Bolivia has suspended its project to reclaim control over its oil and natural gas, throwing the nationalisation programme into chaos.
In a statement released last Friday, Bolivia’s Hydrocarbons Ministry announced that the ”full participation” of the state energy company, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), was ”temporarily suspended due to a lack of resources”. There were insufficient funds, it said, to pay compensation to foreign investors. The ministry said a $180-million loan was being negotiated with the central bank to revive the programme.
Bolivian President Evo Morales moved in May to recover control of the country’s oil and gas, triggering a regional dispute as army troops occupied natural gas fields run by foreign companies. There was widespread concern among Western energy companies such as BP and British Gas, which had stakes in the country. Brazilian oil giant Petrobras froze all investments in the sector, with other multinationals following suit and looking instead to neighbouring countries, such as Paraguay and Peru, for alternatives.
The restructuring of YPFB was supposed to take place within 60 days of the move, but financial analysts said last Friday’s announcement was a reminder that this had not happened and much of the country’s natural resources remained under foreign control. One of Brazil’s leading economic newspapers called the suspension a ”reality bath” for Morales.
In an editorial, the Valor Economico argued there were ”growing signs that, after the drunkenness of the nationalisation of oil and gas reserves … the hangover has begun” for Bolivia.
Bolivia’s decision to nationalise its oil and gas fields was widely seen as a humiliation for Brazilian President Luiz Inacio Lula da Silva, who had publicly supported Morales’s election. Brazil imports more than half its natural gas from Bolivia and stood to be one of the biggest losers. One newspaper carried a front-page cartoon of the Bolivian president holding a red-faced Lula in a head lock. — Â