Bolivia Nationalizes Natural Gas Industry

From the Associated Press:

SANTA CRUZ DE LA SIERRA, Bolivia -- Soldiers guarded natural gas fields and refineries after Bolivia's leftist president ordered the nationalization of the sector, threatening to evict foreign companies unless they give Bolivia control over production within six months.

President Evo Morales announcement Monday fulfils an election promise to increase state control over Bolivia's natural resources, which he says have been "looted'' by foreign companies. It also solidifies his role along with Venezuela's Hugo Chavez and Cuba's Fidel Castro in Latin America's new axis of leftist leaders opposed to U.S. and corporate influence in the region.

About 100 soldiers took control of the Palmasola refinery in the eastern city of Santa Cruz, some carrying assault rifles, while others carried 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 facility, said unit commander Capt. Jorge Lenz.

Soldiers and engineers with Bolivia's state-owned oil company were ordered to installations and fields tapped by foreign companies -- including Britain's BG Group PLC and BP PLC, Petrobras, Spanish-Argentine Repsol YPF SA, France's Total SA and U.S.-based Exxon Mobil Corp.

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 from the San Alberto field in Santa Cruz operated by Petrobras in association with Repsol and Total SA.

Vice President Alvaro Garcia Linera said troops were sent to 56 locations around the country.

The announcement follows a trend by oil- and gas-rich Latin American countries to exact a larger share of profits from extraction of the fossil fuels.

It comes as Ecuador argues with Washington over a new oil royalties law and less than a month after Chavez ordered the seizure of oil fields from Total and Italy's Eni SpA when the companies failed to comply with a government demand that operations be turned over to Venezuela's state oil company, Petroleos de Venezuela SA.

Bolivia has South America's second-largest natural gas reserves after Venezuela. All foreign companies must turn over most production control to Bolivia's cash-strapped state-owned oil company, Yacimientos Petroliferos Fiscales Bolivianos, Morales said.

Multinational companies that produced 28 million cubic metres of natural gas daily last year in Bolivia will be able to retain only 18 per cent of their production, with the rest being given to YPFB, he said. Morales did not name the companies.

"We are monitoring the situation very closely,'' said Bob Davis, a spokesman for the world's largest oil company Exxon Mobil Corp., which has a 30 per cent interest in a non-producing field called Itau, which is operated by Total.

In Madrid, Spain's government expressed "deep concern'' about the decree to nationalize the hydrocarbons sector.

"The government hopes that in the 180 days period announced by the Bolivian president for foreign companies to regularize their current contracts, there is authentic negotiation and dialogue between the government and the different companies in which each other's interests are respected,'' the Foreign Ministry said in a statement.

Petrobras called the Morales' decree an "unfriendly'' action that took the company by surprise.

"Evo Morales' decree was a unilateral measure adopted in an unfriendly way,'' Petrobras President Jose Sergio Gabrielli told the official Brazilian news service Agencia Brasil in Houston where he was taking part in an international oil conference. "It obliges us to analyze very carefully our situation in the country.''

Morales said the government would begin negotiations immediately with the companies to make sure they are willing to comply, but said they could be stripped of their privilege to operate in Bolivia if they don't sign new contracts within six months.

Comments

[well that's progress]

See the state gas companies in Saudia Arabia and the Gulf states for examples of this kind of progress...

[Mme. Spectre]

Capitalism... the end of history?

Nationalization... bad on principle?

Capitalist tyranny... historical and under attack!

Evo is re-negotiating the same contract. On better terms, in regional alliance with populist, social-democratic governments in a region where open imperial terror (see Colombia, Central America) has enforced barbarism.

This is a good thing. It's not "the" thing, but let's see it in its fabric and take it for the victory it is.

Evo was brought in because the militant, autonomous movements among the indigenous people of Bolivia have been boiling for years. Let's not make this a personality game where Morales plays an 8-fingered Chavez (or Che-light).

This is a concession to the people -- and their mass demand for national, and ultimately socialist -- control of the resources that have been stolen from them for so long.

Si..... se puede.

[Christopher Day]

This is why political line is KEY. The nationalization of the gas fields can mean different things depending on the political line behind it. What are the political objectives that this move seeks to fulfill and on behalf of what class interests? Its easy to make facile comparisons between different cases of nationalization, but their is a world of difference between the social base that put Evo Morales in power and the social base of teh Saudi royal family. This is not to deny the profound contradictions around Morales. There are plenty of reasons to fear a sort of left sounding populism that doesn't really ever move to smash bourgeois power and build workers power. There has certainly been a long history of that in Latin America. But the verdict is not in yet. We are in a new period and old truisms about the limits of the electoral road to socialism are being put to new tests under changed circumstances. Let us all watch carefully and not be afraid to feel hope.

[Comandante Gringo]

People do want to look gift horses in the mouth here, don't they? Still, they're more than a little justified in their suspicions, because Morales is indeed very untrustworthy (talk about the need for 'line'...) Which is why I was absolutely floored to read this news last nite.

It was a totally unexpected move, coming from such a one like Morales -- and totally out of character too, AFAIC. I still think so. This is NO SMALL DEAL. It's frankly AMAZING that Morales would go this far so fast. One can only wonder why, from this distance -- because there's no little birdie sitting on my shoulder (or a fly from someone's wall) to explain what forced Morales to move so decisively. What's the calculus? Serious dissension in the ranx over his other recent failures of will? Incontrovertible proof delivered to him from certain quarters that there is a real and very dirty destabilization campaign being waged against him by the imperialists? Invasion plans in the worx which he is heading off? Did he finally and truly "see the light" during his little visit with Fidel and Hugo..? Are the terms of ALBA so favorable -- and the resources of Cuba and Venezuela deep enuff -- that Morales has grasped that he really does have space for maneuver against the Imperium? That he _can_ act as the masses demand? That he has to clear the decks to prepare for Yanqui invasion and/or destabilization thru Paraguay -- or even from Brasíl and/or Argentina??

I await a marxist analysis of some real facts here. We all do. Too bad most of what we've gotten so far from the mass-media is the usual self-serving bourgeois crap.
;/

[Chasing Manhattan]

...maybe I'll make Commandante Gringo mad with some "self-serving" proletarian crap... and lack of marxist analysis...

but this is good. this is a response to the just demands of the people, not the generosity or goodness of Evo.

it is also the last-ditch of a doomed system. state-capitalism is not our goal. but if we can push governments to recoup profits for the people and create a progressive nationalist bloc in South America... to the better.

[CounterPuncher]

Decent, sympathetic breakdown of the nationalization...

http://counterpunch.org/burbach05042006.html

[anon]

http://www.democracyctr.org/blog/2006/05/morales-nationalizes-bolivias-gas-but_04.html

http://www.democracyctr.org/blog/2006/05/oil-company-spin-machine-shifts-into.html