Bolivia takes over four oil companies and one communication enterprise (updated)

Caracas, Venezuela, 1 May 2008. Today, the Bolivian government of Evo Morales Ayma formally nationalized four oil companies: Transredes (Shell), Andina (Rapsol), Chaco (BP) and CLHB (British Ashmore Energy). From now on they will be under the direct control of the National Bolivian Oil Company - Yacimientos Petrolíferos Fiscales Bolivianos (YPFB).  The nationalization action was not duly agreed by three of the four oil companies. Only Andina - a subsidiary of Spanish Repsol with 18 oil fields in Bolivia- decided to negotiate 50 % of its shares with the government in an early Joint Venture deal. The remaining companies will negotiate the terms of the sales of their share to the government but in a weaker position.

Nationalizations were planned since 2006 but it is only now that they have taken place. But why now? It is only now that Morales administration managed to negotiate the terms of the take over. Oil prices are high and its revenues would fit any socialist government trying to fund social oriented policies. On the other hand, by nationalizing today, Evo Morales administration has move ahead of the turmoil that might follow the Sunday referendum. The US seem to be keen on promoting separatist forces in an oil rich provinces of Bolivia.

Bolivia is currently facing a major internal crisis. Separatist local government prefects of Santa Cruz, Beni, Pando and Tarija have proposed a referendum to become autonomous from La Paz. The Santa Cruz referendum is expected to take place on Sunday. OAS and other regional governements have tried to prevent the referendum and its possible violent outcome.  Cuban Fidel Castro warned over the possibility of a coup in Bolivia as a result of the current crisis.

In a similar move today, the Evo Morales Ayma government also nationalized the telecommunication enterprise Empresa Nacional de Telecomunicaciones (Entel) which was under the management of Euro Telecom.  Entel was partially privatized in 1996 under the Presidency on Neo Liberal Bolivian President Gonzalo Sánchez Lozada. Italian Stet bought 50% of the shares, which it then sold to Euro Telecom. This nationalization was already proposed two years ago but Euro Telecom would not agree to the proposed terms. Thus, it filed a case at the International Center for the settlement of Investment Disputes (ICSID) in October 2007. In response to the filing of the case, Bolivia left the ICSID. It then continued direct negotiations with Telecom but to no avail. Despite de recent nationalization, the ICSID Case No. ARB/07/28 remains pending.  

PS: In an interview with Telesur, Bolivian Minister for Oil Carlos Villegas revealed that one of the four newly nationalizes petroleum companies was funding separatists. However, Villegas did not mention the oil company by its own name-

Sources: ABI, ICSID, Unionradio, Prensa Latina, Telesur, El Mundo.es, RFI, VTV, YVKE, El Universal.

Related story: OAS envoy arrives at Bolivia to mediate in separatist crisis (updated)