May 01, 2006

Bolivia Nationalizes its Oil Fields

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Today, May 1, 2006, the Bolivian government headed by Evo Morales has officially nationalized its natural gas resources. In a symbolic act on the day of the worker (Bolivian holiday), Morales announced the law bringing the privatized natural gas resources, once again in government hands. Furthermore, he ordered the army to take possession of the physical camps. A list of links is provided below.

News links:

  1. Bolivia Military Told to Occupy Gas Fields Open this result in new window
    AP via Yahoo! News - 12 minutes ago
    President Evo Morales ordered soldiers to occupy Bolivia's natural gas fields Monday and threatened to evict foreign companies unless they give Bolivia control over the entire chain of production.
  2. Bolivia Leader Orders Army to Gas Fields Open this result in new window
    AP via Yahoo! News - 1 hour, 48 minutes ago
    President Evo Morales ordered soldiers to immediately occupy Bolivia's natural gas fields Monday and threatened to evict foreign companies unless they sign new contracts within six months giving Bolivia majority control over the entire chain of production.
  3. Bolivia nationalizes natural gas and oil industry Open this result in new window
    USA Today - May 01 11:12 AM
    President Evo Morales nationalized Bolivia's natural gas and oil industry Monday, ordering foreign energy companies to send their supplies to a state company for sales and industrialization.
  4. Bolivia Occupies Natural Gas Fields Open this result in new window
    CBS News - 1 hour, 12 minutes ago
    Bolivian President Evo Morales ordered soldiers to immediately occupy the country's natural gas fields. He threatened to evict foreign companies unless they sign contracts within six months giving Bolivia majority control over production.
  5. Bolivia takes control of gas sale Open this result in new window
    BBC News - May 01 11:08 AM
    Bolivia's president orders foreign energy firms to hand over gas sales to a state-owned company.
  6. Bolivia nationalizes its natural gas industry Open this result in new window
    Houston Chronicle - May 01 10:31 AM
    President Evo Morales nationalized Bolivia's natural gas industry today, ordering foreign energy companies to send their supplies to a state company for sales and industrialization.
  7. Bolivia nationalises oil and gas Open this result in new window
    Aljazeera - 27 minutes ago
    Soldiers have been ordered to occupy Bolivia’s oilfields and natural gas fields as the country’s president issued a decree formally nationalising natural resources.
  8. Bolivia Nationalizes Natural Gas Industry Open this result in new window
    CBS 2 Los Angeles - 1 hour, 31 minutes ago
    President Evo Morales nationalized Bolivia's natural gas industry and oil Monday, ordering foreign energy companies to send their supplies to a state company for sales and industrialization.
  9. Bolivia Nationalizes Natural Gas Industry Open this result in new window
    KUTV.com - 1 hour, 31 minutes ago
    (AP) LA PAZ, Bolivia President Evo Morales nationalized Bolivia's natural gas industry and oil Monday, ordering foreign energy companies to send their supplies to a state company for sales and industrialization.
  10. Bolivia nationalizes gas industry Open this result in new window
    The Globe and Mail - May 01 11:36 AM
    La Paz, Bolivia — President Evo Morales nationalized Bolivia's oil and natural gas industry Monday, ordering foreign energy companies to send their supplies to a state company for sales and industrialization.
Other blogs reporting on this topic:

Barrio Flores

Off Topic

12 comments:

mcentellas said...

I give it a month, maybe three.

MA said...

You talking about the nationalization? ;-)

Frank IBC said...

So is Santa Cruz ready to secede yet?

mcentellas said...

Bolivia tried nationalization twice before. In 1937 and 1969. Both failed. Misearbly. The 1969 one failed because foreign oil companies refused to do any business w/ Bolivia until they were compensated. So there were no refinaries available, no transportation networkds, nothing. Bolivia could pump gas, but it couldn't get it to markets. For several months, the country just burned gas at the wells. When the Barrientos government finally capitulated (after the economy began to unravel), the concessions to the oil companies lef them (the companies, not the government) in a better position than before the nationalization.

This is particularly important for the gas, where most of the fields' *potential* aren't yet explored (that is, there aren't working wells). W/o foreign companies (which take all the risk, mind you), the Bolivian govt can't afford to explore & tap new fields. I also don't think the Bolivian govt even has the ability to run these new fields, especially if the rumors are true and the employees aren't even being allowed into their offices!

So. I give it at most three months before the economy collapses (or at least gets worse) and Evo has to compensate the oil companies and make assurances of stability. Or he just gets overthrown. Like Barrientos.

mcentellas said...

Sorry, I may have my dictators wrong. I think it was actually Ovando that nationalized the gas, though he co-governed off/on w/ Barrientos during the late 1960s. Both were overthrown, so it's a mute point.

MB said...

Well, one thing to remember is that this decree does not mean complete nationalization with confiscation, which is what happened before.

This time around, short of confiscating, Morales and the government took control of the operations. The companies still own a minority stake. In other words, the government turned them into mixed ventures with state control.

I would say, if Morales keeps on moving this way, he is going to make it impossible for these companies to keep taking it.

As I was just arguing to a friend, it is important for Morales to leave the companies some sort of incentive for them to keep playing. If they leave, that would really mean disaster, not only for the economy, but for the government as well.

As far as I know, the government has thought of this and is keeping the incentives in.

The next few weeks will be very interesting to watch. Unfortunately, I will be visiting my family in VA and will be deprived of my laptop for about 2 1/2 weeks.

But I will be posting some.

Frank IBC said...

Miguel... well, actually both Miguel B. and Miguel A. might be able to answer this question -

Do you know what percentage of the total area, and percentage of total population of Bolivia is contained in the provinces of the "Media Luna"?

Frank IBC said...

Sorry, that should have been "Miguel C.", not "Miguel A.".

MB said...

Well, from looking at the map, I cannot tell you exactly how many sq. km. But considering that Beni and Santa Cruz (plus Pando, Sucre and Tarija), two of the largest departments in the country are parts of the media luna, I would say it is safe to say I wouldn't be left much of Bolivia after all.

I think, the population is around 65 % of the entire country.

Correct me if I am wrong!

MB said...

Frank, I am posting the links to your photos. The are excellent.

Let me know if I should take them off.

Thanks!

Frank IBC said...

Thanks, I'm honored. :)

mcentellas said...

The media luna comprises about two thirds of the national territory, but only about a third of the national population. The bulk of the population is in La Paz & Cochabamba.