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Bolivia inks 'nationalization' deals with foreign oil companies
AFP
LA PAZ
Petroleumworld.com 10 28 06
Bolivia signed new contracts with major foreign oil companies late Friday that allowed President Evo Morales to claim success in his program to "nationalize" the country's lucrative energy industry.
With Morales in attendance, France's Total and US firm Vintage signed contracts which require them to turn over their oil and gas production to the state energy company YPFB for marketing to local and international buyers.
"With the signing of these accords, we confirm our commitment to the process of nationalization and to the expectations of Bolivian society," said Hydrocarbons Minister Carlos Villegas.
"The hydrocarbons are and will be the Bolivian people's," said YPFB head Juan Carlos Ortiz.
Just before the ceremony an official said that Britain's BP would also be signing a new deal with the government.
Other foreign oil and gas majors, including Brazil's powerful Petrobras and Spain's Repsol-YPF, have reportedly reached similar deals with the government, and theoretically have until Saturday to sign new contracts.
Indigenous socialist leader Morales, who assumed office in January, set a six-month deadline in May for an ambitious nationalization of oil and gas resources to recoup energy revenues for the good of the impoverished country.
The president warned that he fully intended to make foreign companies respect its nationalization laws regardless of whether they join the deal.
"I want to warn those who still continue negotiating that although we are a small and still developing country, companies must respect our laws and other norms," Morales said. "And if they don't, we will make them comply."
The deals appear structured to earn the government a greater share of the earnings from the country's rich natural gas and oil fields.
Total will continue to operate on the Itau field under a new contract which gives the Bolivian state an 82 percent share. The French company is also pledging to invest 1.15 billion dollars in two other deposits.
Bolivia's talks with Petrobras and Repsol are said to be more complicated.
Bolivia exports some 25 million cubic meters of gas a day to Brazil, which covers half of the South American powerhouse's gas needs, while Brazil is the largest investor in Bolivia's oil and gas sector and controls about 14.5 percent of the country's gas reserves.
According to Bolivian Vice President Luis Garcia Linera, a good agreement with these partners could result in an extra two billion dollars for Bolivia, which would roughly equal 23 percent of its gross domestic product.
Bolivian gas reserves are estimated to exceed 1.5 billion cubic meters, which makes them the second-largest in the region after Venezuela's.
Morales said that while every foreign company deserves respect, "they also must respect our people, our nation and our laws."
AFP 28 0343 GMT 10 06
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