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Bolivia gambles on energy and wins – for now
Colin McMahon, Chicago Tribune via Kansas City Star
When President Evo Morales ordered Bolivia’s energy fields nationalized last May and sent federal troops into its abundant gas fields to make his point clear, critics warned that he would isolate Bolivia and choke off its main source of revenue.
But with Morales about to celebrate his first anniversary in office Jan. 22, most Bolivians regard the nationalization as a tremendous victory.
No foreign energy companies have left. The revenues that critics warned would disappear have instead multiplied. And Morales is riding a new surge of popularity: The former coca grower and political outsider who became Bolivia’s first indigenous president has pushed his approval ratings back up over 60 percent nationally.
“The energy deal is his greatest success so far,” said Michael Weinstein, a senior analyst with the Power and Interest News Report in Chicago. “Morales has been a masterful pragmatist.”
Doubts remain. Analysts in Bolivia and neighboring Brazil, home to Petrobras, the biggest foreign investor in Bolivia’s energy industry, say Morales’ short-term victory could backfire if companies refuse to make long-term investments.
They warn that Morales might overplay his hand, trying too hard to follow the script of his mentor, Venezuelan President Hugo Chavez, without the same petroleum riches that make Chavez so formidable and Venezuela so impossible to ignore.
Yet for now, what most Bolivians see are high gas prices and new contracts that give the Bolivian state a far greater share of the profits reaped by Petrobras, Spain’s Repsol and other international energy companies.
How this all turns out is important not just for Morales and Bolivia.
(16 Jan 2007)
Oil firms face Latin American woe in Venezuela and Honduras
BBC
Foreign oil firms have come under increasing pressure in Latin America as Honduras and Venezuela try to exert greater control over the industry.
US oil companies have said they will stay in Honduras, despite the state saying it will temporarily seize control of oil storage containers. The Honduran move, made on Friday, will affect firms such as Chevron and Esso.
The news comes as Venezuela refused to negotiate with foreign oil firms over its wider nationalisation plans. Venezuela’s President Hugo Chavez recently promised to nationalise the biggest phone and power companies and on Monday, oil minister Rafael Ramirez said “there was no possible negotiation” with foreign firms.
However, Mr Ramirez conceded that private firms could own minority shares in the Orinoco River basin oil projects, an area known for lucrative contracts.
Even so, Venezuela would retain “an effective majority control”, he said.
(16 Jan 2007)
