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Globe&Mail: Bolivia grabs control of its petroleum industry

Associated Press

LA PAZ, Bolivia — President Evo Morales signed into law Sunday contracts that give the government control over the operations of foreign energy companies, completing a process begun May 1 with the nationalization of Bolivia’s petroleum industry.

The deals, signed by the companies last month, also grant Mr. Morales’ government a majority share of the foreign companies’ revenues generated in Bolivia. Companies that signed contracts include Brazilian state energy giant Petrobras, Spanish-Argentine Repsol YPF, France’s Total SA, and British Gas, a unit of BG Group PLC.

Mr. Morales also announced Sunday that Royal Dutch Shell had agreed to transfer to his government majority control of its Bolivian subsidiary, Transredes, which operates the country’s largest network of gas pipelines.

Bolivia’s natural gas reserves are South America’s largest after Venezuela’s.

 “We thank the Bolivian people who have struggled to recover their natural resources,” Mr. Morales said in a signing ceremony at the presidential palace in the capital, La Paz. “We have now completed the first step. This process will continue next year with the recovery of other natural resources benefiting the Bolivian people.”

Mr. Morales has said he also plans to nationalize Bolivia’s mining sector.

Mr. Morales, Bolivia’s first Indian president, has vowed to reverse centuries of dominance by the country’s European-descended minority, granting greater political and economic power to the mostly poor indigenous majority.

Mr. Morales recently returned from a trip to Nigeria, which like Bolivia remains bitterly poor despite its vast petroleum reserves. On Sunday he said he hoped that nationalization initiatives similar to his own might lift oil-rich African countries from poverty.

“If we want to free ourselves as a people, if we want to resolve our social and economic problems, we must both liberate human beings and liberate their economies — their natural resources, especially,” Mr. Morales said. “Only then will there be justice and equality.”

The contracts signed by the president Sunday had been ratified by Bolivia’s Senate in a hastily called session last Tuesday night, during which legislators from Mr. Morales’ Movement Toward Socialism party also pushed through a sweeping land reform bill and an open-ended military co-operation pact with Venezuelan President Hugo Chavez.

The session ended a boycott by conservative legislators who intended to block Mr. Morales’ reforms. But opposition leaders have questioned the legality of the session, in which assistants of two absent senators were called in to vote.

The oil and natural gas nationalization’s successful completion has given Mr. Morales a sizable political boost. A poll published this week in the Bolivian newspaper La Razon found Mr. Morales’ approval rating leaping 17 points in November, to 67 per cent from a low of 50 per cent in October.

The poll of 1,019 residents in Bolivia’s four largest cities was conducted on Nov. 13-20 and had a margin of error of 3 percentage points. and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

1 Comment on “Globe&Mail: Bolivia grabs control of its petroleum industry”

  1. #1 Ross
    on Dec 3rd, 2006 at 23:59

    It seems that everyone is jumping aboard the “Putin Authoritarian / Energy-Whoring regime train”. Latin states assuming control over these assets, as well as the quiet but present Latin-Russian relationship, are two things that Shell, other oil majors and all oil consumers should be concerned over.

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