Tuesday, May 02, 2006

Bolivia nationalizes oil- and gas resources permanent link   8 comments
May 4th, 2006 - Update:
This is today's cover of Peruvian news magazine 'Caretas':




May 2nd, 2006 - Update:

After directing the military to take control of natural gas fields and oil refineries, Evo Morales declared last night at the Labor Day festivities in La Paz that the "transformation towards democracy" in Bolivia has begun.
"This is only the beginning. The mining industry, our forrests, all our natural recources will be next."
"We are responsible for the Bolivian people, for the international community. For that reason we have decided, with pertinacity and also with humility, courage, with rebelliousness, to recover our natural resources", he added when presenting what he called "the best gift for this year's Labor Day".
Historically, the mining sector was the backbone of the Bolivian economy until the end of the 20th century, when the boom of the the natural gas industry took over.

In response to the events in Bolivia, Peru's president Alejandro Toledo said that the nationalization of all hydrocarbon assets was a "sovereign decision by Bolivia's elected leader Evo Morales" but as for Peru, the stimulation of private and foreign investment is vital to secure economic growth.
"If president Morales has decided to nationalize the hydrocarbon industry, it is a sovereign decision of the president who was chosen by the people. I am not going to comment on that, but in Peru I believe that we must stimulate private and foreign investment to grow and to make sure that the growth reaches the poorest", he said. Toledo indicated that each country chooses its own destiny, in reference to the course that Bolivia and Venezuela have taken, and added that as head of the Peruvian State he respects the decisions of other countries.
He added that in order to reduce poverty, which is his government's main objective, it is necessary that the economy continues to grow, because in his view this is the only way to generate more jobs and more resources for the state, with the purpose of dedicating them towards health, education and nutrition.
"Those are the most powerful weapons to face poverty", he said.
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related coverage:

Alvaro Ruiz-Navajas' "Off Topic" blog
Miguel A. Buitrago's "MABB" blog
Peru Election 2006
Spain hints at retaliation over Bolivia energy seizure (Financial Times, registration required)
Nationalisation fuels fears over Morales’ power (Hal Weitzman, Financial Times)
South America's New Hero: Indian, Coca Farmer, Bolivian President (Spiegel Online International)

Picture Gallery
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May 1st, 2006:
Today, on Labor Day, Bolivia's president Evo Morales has nationalized all of his country's natural oil- and gas resources by decree. The leftist politician announced that all foreign energy companies have to leave the country if they don't follow the new rules.
All international companies are obligated to hand over production to the national association 'YPFB' which will then take over all export related businesses. For those who don't comply with the new conditions their only alternative is to leave the country.
Morales put the army in charge of controlling the production fields to secure the oil facilities' operabilities so that the supply chain will not be interrupted.

Morales did not go into details during his speech. In previous announcements he repeatedly expressed that the nationalization of recources would not mean the confiscation or the condemnation of foreign industries. However, today he announced that the privatization process that began during the 1990's would be rescinded and the state will take over all shares currently held by international companies.
According to Morales, all foreign energy companies now have 180 days to negotiate new contracts with the national "YPFB".
The relatively small Andean nation of Bolivia holds the fifth largest proven crude oil reserves in South America, with 441 million barrels while proven natural gas reserves total close to 27.6 trillion cubic feet (Tcf) as of January 2004. When potential gas reserves are included, the nation has close to 53.3 Tcf, therefore bestowing upon the nation bragging rights to owning the second-largest gas reserves in South America, second only to gas-rich Venezuela.
Currently there are about 20 foreign companies actively involved in the energy production. The most important ones are the Brazilian 'Petrobras', the spanish/argentinean 'Repsol YPF', the 'British Gas' and 'BP', the French 'Total' and the US company 'Exxon'.

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8 Comments:

At 5/01/2006 04:30:00 PM, Blogger Inka-Wolfy wrote...

note to everybody:
due to the latest increase of anonymous trolls and after issuing several warnings, 'un lobo' is forced to make a rule change by turning on "comment moderation".
Anonymous comments are no longer allowed. If you don't at least leave a name your comment will be deleted.

I hope that those of you with good intentions won't mind and understand.

gracias amigos and amigas.

 
At 5/02/2006 03:34:00 PM, Anonymous javier wrote...

Lets end all foreign investment, all foreign aid, all debt relief, and begin the decline in 3, 2, 1...

The only bright side of this debacle is maybe Peru will learn from the mistakes of Bolivia.

 
At 5/02/2006 04:24:00 PM, Blogger Inka-Wolfy wrote...

well, I guess we will find out on May 28th or so.
Gonzalo Garcia, Humala's vice president candidate, affirmed today that if they come to power, oil- and gas resources, electricity, water, comercial air space and the ports will all be nationalized (I call it "seized"), but explained that they would apply a different process than the one used by Bolivia. They assure that there will be dialogue and they do not discard any concessions held.

Garcia said in an interview: "What we are going to do is a modern vision of openness and dialogue with national and foreign investors, a collaboration between governmental and private capital, an articulation of associations."
Whatever that means. Most Humalistas don't even know according to the many contradictionary declarations by various officials. For example, UPP secretary general José Vega said shortly after the extend of Bolivia's nationalization was revealed that they would follow the example of Morales. This obvious 'faux pas' was later declared a slip of the tounge by Humala's spokesman Eduardo Garibotto.
As of now, nobody on their part, including Humala himself, has made it perfectly clear, what EXACTLY they are planning to do.
So far this is all wishy-washy.

 
At 5/04/2006 07:42:00 AM, Blogger Ceridwen Devi wrote...

Those trolls get everywhere. You should see WanderingScribe's blog. I think Morales has made the right decision. Now that China is in the energy market in a big way he has good cards in the energy poker game.

 
At 5/04/2006 12:07:00 PM, Anonymous javier wrote...

CD, who is the troll? me who has suffered through the same events or someone from the UK who has no expierence in this but is very opinionated anyway?

Having lived through my country nationalizing industry and seeing the economic decline, out of control inflation, loss of jobs, loss of savings, financial crisis, and general chaos, I feel bad for anyone else who suffers the same. Hopefully the price of oil will keep high so Bolivians will not suffer.

I still remember when my US$100 on Friday would have the value less than US$10 on Monday. I also remember waiting one hour in the line to buy milk for my kids when the politicos would get it for free. I saw the industries collapse after 6 months of mismangement by the government, industries with 100+ year histories that were going strong and had good futures. Every one being afraid to say anything bad about the government because of reprisals and the government controlled media telling us what to say and think.

It is easy to critize and have opinions when you have never had to live in fear and wonder if you will have enough food to feed your family, a roof to sleep under, and a future for your childrens.

I suppose I am a troll if that means others don't have to repeat my history.

 
At 5/04/2006 12:41:00 PM, Blogger Inka-Wolfy wrote...

Javier,
I think Ceri was referring to a commenter on a different post and my first comment here.
It had absolutely nothing to do with you.

saludos y gracias

 
At 5/04/2006 01:12:00 PM, Anonymous javier wrote...

sorry, bad english on my part. you can delete my post if necessary

 
At 5/23/2006 10:41:00 AM, Blogger Ceridwen Devi wrote...

The trolls in question were indeed the ones hanging around WanderingScribes's blog. One has even gone so far as to set up a troll blog!

 

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