Bolivia Nationalizes Oil Production
Bolivian President Evo Morales announced Monday (May 1st) that all oil production in the country would be nationalized. The decision affects all foreign firms operating in the country, including the Brazilian gas monopoly, Petrobrás as well as BP, British Gas, Repsol YPF (Spain and Argentina), Total (France), Dong Wong (Korea), and Canadian Energy.In response to the proclamation, troops took control of the country's petroleum production facilities, according to the General Command of the Bolivian Army. A document released by the Army explains that this action "seeks to assure that the production structures will continue to function, so as to guarantee that normal levels of energy resources will be available to meet both international obligations and to supply the internal market."
According to Folha Online, Petrobrás is responsible for 15% of Bolivia's GDP, and Bolivian natural gas accounts for half of local consumption in Brazil — a total of 26 million cubic meters daily.
Lula met with cabinet ministers early yesterday to refine a strategy for the way forward. Shortly thereafter, referring to his country's significant fossil fuel exports to Brazil, Bolivian Vice President Alvaro García Linera reassured its neighbors that, "That is guaranteed. No one's going to touch it."
The two countries will, however, negotiate prices. Commenting on his plans for working with the Bolivian government, Lula said he understood the move, that the neighboring country was "doing what Brazil had done in the past." The President outlined his desire to negotiate to "defend Brazilian businesses while respecting Bolivian sovereignty." At the same time, the Brazilian leader made clear that while he supports the rights of the Bolivian people, those rights do not allow them to "impose their sovereignty" on Brazil. Lula is set to meet tomorrow with Morales, as well as Argentinian President Néstor Kirchner and Hugo Chávez of Venezuela.
Reactions from Petrobrás have been less cordial. The state corporation has announced plans to "use all judicial instruments to guarantee the interests of the business," according to Ildo Sauer, Director of Gas and Energy for the firm. They are set to release details later today.
Sources:
- Lula "entende" Morales e não quer radicalizar
- Bolívia garante fornecimento de gás ao Brasil, mas vai negociar preços
- Bolívia ocupa Petrobras e nacionaliza exploração de petróleo e gás
- Petrobras diz que recorrerá a tribunal internacional
- Lula diz que Bolívia "não pode impor sua soberania" ao Brasil
posted by Ben @ 2:00 PM
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