Brazil and Bolivia Can’t Reach Accord One Year After Oil Nationalization

Brazilian president Lula and Bolivian counterpart Morales Bolivia's president Evo Morales denied having squabbled with Brazil's Lula da Silva during the recent energy summit in Venezuela, but admitted having discrepancies over how much Bolivia must pay for the two nationalized oil refineries from Petrobras.

"I want to say that we have not had differences to the extent which from Brazil have been interpreted as a fight with my good friend Lula", said Morales in La Paz after having underlined his "respect and admiration" for the Brazilian leader.

"With companion Lula we are close friends and have many coincidences", he insisted rejecting versions in the Brazilian press that dialogue in Venezuela between the two leaders was "harsh" and that Lula rejected Bolivian conditions for the nationalization of Petrobras refineries.

Morales did admit "discrepancies" as to how much Bolivia should pay Petrobras for having taken control of the refineries, which continue to be managed by the powerful Brazilian corporation in spite of the May 2006 nationalization process.

The difference apparently rests somewhere between the commercial and inventory value of the refineries which was what Petrobras deposited back in the last decade when it took over the plants and refurbished them.

"That is in debate. Dialogue will continue with the sponsoring of the presidents of Brazil and Bolivia, between Petrobras and the Bolivian government owned oil company, YPFB", said Morales.

The two refineries one in Cochabamba and the other in Santa Cruz were purchased by Petrobras from the Bolivian government in 1999, having paid US$ 104 million.

According to the Bolivian press Morales is trying to have the two refineries back under government control by May first, on the first anniversary of the nationalization process.

At the beginning of the year Hydrocarbons minister Carlos Villegas estimated that in May the Bolivian government should have concluded negotiations to take control of five of the nationalized oil companies which remain under private management.

Besides Petrobras refineries, the group includes Andina (Repsol-YPF affiliate); Transredes (Shell & Ashmore); Chaco (British Petroleum); and the Hydrocarbons Logistics Company that includes Peruvian and German investors.

In related news the Bolivian government announced that natural gas exports to Argentina are "absolutely normal" in spite of the ransacking of a border station belonging to the gas pipeline connecting both countries, which happened during a regional dispute.

"The flow of five million cubic meters per day to Argentina and lesser volumes to the domestic market from the province of Gran Chaco has not been interrupted", asserted Galia Morales from Bolivia's oil regulating body.

"Pumping is on automatic pilot" was confirmed by the companies involved.

Different counties from Gran Chaco province are disputing the possession of a gigantic natural gas deposit in the area.

Mercopress

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