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Bolivian president says will not compensate foreign oil companies
By Michael Adler
AFP
VIENNA
Petroleumworld.com 05 12 06
Bolivian President Evo Morales said Thursday that foreign oil companies would be free to repatriate their earnings but will not be compensated for oil and gas resources that have been nationalised.
"If they have earnings they can recover them, there is no reason to indemnify them," said Morales, a leftist who has nationalised Bolivia's energy sector, prompting widespread concern in Latin America and elsewhere.
Speaking to reporters on the sidelines of an EU-Latin America summit, he said in answer to a Brazilian reporter's query as to why that country and its powerful state Petrobras oil company had not been notified in advance: "We do not have to consult or inform anyone before taking a decision that involves our sovereignty."
"I could also dwell on Petrobras's illegal activities in my country," Morales said, adding that he wanted to defend the rights of Bolivia's "indigenous peoples" and would also be nationalizing "the great land resources in our country," which includes mines.
But Morales said that "any company that respects our laws will have legal assurances."
He said the "problem is that companies have betrayed our country," which is the South American continent's poorest nation even though it holds the second largest natural gas reserves after Venezuela.
Morales charged that many foreign firms operating in Bolivia had "not paid taxes and engaged in smuggling."
Foreign companies have six months to renegotiate their contracts with Bolivia's state-run hydrocarbons company Yacimientos Petroliferos Fiscales Bolivianos (YPFB).
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, and requires them to turn over to the Bolivian state company the ownership and exploitation of the country's energy resouces.
During the transition period, 82 percent of profits will go to the Bolivian state and 18 percent to the corporations.
The takeover came in the context of a regional political shift to the left that reinforced tighter public control of oil and gas resources as energy prices surge.
In a press conference of over an hour, Morales condemned the United States for military interventions, praised Cuba's Fidel Castro for managing to have a prosperous economy despite US sanctions against his country and said Bolivia would fight drugs in a rational way that would avoid repressing the population.
Coca production would be reduced by working with farmers rather than forcing them to stop all cultivation immediately of the plant used to make cocaine.
"Not one dead, not one wounded, no repression," said Morales, who said he himself was a coca farmer, of his government's tactics in working with its people.
"Before Bolivia was considered to be a no-man's land, now it is considered to belong to the Bolivian people," said Morales, who was dressed casually in an open-necked shirt.
Morales claimed a stunning victory when he won Bolivia's presidential election last December, becoming the country's first indigenous head of state.
He was elected on a pledge to take a bigger share of earnings from Bolivia's vast energy resources, an echo of actions by Venezuela's President Hugo Chavez who has clamped down on foreign oil companies that owe back taxes and seized some oil fields.
AFP 11 1243 GMT 05 06
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