From AP, Aug. 14:
LA PAZ — Bolivia’s decision to suspend a plan to nationalize its oil and gas industry has reinforced doubts about the ability of its state-run energy company to manage the country’s gas reserves.
The Hydrocarbons Ministry said Friday that the “full effect” of nationalization would be suspended because of a “lack of economic resources” at the energy company, Yacimientos Petroliferos Fiscales Boliviano.
Pietro Pitts, an oil industry analyst and editor in chief of the online magazine Latin Petroleum, said Sunday: “The truth is coming out. The state oil company in Bolivia doesn’t have the technical know-how, doesn’t have the capital and doesn’t have the experience to run those fields that were run for a long time by the bigger guys.”
The energy company has asked Bolivia’s central bank for $180 million in financing to assume complete control of the country’s production facilities. But Bolivian law prohibits the bank from extending credit to public entities except in emergencies.
The ministry also announced plans to restructure and modernize the company, which was partly privatized by Gonzalo Sánchez de Lozada in 1997 when he was president but renationalized in 2004. President Evo Morales nationalized Bolivia’s oil and gas industry May 1, seizing assets of international companies that had long controlled most of Bolivia’s considerable oil and gas reserves. He called for the company to be restructured within 60 days as a “transparent, efficient, and socially controlled” corporation.
Opposition leaders said the ministry’s announcement underscored the lack of progress made since Morales’s decree. Nationalization was a “media show,” said Fernando Messmer, who leads the congressional delegation for the conservative party Podemos.
“The refineries are still in the hands of multinational companies,” he said, many of which are not yet paying the Bolivian government the 82 percent share of revenue ordered by Morales.
Since May 1, the energy company, also known as YPFB, has failed to acquire a 51 percent share in Bolivian facilities owned by several international interests, including Petróleo Brasileiro, or Petrobras, based in Brazil and one of the largest operators in Bolivia.
“YPFB has demonstrated that as a business, it has nothing more than those four letters,” said Eduardo Pérez, director of Radio Católica Fides and an influential political commentator here.
Negotiations between energy company and Petrobras are set to continue on Sept. 14 in Bolivia. At issue is the price Petrobras will pay to export Bolivian natural gas.
Other foreign interests whose Bolivian operations were affected by nationalization include the Spanish-Argentine company Repsol, the French company Total and affiliates of the British company BP.
An association of Bolivian oil and gas companies announced that since May 1 more than 30 foreign and domestic petroleum businesses had ceased operations or taken their business to other South American countries.
Should the energy company fail to develop Bolivia’s still largely untapped oil and gas reserves, Pitts said, foreign investment will return to South America’s poorest country, but only when policy directions are explicit. “Before those guys come back into the picture, things are going to have to be very, very clear,” he said.
See our last post on Bolivia.