World
  |
|
Bolivian president faces rocky road
PWW
SAN FRANCISCO
Petroleumworld.com 04 27 07
Bolivian President Evo Morales based his 2005 candidacy on two promises: first, his government would nationalize natural resources, crucially natural gas and oil, and second, he would return the government to the country’s indigenous majority through a constituent assembly and new constitution.
Fifteen months into his presidency, his nationalization program, announced nearly a year ago on May Day, is in trouble.Morales’ 54 percent winning plurality testified to his support among the poor and indigenous populations. Both had been mobilized in earlier struggles over oil.
Former President Gonzalo Sánchez de Lozada, during his first term, 1993-97, sold off components of the state petroleum company YPFB. As a consequence, the contribution of natural gas sales to government revenues fell from between 40 and 60 percent of the state’s budget to well under 7 percent by 2002.
In 2003, during Sánchez de Lozada’s second term, Bolivians fought government troops in the streets to block his scheme to hand over the nation’s natural gas to foreign companies. The protesters suffered 40 dead and hundreds wounded. El Alto resident Nestor Salinas said at the time, “They died to defend our oil and gas.”
Morales’ nationalization decree called for negotiations with foreign companies to be completed in six months. With time running out, 44 contracts were signed with 12 foreign companies on Oct. 28, 2006.
These contracts represented a major renegotiation of terms, but not an expropriation. A Morales majority in Congress ratified them immediately. The opposition-controlled Senate followed suit on Nov. 28 when all but three opposition senators were absent.
Tax income from oil companies has increased almost fourfold, yet today the contracts are on hold.
Energy Minister Andrés Soliz Rada resigned in September, charging the government with giving up too much to Petrobras of Brazil, purchaser of half of Bolivia’s gas exports. Two YPFB leaders also left amid corruption charges.
On Feb. 12 the government submitted an amendment to correct contract errors like incorrect company names, misplaced gas fields, and a secret agreement with Petrobras. Carlos Villegas, Soliz Rada’s replacement, resigned but later changed his mind. Blame fell upon inexperienced YPFB head Manuel Morales Olivera, who was fired on March 24.
PWW 25 04 07
Copyright© 2007 PWW. All Rights Reserved.
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels