November 15, 2004

The Bolivian Strategy on Gas.

MABB is a registered TM.

While Bolivia's congress is busy derangedly debating the proposed Hydrocarbons Law; the government is hazily trying to avert attacks from all sides of society and government; and civil society is bent on fighting both congress and the executive in defense of what they call 'national sovereignty', plans on liquid gas exports are going ahead.

El Diario's latest report says president Kirchner and Antonio Brufau, REPSOL-YPF's representative, will sign an agreement to expand the gas pipe line of the north. While this plant takes care of the northern region's market in Argentina, other plants will be free to supply contracted amounts with Brazil, Chile and Uruguay.

This is what I am thinking. After reading numerous reports of big energy companies signing contracts or agreements with neighboring countries, like Brazil or Argentina, I am thinking, there is a new strategy within the energy companies. It seems that Bolivia, as a country, with all its idiosyncracies and its cronic instability, is effectively being circumvented by big business. The energy companies only have to build their plants on more secure, stable and business friendly soil, like Brazil or Argentina. These countries, in the name of "brotherhood and cooperation", would negotiate generous contracts with the government of Bolivia. That means, cheap gas folks!

If we think about it. That would be one way to lower the high risks of doing business with Bolivia and at the same time, get cheap prices. That kills two birds with one shot.

So, I ask. Why isn't Bolivia taking advantage of its natural reserves and bringing plants, pipes, jobs and everything else that comes along with actually contstructing these things in Bolivian soil?