Bolivia Nationalizes Gas Industry, Military Occupies Fields & Facilities

President Evo Morales of Bolivia announced May 1st that the gas industry of Bolivia is to be nationalized. All foreign companies have a six-month limit to renegotiate their contracts, funneling all business through the state. Troops were ordered to secure the gasfields and installations used by foreign gas companies, including those of British Petroleum and Exxon-Mobil.



I wonder if this is a harbringer of things to come, particularly as regards Venezuela, where US companies in particular have much higher investments than in Bolivia?

From the article below:

Morales is following the path of Chavez, his populist political mentor, said Pietro Pitts, editor-in-chief for the Venezuela-based LatinPetroleum.com.

"You can call Bolivia Venezuela Part II because it seems like he (Morales) is going to try to do the same thing that Chavez is doing," said Pitts, referring to giving the state majority control of hydrocarbons.

Ecuador's Congress last month ratified a hydrocarbons reform law designed to cut into windfall profits of foreign crude producers, among them U.S.-based Occidental Petroleum Corp.

The law would give the government 50 percent of oil company profits whenever the international oil market exceeds the prices established in existing contracts. Most of those deals were pegged to 1990s oil prices when crude was worth a fraction of today's market.

Related News Links:
news.yahoo.com

Related AboveTopSecret.com Discussion Threads:
NEWS: Chavez: U.S. Planning to Invade Venezuela

[edit on 1-5-2006 by koji_K]

This is a huge deal IMHO. This may set off a wave of nationalization of Oil industries and I agree that Venezuela may be next.

Wonder if we will see $5.00 a gallon gas soon

Hello all,

In may be a surprise to some people, but 75% of the oil imported by the US comes from canada and south america.

I think uncle bush is getting really pissed with those news, and again, gas prices are going straight up.

How long is it going to take, until US economy breaks down?

This is economic terrorism. Are the US going to bomb them?


Crustas

[edit on 1-5-2006 by crustas]

Well any country that has natural resources has the right to either privatized them or nationalize them is up to them.

Unfortunately more often than not it will fall in the hands of the dictator in power when its nationalized for his private money making pot.

Usually the citizens of the country are the last ones to be asked about what they want their government to do with the nations resources because the people has no voice.

FYI... a story from last September: Half of Canadians Want Oil Industry Nationalized

Bolivians can do what they want with their oil and so can other countries.

The US has no "rights" trumping anybody else's.
.

FredT and Marg- I agree with both your comments.

If there was a time when a wave of nationalizations in South America seemed likely, it's now.

As for nationalization itself, there's nothing inherently wrong with a democratically elected government asserting control over resources that belong to the people of that nation, but it must be done properly. A state owned company must be very transparent, so the people can be sure that their resources are being used for their own benefit, and competently. Debts and liabilities owed to other parties should be honored, and they should be compensated for any assets appropriated. I guess we'll see how it goes in the near future. Given how suddenly this occured (though not unexpectedly), it seems likely that it will be a bumpy transition.

[edit on 1-5-2006 by koji_K]

Here is the website for Bolivia's state owned petroleum company, Yacimientos Petroliferos Fiscales Bolivianos (YPFB):

www.ypfb.gov.bo...

It's rather hard to access at the moment and does not appear to have any information as yet related to recent events, but might be interesting to keep an eye on.

[edit on 1-5-2006 by koji_K]

Simply stated, this represents state sponsored blackmail. When they wanted the investments of foreign owned oil companies to develop and run their vast gas fields they sure sang a different tune, but now that the investments have been made and the infrastructure developed they want to move in and take over. That is not what you would call fair and honorable dealing. Let's see how well they are able to attract additional investments in other areas of their economy now. I would suspect the smarter companies are even now starting to liquidate their holdings and preparing to depart the country. This move may very well cripple the economy of their country for many, many, years.

[edit on 2-5-2006 by Astronomer70]

I wonder if this has anything to do with the new pact Bolivia has with Cuba and venezuela. I sense some shifting to Communism due to all this international unrest and displeasure with the US.



Pie

Even though it is generally thought that socialism is essentially dead, we are going to be seeing more and more of this as the century progresses. As resources become depleted you are going to see especially poorer nations taking them over with the common theme of why should multi-nationals make all the profits when we need the money ourselves. We could see it in the U.S. as well but it would take alot for it to happen. The wars for territory are over and globe spanning generals are history...the next wars will be over diminishing resources, water, oil, fisheries, forests and the like and it is not at all certian that America will come out on top.