Wed, May 03, 2006 - Page 1 News List

Bolivia's president nationalizes gas industry

`RECOVERING OUR SOVEREIGNTY' Fulfilling an election campaign promise, populist leader Evo Morales put foreign gas firms on notice they may be evicted in six months


Soldiers guarded natural gas fields and refineries across Bolivia after President Evo Morales on Monday ordered the sector nationalized, threatening to evict foreign companies unless they cede control over production within six months.

Morales' announcement fulfilled an election promise. Reconquering ownership of Bolivia's natural resources, he said, was "a fundamental means for recovering our sovereignty."

The bold stroke solidifies Morales' role along with Venezuela's Hugo Chavez and Cuba's Fidel Castro in Latin America's new axis of populist leaders opposed to US and corporate influence in the region.

About 100 soldiers peacefully took control of the Palmasola refinery in the eastern city of Santa Cruz, some carrying submachine guns, others anti-riot gear. Most stood in front of the gates of the refinery, which is run by Brazil's Petroleo Brasileiro SA, or Petrobras.

"Our mission is to guarantee the normal operations" of the refinery, said unit commander Captain Jorge Lenz.

The government said soldiers and engineers were sent to 56 locations around the country -- including gas fields tapped by foreign companies -- including Britain's BG Group and BP, Brazil's Petrobras, Spanish-Argentine Repsol, France's Total and US-based Exxon Mobil.

The companies have six months to agree to new contracts or leave Bolivia.

"The looting by the foreign companies has ended," Morales, Bolivia's first Indian president, said in a speech at the San Alberto field, in the southern state of Tajira, which Petrobras operates in association with Repsol and Total.

Morales added that the nationalization of the hydrocarbons sector "was just the beginning, because tomorrow it will be the mines, the forest resources and the land."

Bolivia has South America's second-largest natural gas reserves after Venezuela.

Bolivia's decision to nationalize its natural gas fields may hurt world energy markets, EU officials said yesterday.

While EU nations import little or no natural gas from the South American country, EU spokesman Ferran Tarradellas Espuny said the move "may have a negative impact on markets, because the markets are now subject to considerable pressure as far as prices are concerned."

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