In case you missed it, earlier this week, President Evo Morales nationalized Bolivia’s natural gas reserves sending soldiers in to secure the gas fields. He also gave an ultimatum to foreign investors to renegotiate the terms of their contracts and wants to audit their financial records. The government’s justification for the takeover is that the contracts given to the oil companies are not constituional since they were not individually approved by Congress as required.
Under
the terms of the decree, some 25 private gas companies have six months to renegotiate
their contracts with the Bolivian government or be expelled, and they will be
forced to sell at least 51 percent of their holdings to the state.
This has prompted oil companies to reasses their investment plans and pleased Evo’s indigenous supporters. Although foreign oil companies might pull out, Venezuela is already stepping in to help.
Chavez and Morales emerged from a three-hour meeting to
announce a "strategic alliance" between Bolivia’s state-owned
YPFB and Venezuela’s PDVSA to develop gas industrialization
projects, a partnership to be formalized later this month.
Jefferson Marley of the Washington Post recommends reading the Financial Times of London to get a fair picture of waht is going on but laments having to pay for such "centrist coverage".
Today’s FT reports:
"The government says it will purchase a majority stake [in privatized
natural gas operations] without expropriation. Andrés Soliz Rada,
hydrocarbons minister, plans to create a special government auditor to
determine the value of any compensation."In other words, this isn’t war. This is let’s have a meeting.
Finally, Aleksander Boyd remarks that this is just Morales following the Chavez’s example, and Americans and Europeans shouldn’t be so shocked by this move.
It is also true that he’s following the chavista booklet: i.e. win the
presidency, purge institutions whilst waiting on the National
Constituent Assembly that will do away with all elected powers, govern
by decree, shred contracts… How can anyone be surprised, we have seen
this movie before, haven’t we?