Royal Dutch Shell Plc  .com Rotating Header Image

AP Worldstream: Wresting control from foreign interests, Bolivian government names directors to energy companies

Wresting control from foreign interests, Bolivian government names directors to energy companies
CARLOS VALDEZ
AP Worldstream; May 10, 2006

var html = getInAdHTML(“box”,FTSite,FTSection,FTPage,FTIndustry); document.write(html);


if (showAd == 1) { var o = DOMGetElement(“artAd”); if (o) { DOMElementShow(o); } } else { var o = DOMGetElement(“artImg”); if (o) { DOMElementShow(o); } }

Bolivia is taking new steps toward wresting control of its natural-gas industry from foreign companies, naming Bolivian directors to oversee the companies' transition to majority ownership by the government.

Under last week's nationalization, Bolivia's state energy company Yacimientos Petroliferos Fiscales Bolivianos, or YPFB, will take majority control of all energy operations in the country and set gas prices. Foreign companies have six months to negotiate their contracts or leave the country.

On Monday, the government named directors _ mostly lawyers and military men _ who will represent YPFB on the boards of the Bolivian subsidiaries of the foreign companies. Each company will have four directors representing YPFB and three directors for the foreign investors.

The Bolivians will not take the helm at the subsidiaries until YPFB takes majority control of the companies' shares, which is currently under negotiation, said Andres Soliz, Bolivia's hydrocarbons minister.

The new Bolivian directors were named for Bolivia Refinacion SA, a subsidiary of Brazil's Petroleo Brasileiro SA, or Petrobras; Andina SA, part of Spanish-Argentine Repsol YPF; Chaco SA, a unit of Britain's BG Group PLC and BP PLC; Transredes SA, of British-Dutch owned Shell Corp., and Compania Logistica de Hidrocarburos de Bolivia, which has various foreign shareholders.

Executives from Petrobras will meet with the Bolivian government Wednesday to begin contract negotiations. Bolivia is seeking to raise the price of gas it sells to Brazil, which gets half of its natural gas supply from the neighbor.

Brazil, however, doesn't expect to reach a quick agreement over the price of Bolivian gas or compensation for the Brazilian assets it must hand over to Bolivia as part of the nationalization, Brazilian Foreign Minister Celso Amorim said Tuesday.

Negotiations between YPFB and Petrobras, will be “long and difficult,” Amorim told the Senate Foreign Relations Committee in Brasilia.

Amorim disclosed Brazil's president Luiz Inacio Lula da Silva had sternly expressed disappointment to President Evo Morales for the “abrupt” way Bolivia conducted the nationalization.

The complaint was registered privately with Morales during a hastily organized presidential conference on the nationalization last week in Argentina _ also attended by Venezuela's Hugo Chavez and Argentina's Nestor Kirchner.

Brazil, he said, chose to act quietly to avoid “a radicalization” by the Bolivian government.

Amorim didn't elaborate further on the exchange between presidents, but his remarks underlined the tone of upcoming negotiations in La Paz with oil companies of both countries.

YPFB's president, Jorge Alvarado, told Bolivian newspapers that he would not accept Brazilian suggestions of a 45-day deadline for a deal.

“They cannot assume that the contracts will be signed in 45 days,” Alvarado said in remarks published by several newspapers. “We cannot subject ourselves to any sort of pressure.”

Petrobras, which has invested roughly US$1.6 billion (A1.3 billion) in Bolivia and is the country's biggest consumer and taxpayer, said it wouldn't put any more money in Bolivia. But Brazilian President Luiz Inacio Lula da Silva suggested that Bolivia could get more Brazilian investment.

Bolivia also exports its gas to Argentina, but Monday said it suspected the country was breaking its contract and sending some gas onto Chile.

“Not even a molecule” of Bolivian gas should be delivered to Chile, said Carlos Villegas, Bolivia's planning minister.

Gas-hungry Chile could offer Bolivia a large market, but Bolivian governments have long refused to sell gas to its neighbor because of a long-standing territorial dispute that caused Bolivia to cut off diplomatic relations with Chile in 1978.

Associated Press Writer Harold Olmos contributed to this report from Rio de Janeiro, Brazil.

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “AP Worldstream: Wresting control from foreign interests, Bolivian government names directors to energy companies”

Leave a Comment

%d bloggers like this: