Press
abuzz over Bolivia gas move
Bolivia's vast gas reserves are now under government control
The decision by Bolivian President Evo Morales to place the
nation's gas industry under state control has become the leading
story in many South American newspapers.
Commentators
in Bolivia itself welcome the move, which they believe rightly
gives the government control over a vital and lucrative national
resource.
Elsewhere,
the story is also front-page news, notably in Brazil, which
is one of the most affected nations.
"Tension
between neighbours" runs a headline in the influential
Folha de Sao Paulo.
However
the daily goes on to say that the Brazilian government "avoided
openly criticising Bolivia" and made it clear it believes
that "nationalisation is a sovereign act... Brazil exercises
full control over the riches within its own territory".
'Bluffing'
A
headline in Brazil's Jornal do Commercio says that "Morales
uses bluff as a negotiating lever".
The
paper argues that Bolivia stands to lose large amounts of foreign
exchange if it cuts gas supplies to its major customers.
Rejecting working in harmony with foreign companies can only
lead to economic isolation and the impoverishment of the population
Commentator
in Estado de Sao Paulo
"The Brazilian government believes that Morales is bluffing
in order to hold negotiations. The timescale of 180 days for
foreign companies to adapt to the new framework reinforces this
belief."
Columnist
Suely Caldas, writing in another leading daily, Estado de Sao
Paulo, issues a warning to Mr Morales in a piece headlined "The
price of populism".
"Nationalism
taken to its extreme and rejecting working in harmony with foreign
companies can only lead to economic isolation, a weakening of
productive investment, an inability to generate jobs and the
impoverishment of the population."
In
Argentina, the leading daily Clarin publishes an opinion poll,
showing 42% of respondents feeling the Bolivian move will hit
Argentina, and 30% believing it will impact positively.
Argentina's
La Nacion speaks of "fear over the radicalisation of Morales".
In
Bolivia itself, a headline in La Prensa declares "The petrol
companies moan and make threats, but they'll negotiate".
Historic
La
Paz's El Diario hails the decision as "A Historic Measure".
"Supreme
Decree 28.701 which establishes the nationalisation of the nation's
hydrocarbons constitutes a historic measure of the government
lead by Evo Morales Aima."
"It
returns control over the natural resources to the state."
The eyes of the world are riveted on the person of President
Evo
El
Deber
An editorial in El Deber, which publishes in the lowland and
business-oriented city of Santa Cruz, carries the headline "May
it be for the good".
The
paper argues that Bolivia has long been ignored, neglected or
derided by the wider world, and Mr Morales' initiative has at
last put it on the map.
"The
eyes of the world are riveted on the person of President Evo.
The ears of a world startled by the depth of the changes under
way."
"At
the margin of what President Evo has put in train, a legitimate
desire arises: May God ensure that this stellar moment in which
we live turns out to benefit the country and its people, who
so often in the past have been victims of bitter frustrations."
Q&A:
On Bolivia's gas takeover
The
government said soldiers and engineers were sent to 56 locations
around the country.
Mr
Morales said the gas fields were "just the beginning, because
tomorrow it will be the mines, the forest resources and the
land".
The
fate of Bolivia's gas reserves was at the heart of protests
which saw two presidents thrown out of office.
Mr
Morales' move is the fulfilment of an election promise to secure
better benefits for impoverished ordinary Bolivians from the
gas reserves - the second largest in the continent.
Hundreds
of Bolivians celebrated the decree in the de facto capital,
La Paz, on Monday.
Under
the terms of Decree 28701, the Bolivian government has declared
absolute control over the country's energy resources and radically
altered the conditions of its relationship with the energy companies.
Royalty
payments to the Bolivian government at the largest gas fields
will now increase from 50% to 82%.
Companies
have six months to negotiate new contracts with the Bolivian
government. During that time, the Bolivian government says it
will carry out audits of each company to determine how much
it should pay for a stake of at least 51% in each.
The Bolivian state is putting its mark on seized energy assets
Bolivia's President Evo Morales has defended his decision to
place the country's natural gas industry under full state control.
He said energy companies were not going to be expelled or expropriated
- but added that contracts with foreign energy companies would
be completely renegotiated.
The
decision has been greeted with dismay by Brazil's Petrobras
and Spain's Repsol-YPF, the biggest foreign investors in the
Bolivian energy sector, who have seen their installations seized
by Bolivian troops.
What
does the decision mean for foreign energy firms in Bolivia?
Mr
Morales was elected in December last year on a campaign pledge
to increase the state's share of the proceeds from Bolivia's
lucrative natural gas industry, with the aim of benefiting the
country's impoverished indigenous majority.
Until
his May Day decree nationalising the energy sector, it was unclear
how he planned to do this.
Now
it appears that foreign energy firms will have a much-reduced
role in Bolivia. They will be reduced to mere operators of the
gas fields, while state-run Yacimientos Petroliferos Fiscales
Bolivianos (YPFB) will own all the gas produced.
The
details will not be finalised until foreign companies have agreed
new contracts with YPFB, which they must do within six months.
However,
Bolivian Vice-President Alvaro Garcia has explained that under
the decree, the government's share of revenue from gas production
will go up from $460m last year to $780m by 2007.
The
government has already laid down that from now on, the two largest
gas fields - San Alberto and San Antonio - must hand over 82%
of production revenues to the state, rather than the 50% they
do now.
The
head of YPFB, Jorge Alvarado, has justified this decision by
arguing that even on those terms, foreign firms will still be
making a profit of 20 to 25%.
How
have the companies reacted?
The
president of Brazil's state-owned Petrobras, Jose Sergio Gabrielli,
disagrees with Mr Alvarado's arithmetic.
Mr
Gabrielli has said that the new conditions make gas operations
"practically impossible" in Bolivia, although he has
given no indication that Petrobras is contemplating pulling
out of Bolivia.
Petrobras
is the foreign company with the biggest stake in Bolivia's energy
sector, having invested more than $1bn in the country.
The
Spanish government is also concerned by the nationalisation
and is sending a delegation to La Paz to discuss the consequences
of the move.
Britain's
BP has interests in Bolivia, as does BG Group, the former exploration
and production arm of British Gas.
However,
both firms have played down the risk, saying Bolivia represents
only a small part of their business.
Where
does Bolivian gas go?
About
two thirds of the gas exported by Bolivia ends up in Brazil
- a factor which explains the depth of Petrobras's concern.
About
75% of the natural gas used in Brazil's biggest city, Sao Paulo,
comes from Bolivia, while some states in wealthy southern Brazil
are 100% dependent on Bolivian gas.
Brazil
is now self-sufficient in oil and recently discovered big offshore
gas reserves, but will be unable to extract them until 2009
at the earliest.
That
puts Mr Gabrielli under pressure in the short term not to jeopardise
continuity of Bolivian gas supplies.
However,
landlocked Bolivia has few other potential customers for its
gas reserves - the second-largest in Latin America - because
of a long-standing border dispute with Chile that leaves it
with no access to the Pacific Ocean.
What
happens next?
Brazil
and Spain probably have too much at stake to withdraw from Bolivia,
although other companies will doubtless be deterred from investing
in a country with such a volatile political climate.
But
Mr Morales has now embarked on a path of populism and economic
nationalism that is unlikely to stop with state control of the
gas fields.
In
fact, the Bolivian president has already said the gas fields
are "just the beginning, because tomorrow it will be the
mines, the forest resources and the land".
Protesters
calling for greater state control of the country's natural resources
have already forced two previous presidents to resign - Gonzalo
Sanchez de Lozada in 2003 and Carlos Mesa in 2005.
Now
the demonstrators have got what they wanted. But with international
investors in retreat, Bolivia may find that it lacks the money
and expertise to manage its own resources.
