By Hal Weitzman in Guayaquil and Ed Crooks in London
Published: November 28 2006 02:00 | Last updated: November 28 2006 02:00
Bolivia’s government wants to buy a controlling stake in Transredes, the country’s oil and gas pipeline company that is quarter-owned by Royal Dutch Shell, President Evo Morales said on a visit to the Netherlands.
Mr Morales, who yesterday met Jeroen van der Veer, Shell’s chief executive, said the company had proposed investing in exploration in his country. He hoped the company would do so. Since coming to power, Mr Morales has backed down from a full-scale confrontation with international energy companies whose assets he initially threatened to nationalise.
Shell declined to give any details of the discussions that it described as fruitful and held in a good atmosphere.
The administration of Mr Morales signalled in May its intention to take majority control of Transredes as part of its policy of nationalising the country’s gas reserves, the second largest in Latin America.
Under Article 7 of the nationalisation decree, the state said it would buy enough shares to give it control of three former state companies privatised in 1996: Transredes; Andina, controlled by Repsol; and Chaco, part-owned by BP.
The Bolivian state currently retains a minority interest in these companies. The government said it would purchase a majority stake without resorting to expropriation and would create a special government auditor to determine the value of any compensation.
But there have been serious doubts about whether Bolivia has the resources to carry out such a purchase: in August La Paz was forced to call a temporary suspension to its nationalisation programme, citing lack of funds.
Copyright The Financial Times Limited 2006
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