gas. Brazil sources more than half its natural gas from its Andean neighbor, and some Brazilian states are 100-percent dependent on Bolivian gas.
Acknowledging the uproar the move had caused, Morales sought on Tuesday to assuage fears about supplies and potential expropriations.
He promised Bolivia would "guarantee gas (supplies) to Brazil and Argentina" and told Venezuela's Telesur television: "This nationalization is of natural resources... There is no confiscation nor expropriation of company property... Their installations will continue to be their installations."
While it has only a small amount of oil and does not export it, Bolivia's gas reserves are the second largest in Latin America after Venezuela and the nationalization move is expected to affect about 20 foreign oil companies.
These include the world's largest oil and gas company ExxonMobil, Brazil's state-run Petrobras, Spain's Repsol, Britain's BP and British Gas, and French group Total. Several of these companies have already voiced concerns.
Petrobras, which is the largest foreign investor in Bolivia and manages 75 percent of its gas exports, held an emergency meeting with the Brazilian cabinet and president on Tuesday. It also wrote to Morales voicing its disquiet and said it would act to protect its interests in Bolivia.
Both Morales and Brazilian President Luiz Ignacio Lula da Silva, who are left-wing allies, sought to play down any talk of a rift, while at the same time defending their national interests.
"We perfectly understand their concerns," Morales told Telesur of Petrobras. "We are allies of Brazil, and Brazilians will continue to benefit from Bolivian gas," he promised.
At the same time he acknowledged his decision would affect foreign investors "economically" because they would no longer control the production chain from the gas field onwards.
Lula said Bolivia had the sovereign right to nationalize its natural wealth. He promised to "act firmly and calmly ... to defend Petrobras' interests and ... guarantee a balanced and mutually beneficial releationship for both countries".
Bolivian Vice President Alvaro Garcia Linera said on Tuesday new contracts -- which will make state-run YPBF a majority shareholder -- were needed to make the Bolivian oil firm a money-maker.
He said it was needed to ensure foreign gas companies no longer made "abusive" profits in South America's poorest nation.
Oil and Gas Minister Andres Soliz said fields operated normally Tuesday, but under government supervision. That will continue, he said, "as long as there is no resistance from the oil and gas companies to comply with the nationalization decree". |
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