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Brazil Calls Bolivia’s Oil Nationalization Unilateral and Unfriendly

With the words, "Considering that, through historical struggles at the cost of much bloodshed, the people have won the right to control our hydrocarbon riches…" president Evo Morales decreed the nationalization of Bolivia’s oil and gas reserves, Monday, May Day.

Morales was acting in compliance with the results of a national referendum of July, 2004, in which the population voted to return ownership of the country’s reserves to the state.

Under the terms of the nationalization decree, all foreign operators in the country have 180 days to comply with the new rules; the most important of which is that the Bolivian state-run firm, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), is to has complete control over commercialization and will "define domestic and export conditions, volume and prices."

In the 1990s, Bolivia’s then-president, Hugo Banzer, began privatizing the sector. Three foreign companies took over petroleum and gas production. They were: the British BP, the Spanish Repsol and state-run Petrobras of Brazil.

This is not the first time Bolivia has nationalized its petroleum sector. In 1937 it confiscated the assets of Standard Oil. And in 1969 it confiscated the assets of Gulf Oil. In a speech celebrating the nationalization, Morales called his May Day decree the "third, definitive nationalization."

Following the announcement of the nationalization of its oil and gas reserves by president Evo Morales, Bolivian troops occupied 56 oil fields and two refineries. Most of the occupied areas are run by foreign companies.

Petrobras’s Reaction

The president of Petrobras, José Sergio Gabrielli, said that the nationalization decree signed by Morales, was not discussed with the Brazilian oil company.

"During the talks we had with the Bolivians there was never any sign of such a harsh decision. The terms of the decree were never on the table, never discussed with Petrobras," said Gabrielli who was in the US attending an international seminar on petroleum. He is expected to return to Brazil this Tuesday, May 2.

At a press conference in Houston, Gabrielli did not dispute Bolivia’s right to make its own decisions. "They are completely autonomous, independent and responsible for what they do," he declared.

"But this was a unilateral decision, made in an unfriendly way, that forces us to evaluate our situation in Bolivia very carefully."

Gabrielli went on to say that Petrobras lawyers would be examining the decree to ensure that the company’s rights were protected.

"There are some details in the decree we will want more information on," he said. One problem is the fact that Yacimientos Petroliferos Fiscales Bolivianos (YPFB) will be responsible for all commercialization.

Agência Brasil

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  • Guest

    Cap and Blast
    The best thing that you can do when a nation steals your hard work from you is to take your machinery home. Wait and see how long it takes for the offending nation to concede their need for foreign investment, development, and technology. Standard Oil and Shell both learned the hard way. The best thing that Brazil can do in the face of such abject National Socialism (Nazi-ism) is to cement and cap our gas wells and destroy our equipment. We will never get it back and we have (at least) the satisfaction of knowing that the explotation of our hard work will not go to serve a growing military threat on our western border. Sr. Chavez and Morales have been working out this plan for several months now and their are plenty of Venezuelans who believe we are wasting the resources of the Amazon and will be quick to seize it based on our reaction to Bolivia’s overt act of war. We have a growing threat on our borders, the time to act is right now Sr. Presidente!

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