alternative reader no. 129
Bolivia Defends Gas Industry Takeover
Bolivia has
defended its decision to nationalise its natural resources amid concern
and criticism from Europe and oil and gas companies.
BY AL
JAZEERA
Posted by Bulatlat
Evo
Morales, the Bolivian president, ordered soldiers to "guard" oil and gas
fields on Monday until terms for nationalising the industries are agreed
with foreign companies.
The move provoked concern from the Spanish government and Repsol, one of
the biggest foreign investors in Bolivia.
The Spanish foreign ministry released a statement on Tuesday expressing
"deep concern about the measure and the possible consequences for
bilateral relations. This concern also extends to the ways this measure
was adopted".
Antonio Brufau, the chairman of Repsol, speaking on Argentinian radio,
said: "It's an unjust measure against the international companies that
have been working in Bolivia."
Luiz Inacio Lula da Silva, the Brazilian president, said: "Bolivia has a
vast situation of poverty, and it is fair that the president of Bolivia
defends interests to improve the quality of life of his people."
However, his spokesman confirmed on Tuesday that Lula will consult other
South American leaders on the situation.
'Normal profits'
Alvaro Garcia Linera, the Bolivian vice-president, defended his country's
economic stance.
"The [international gas] companies are going to keep making money, but
now they will be normal profits," he said on Bolivian television.
"Before
the decree, operating in Bolivia was like winning a lottery because their
profits were abusive."
It was
not immediately clear if or how production would be affected by Morales'
order.
Troops
seized 56 oil and gas fields after the nationalisation decree. Bolivia
holds Latin America's second largest gas reserves after Venezuela.
Under the decree, the state-run Yacimientos Petrolíferos Fiscales
Bolivianos (YPFB) will become the majority shareholder in reformed
corporations.
Andres Soliz, the Bolivian oil and gas minister, said fields were
operating normally, but under government supervision. That will continue,
he said, "as long as there is no resistance from the oil companies to
comply with the nationalisation decree".
Constraints
The nationalisation of the Bolivian energy industry is a fresh blow to
international oil companies already facing increased constraints imposed
by oil-and gas-rich countries anxious to exert greater control over access
to their resources.
The move by Morales is part of "a nationalist movement in the oil and gas
sector in Latin America, led by Venezuela and Brazil, that could spread to
Mexico," said Nicolas Sarkis, an industry expert with the publication
Petrole et Gaz Arabes.
"Before the
decree, operating in Bolivia was like winning a lottery because their
profits were abusive"
Sarkis said the Bolivian nationalisation was "a worrisome sign for the
future, since countries where companies can operate freely are becoming
fewer and fewer".
Russia, which sits on huge natural gas reserves, authorises foreign
investment - but on condition that Russian groups hold 51% of the
exploration contracts.
In Iran,
the world's fourth largest oil producer, the constitution forbids the
granting of concessions to foreign companies in order to safeguard
national access to the country's resources.
Logical
Even in producers such as Saudi Arabia where there is no legislation
severely constraining oil firms, foreign oil companies in general are
obliged to form partnerships with local enterprises, according to sources
at one international oil group.
For
Pierre Terzian of the magazine Petrostrategies, the Bolivian decision is
"logical" at a time when crude oil prices are over $70 a barrel.
Each time crude prices surge, oil producers hike taxes to ensure that the
oil companies are not alone in enjoying healthier profits, he said.
"For the first time in history this is happening at a moment when the
world has a great need to increase investment in new production
capacities."
But he sought to put the Bolivian overture in historical context, noting
that in previous nationalisation movements, such as in Iraq and Algeria in
the 1970s, "the big companies always adapted".
2 May
2006
Posted by
Bulatlat
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