Saturday, January 24, 2009

Bolivia nationalizes one of the last remaining foreign owned natural gas fields

Bolivia's President Evo Morales, on Friday nationalized one of the last remaining gas fields of which a foreign entity was the still the major share holder. Standing alongside his supporters, military and thousands of indigenous leaders Morales explained his "regret that some energy companies do not respect Bolivian laws."

President Evo Morales

The Carrasco gas field is located in the central province of Cochabamba, which by most accounts is Bolivia's wealthiest. Prior to nationalization, the Chaco gas company controlled the production from this field.

British Petroleum (BP) owns 60% of Pan American Energy which in turn owned until yesterday, 51% of Chaco. The remaining 49% was already in Bolivian control... by the country's state-owned petrol company, Yacimientos Petrolíferos Fiscales Bolivianos YPFB which owned the remaining 49%.

Chaco, which operates about a dozen gas fields in Bolivia recently announced plans that it would invest $64 million to increase gas production in the country. Despite the good will, Hydrocarbons Minister Saul Avalos, explained the government was not able to reach an agreement with Pan American Energy on how to arrange for majority control to pass to YPFB.

There are interesting developments from the Andean nation. A mere two days before the referendum on the new constitution President Morales has proposed.