Morales Nationalizes Bolivia's Oil, Gas!
Their worst case scenario has come true.
President Evo Morales [nationalized] Bolivia's crucial natural gas and oil industry yesterday [!!!]Who's next? Peru? Who knows. Maybe even US - if we're lucky!
Morales ordered soldiers to occupy Bolivia's natural gas fields and the president threatened to throw out foreign companies unless they agree to new contracts within six months giving the state control of energy production. [!!!]
"The time has come, the awaited day, a historic day in which Bolivia retakes absolutely control of its natural resources," Morales declared in a speech from the San Alberto petroleum field in southern Bolivia.
Negotiations are to begin immediately with affected firms, mostly from European and other South American countries. The move should not affect US energy prices because the United States is not a major consumer of Bolivian natural gas or oil, specialists said.
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The Bolivian government's plan appeared to be less of an outright takeover of foreign assets than a mandatory sale of most assets to the government energy concern. Morales has indicated a willingness to allow some foreign companies to remain as minority shareholders under his new terms.
Bolivia has the continent's second-largest natural gas reserves, after Venezuela, but most of its capacity remains untapped because of a lack of infrastructure and investment. Much of its gas is sold to Brazil and Argentina. Petroleum production is less significant.
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It remained unclear where Bolivia would secure the funds to purchase the private assets for its state energy concern, Yacimientos Petroliferos Fiscales Bolivianos, and how much the government would be willing to pay -- market value or a price dictated by the Bolivian government.
"The big question is where the money is going to come from, and, who will set the prices," said Eduardo Gamarra, a Bolivia specialist at Florida International University in Miami.
International companies say they have invested some $3.5 billion in the Bolivian energy sector since the mid-1990s . . . Investors worry that they will not be able to recoup the monetary resources they plowed into Bolivian gas fields, pipeline and other infrastructure . . .
But Morales and his supporters have argued that a new way of doing business is needed, because foreign companies have plundered the national resources for decades without reducing a poverty rate topping 60 percent.