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Bolivia and Brazil to hammer out new natural gas accord
AFP
LA PAZ
Petroleumworld.com 05 12 06
Bolivia and Brazil have agreed, following talks in La Paz, to negotiate new natural gas contracts following President Evo Morales move to nationalize Bolivia's energy industry.
Officials from the two governments and Brazil's state-owned Petobras oil held talks late Wednesday after the nationalization announcement on May 1 had initially angered Brazil.
After the talks, Brazil said it accepted the nationalization.
"Brazil's energy minister and the Petrobras president reiterate their absolute respect for the sovereign decisions of the Bolivian government and Bolivian people," said a joint statement released after the meeting.
The statement said talks would be held on the new price that Brazil will pay for Bolivian gas, after Morales also said there would be a major price increase for clients.
The two sides will also discuss "mechanisms and means for negotiated compensation" for the expropriation of two Petrobras refineries, the statement said.
Bolivia has Latin America's second highest natural gas reserves after Venezuela and the nationalization has shaken Brazil and Argentina, its two biggest customers.
Brazil's Minister of Mines and Energy Silas Rondea; Bolivia's Minister of Hydrocarbons Andres Soliz; the Petrobras president, Sergio Gabrieli, and the head of Bolivia's state-owned Yacimientos Petroliferos Fiscales Bolivianos (YPFB), Jorge Alvarado, attended the talks.
In Vienna Thursday, Morales declared that foreign oil companies would not be compensated.
"If they have earnings they can recover them, there is no reason to indemnify them," said Morales.
The May 1 decree affects 26 foreign producers, including such heavyweights as Petrobras, ExxonMobil of the United States, British Gas, Total of France and Repsol of Spain. Troops were sent in to take control of some gas fields.
Foreign companies have six months to renegotiate their contracts with YPFB or leave the country.
During the transition period, 82 percent of profits will go to the Bolivian state and 18 percent to the corporations.
Prior to the nationalization move, Petrobras controlled 14.5 percent of Bolivia's gas resources. Brazil is also the top purchaser of Bolivian gas.
AFP 11 1542 GMT 05 06
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