For Brazil’s Lula Depending So Much on Bolivia’s Gas Was Strategic Error

The relationship between state-run Brazilian oil giant Petrobras and Bolivia goes back before the governments of presidents Luiz Inácio Lula da Silva and Evo Morales.

Petrobras signed a contract with the Bolivian state-run oil company, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), as far back as 1991, although it has been operating in Bolivia only since 1996, when it began making large investments there.

During the decade it has operated in Bolivia, Petrobras has invested some US$ 1 billion; however, only around US$ 68 million was spent during the Lula government.

Of course, the biggest and most important investment made by Petrobras was the gas pipeline connecting the two countries, the Bolivia-Brasil gas pipeline, which stretches for over 3,100 kilometers, almost 2,600 of them in Brazil.

Until Monday, May 1st, when president Evo Morales nationalized his country’s energy sector, Petrobras controlled 46% of Bolivia’s natural gas reserves, produced all the gasoline and diesel fuel used in that country, had made 20% of all foreign direct investments in the country and its various economic activities accounted for around 18% of Bolivia’s GDP.

In his comments, President Lula admitted that Brazil had made a "strategic error" in depending on Bolivia for over half its needs for natural gas.

"It is not a good idea to be so dependent on one source for so much of our energy. And a source that is not ours," said Lula.

Agência Brasil

Tags:

You May Also Like

A Minute of Silence in Memory of Morality in Brazil

Unfortunately, the corruption scandals involving the Brazilian Senate have become commonplace. It’s worth noting ...

Brazilian Government Gets Better Marks for Education, But Worse for Economic Policy

The CNT/Sensus poll released Tuesday, September 13, shows that people’s evaluation improved in all ...

US Buys 26% of Brazil’s Shoes. Exports Are Also 26% Down, However

In the first six months of 2009, Brazil exported 65.8 million pairs of shoes. ...

Brazil: Threats and Altercation Inside Rousseff Administration’s Coalition

The vice president of Brazil, Michel Temer, admitted publicly “differences” inside the administration of ...

Lula Talks About Cuts in Interest and Market Soars in Brazil

Latin American markets continued to power higher alongside modest strength from the U.S. A ...

Brazil’s Lula Calls for More Daring from Entrepreneurs

Brazilian President Luiz Inácio Lula da Silva reinforced this Monday, May 2, the importance ...

Federal Dental Program Caring for 60 Million Brazilians

Brazil’s Ministry of Health’s Buccal Health program, which now has a total of 10,240 ...

Killings in Brazil and the Blame-it-on-the-poor Syndrome

The Constitution of Brazil says, in its Article 5, that Brazilians and foreigners residing ...

Tax Breaks Give Brazilian Auto Sales a Jump

Thanks to a temporary Brazilian government tax break that reduces car prices Brazil's auto ...

Brazil’s Lula Can Still Redeem His Name by Foregoing a Second Mandate

Perhaps never before in the history of Brazil have persons with such respectable biographies ...