The Bolivian government pushed ahead with its moves to re-nationalise its energy industry, ordering foreign financial companies to surrender control over shares they administer for a public pension fund.
The Bolivian government on Monday gave Spanish Banco Bilbao Vizcaya Argentaria SA, or BBVA, and Futuro SA of Swiss Zurich Financial Services three days to hand over the assets they administer for a fund used to pay pensions.
The move would immediately give the government control over a large, but minority block of shares in three energy companies. The shares are worth an estimated $1,5-billion, according to Andres Soliz, Bolivia’s hydrocarbons minister.
Vice-President Alvaro Garcia Linera said attempts to negotiate with the financial institutions had been unsuccessful and the government was forced to issue a decree demanding the shares.
”Nobody is going to stop the nationalisation, no external force, and much less any conservative internal force that has tried to block this,” Garcia Linera said after signing the decree. Garcia Linera was apparently referring to a company official who said last week that the law would not allow the government to take the shares without paying compensation.
The three local energy companies involved are Andina SA, a subsidiary of the Spanish-Argentine Repsol YPF; Chaco SA, a unit of Britain’s BG Group PLC and BP PLC, and Transredes SA, of British-Dutch owned Shell Corp.
All three were once Bolivian state-run companies that were privatised in the 1990s. Foreign shareholders took majority control, while a little less than half the shares of each were put in a trust for the Bolivian people. The trust is used to pay a pension to all Bolivians over 65 years old.
The government insists it will continue to pay the pension, but said it will also use the funds to boost its cash-strapped state energy company.
The trust holds roughly 48% of Andina and Chaco and 34% of Transredes. To take majority control over the three companies, the government must still purchase shares from foreign shareholders.
The decree did not mention two other partially privatised companies: Bolivia Refinacion SA, part of Brazil’s Petroleo Brasileiro SA, and Compania Logistica de Hidrocarburos de Bolivia, which has various foreign shareholders.
On May 1, President Evo Morales ordered the takeover of his country’s 53 foreign-owned natural gas installations, sending white-helmeted military police with semi-automatic rifles to guard the continent’s second-largest gas reserves.
He gave the companies six months to negotiate new contracts or leave.
Since then, the government has begun initial contract negotiations with foreign companies operating in Bolivia, the largest being Brazil’s partially state-owned Petrobras and Repsol YPF.
Speaking on Monday to the European Parliament, Morales said that foreign companies could profit from their investments in the country — but that the state would control the oil and gas resources.
Meanwhile at the United Nations, Bolivia’s foreign minister vowed on Monday to push ahead with plans to nationalise the timber and silver industries, but promised that foreign investors could still make a profit in his country.
”We have been deprived of these natural resources on a daily basis and the people who benefited from these resources were not Bolivian,” David Choquehuanca said at an annual two-week United Nations forum meant to draw attention to the plight of indigenous people around the world. ”In fact these [old] laws were enacted in order to rob us, to deprive us of the very resources that were ours.” – Sapa-AP