Nationalization of Natural Gas in Bolivia

Bolivian President Evo Morales announced the nationalization of natural gas resources on the 1st, ordered the army to station in natural gas fields across the country, and required foreign companies investing in Bolivia's natural gas field to hand over control, otherwise they will be expelled.

Morales announced the news that day in the San Alberto gas field in Tarija province in southeastern Bolivia. This gas field is currently exploited and operated by Petrobras.

Morales said he had ordered the army and engineers from Bolivia's state-owned Petroleum Mining Company to enter natural gas and oil fields operated by foreign companies, requiring these foreign companies to sign new agreements with the Bolivian government within six months to transfer control of production and operations. to the Bolivian state-owned oil and mining company, and then receive a portion of the profits from the Bolivian state-owned enterprise. If foreign companies are unwilling to accept such conditions, then they must leave Bolivia.

Morales also emphasized that the Bolivian government will not confiscate the properties of these foreign companies. Bolivian Vice President Alvaro Garcia said that after President Morales issued the above order, the military and engineering personnel have begun to control and take over 53 major energy facilities across the country, including gas fields, gas pipelines and refineries, to avoid These energy facilities were damaged.

Although the order shocked foreign companies, "We have been informed of the news and are currently conducting an emergency review," Exxon Mobil spokesman Bob Davis said.

Associated Press reporter Alvaro Suazo analyzed that Morales’s nationalization policy of natural gas resources was not thorough and still reserved production and operation shares for foreign companies. This is a wise move by Morales, because Bolivia currently cannot exploit its abundant natural gas resources on a large scale with its own technology and capital.

In the mid-1990s, during the privatization wave in Latin America, Bolivia's state-owned oil and mining company withdrew from most of its production and operation areas and became a state-owned enterprise similar to a management organization. Now it has re-entered the production and operation areas and is faced with funding problems. and staff shortage problems.

About 20 foreign companies from the United States, Britain, France, Spain, Argentina and Brazil are involved in Bolivia's natural gas industry, with a total investment of more than US$3 billion.

While foreign oil companies are making huge profits in Latin America, Latin American countries are not reaping much of the benefits. Therefore, Latin American countries have begun to reflect on the privatization process of the energy industry, and some countries have restarted the nationalization of the energy industry.

In addition to Venezuela and Bolivia, the Ecuadorian parliament also passed an oil reform bill last month, stipulating that foreign companies must hand over 50% of their profits to the Ecuadorian government.