View Full Version : Morales To Nationalize Bolivia Oil, Gas

12-21-2005, 05:48 PM
Morales to nationalize Bolivia oil, gas



LA PAZ, Bolivia -- The winner of Bolivia's presidential elections has repeated his vow to nationalize oil and gas and said he will void at least some contracts held by foreign companies "looting" the poor Andean nation's natural resources.

Indian coca farmer Evo Morales said he will not confiscate refineries or infrastructure owned by multinational corporations. Instead, his government would renegotiate contracts so that the companies are partners, but not owners, in developing Bolivia's resources, he said.

"We will nationalize (Bolivia's) natural resources," Morales said at a news conference Tuesday in La Paz.

"Many of these contracts signed by various governments are illegal and unconstitutional. It is not possible that our natural resources continue to be looted, exploited illegally, and as the lawyers say, these contracts are legally void and must be adjusted," Morales said.

Bolivia's proven and potential reserves total 48.7 trillion cubic feet of natural gas, second only to Venezuela in South America, according to the U.S. Department of Energy's Energy Information Administration.

Morales said his government would open talks with governments and company executives, working to strengthen relations with state oil companies.

He has close relations with Venezuela President Hugo Chavez, who is also trying to change the role of foreign oil companies in his country.
With 92 percent of polling stations officially counted, Morales had 54.1 percent of the vote in Sunday's election. He needs a bare majority to win outright and avoid having congress choose between him and conservative rival Jorge Quiroga in mid-January.

Outgoing President Eduardo Rodriguez's administration said it was organizing a transition team in anticipation of Morales' inauguration on Jan. 22.

On Monday, Morales said Brazilian oil company Petrobras must turn two refineries it owns in Bolivia back to Bolivian control.

Morales announced that he had asked Brazilian President Luiz Inacio Lula da Silva to return the refineries, which Petrobras purchased in the last decade. Petrobras bought the two refineries from Bolivia's state-owned oil company in 1999 for roughly $100 million.

Nationalization of hydrocarbons in Bolivia has become the key campaign issue for Morales. But he has not laid out specific plans on how he will manage the nationalization.

Bolivia in May had passed a new hydrocarbons law that raised oil and gas production taxes and royalties to 50 percent, and at least on paper made the state the sole owner of production. But the interim government of President Eduardo Rodriguez never decided how to put the stipulations into practice.

Morales didn't say when or under which terms his government would negotiate new contracts with the energy companies. But he said that contracts with companies found to have been smuggling oil or gas, or dodging taxes in Bolivia, will simply be annulled.

The top investors in Bolivia are Petroleo Brasileiro SA, known as Petrobras, Spain's Repsol YPF, France's Total SA, British Gas and BP PLC . Foreign energy firms have invested $3.5 billion in Bolivia since 1996. But after the passage of the new hydrocarbons law in May, and amid increasing calls for an outright nationalization of the energy industry in Bolivia, they this year have mostly frozen any new investments.