[News] Bolivia Nationalizes Natural Gas Industry

[Anti-Imperialist News]

Bolivia Nationalizes Natural Gas Industry

http://www.nytimes.com/2006/05/01/world/americas/01cnd-bolivia.html?hp&ex=1146542400&en=7011d6fe62928beb&ei=5094&partner=homepage

By 
<http://topics.nytimes.com/top/reference/timestopics/people/h/christine_hauser/index.html?inline=nyt-per>CHRISTINE 
HAUSER
Published: May 1, 2006

Bolivia's President Evo Morales decreed the 
nationalization of the country's natural gas 
industry today, following through on an election 
pledge to increase control over the energy industry.

Under the decision, he ordered foreign firms to 
send production to a state company for sales and 
industrialization, and said that the state will 
also recover Bolivian hydrocarbons companies that 
were privatized in the 1990's, with the state 
taking over shares that are in the hands of 
foreign companies and of semi-public Bolivian 
entities, according to an Associated Press report 
based on Mr. Morales's speech, which was 
delivered at the country's San Alberto gas and oil field.

He also ordered the military to occupy the natural gas fields, the A.P. said.

"The time has come, the awaited day, a historic 
day in which Bolivia retakes absolute control of 
our natural resources," Mr. Morales said from the 
facility, which is operated by Petrobras of 
Brazil in association with Repsol-YPF of Spain, the A.P. said.

The move highlights a regional trend in Latin 
America of a struggle over who controls energy 
resources. Protesters in Bolivia have in the past 
called for the outright expropriation of private 
gas installations operated by British Gas, 
Repsol, and Petrobras. Such protests over energy 
policy have weakened or forced out of power a 
number of presidents in Bolivia, which has South 
America's second largest natural gas reserves.

In the past, Mr. Morales has raised concerns in 
the United States and Europe with his plans to 
increase government control of the energy 
industry, and with his pledges to decriminalize 
the cultivation of coca, the plant used to make cocaine.

Mr. Morales warned that companies that rejected 
the decree would have to leave Bolivia.

He said all the companies must turn their 
production over to the state's Yacimientos 
Petroliferos Fiscales Bolivianos, which was 
privatized in 1996 and 1997, it reported.

Foreign companies with interests in Bolivia also 
include British Petroleum, and Total of France. 
The country likely to be affected the most is 
Brazil, which is the biggest importer of Bolivian 
gas, and has a significant investment in Bolivia through Petrobras.

The State Department official said that he did 
not have a preliminary assessment of the impact 
the new move would have on United States trade 
and its relations with Bolivia. The United States 
gets most of its gas from domestic sources, Canada and Mexico.

The announcement was made on the May 1 national holiday in Bolivia.

"We are trying to get a copy of the proposal and 
we will discuss it with our Bolivian counterparts 
and people at the foreign ministry," said a State 
Department official. "The embassy plans to 
consult with affected U.S. companies."

A spokesman for BP in London, Robert Wine, said 
BP has a very small interest in Bolivia as a 
partner in a joint venture that produces gas 
equivalent to 15,000 barrels of oil, a small 
amount compared to BP's 4 million barrels of oil equivalent per day.

Asked how the decision might change BP's 
interests, Mr. Wine said "We have not seen the 
detail but I am sure our joint venture partners 
will be analyzing it. Our partners who are the 
operators of activities there will be digesting today's news."

The announcement did not come as a surprise.

Mr. Wine noted that there had been political 
turmoil in Bolivia with public protests over the 
industry. "The change is not unexpected, but as 
far as I am aware we were not expecting total nationalization," he said.

Mr. Morales is the country's first indigenous 
president. Since he was elected in a landslide on 
Dec. 18, he has emphasized the message that he 
will lay the groundwork for an economic and 
political transformation that he says will give 
voice to the poor, indigenous majority that fueled his campaign.

There have been other measures affecting the 
sector since Mr. Morales became president.

Last month, moving on a complaint filed by 
leftist groups, Attorney General Pedro Gareca 
charged three former presidents and eight former 
energy ministers with violating the Constitution 
in signing dozens of contracts with foreign 
energy companies over the last decade without 
Congress's approval, Bolivian radio reported, according to Reuters.

The contracts, which included oil companies in 
Brazil, France and Spain, attracted billions of 
dollars in investments, but angered groups that 
accused the firms of plundering Bolivia's resources.

The government is renegotiating contracts that 
will cost the companies much more in taxes and royalties.

In January, just after he was inaugurated, Mr. 
Morales appointed Andrés Solíz Rada, a Marxist 
journalist and former senator, to oversee Bolivia's energy policy.

As president-elect, Mr. Morales met with 
President 
<http://topics.nytimes.com/top/reference/timestopics/people/h/hu_jintao/index.html?inline=nyt-per>Hu 
Jintao of China in Beijing and called China an 
"ideological ally," a day after he invited it to 
develop Bolivia's vast gas reserves.


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