Rio de Janeiro – A federation representing firms in Brazil’s industrial heartland expressed doubts Tuesday that Bolivia will remain a reliable supplier of natural gas in the wake of La Paz’s decision to nationalize its fossil-fuel resources.
Spokesmen for Fiesp, made up of companies in Sao Paulo state, said the nationalization could have drastic consequences for the Brazilian market.
“In the medium and long term there will be a serious problem in the supply of gas, since many industries depend on Bolivian product and we don’t know how the negotiations will end,” Fiesp energy analyst Luiz Gonzaga Bertelli told reporters.
Wealthy Sao Paulo state, which generates a third of Brazil’s GDP, depends on Bolivia for 80 percent of its natural gas.
Any supply interruptions will have a greater impact on industrial users than on consumers who use natural gas to cook or power their vehicles, Fiesp said.
Two other Brazilian states, Mato Grosso and Mato Grosso do Sul, get 100 percent of their gas from Bolivia, while Rio Grande do Sul receives three-quarters of its supply from the neighboring Andean nation.
Some business leaders here say they fear La Paz will impose a drastic price increase on the gas it sells to Brazil, which currently pays $3.25 per 1 million British Thermal Units.
Officials in the government of Bolivian President Evo Morales often point out that natural gas fetches $7 per 1 million BTU on world markets.
But Petrobras, the Brazilian state-owned giant that holds the biggest gas concessions in Bolivia, says that the $7 price applies to liquefied natural gas shipped over long distances by tanker, a line of business unavailable to the landlocked Bolivians.
Company CEO Sergio Gabrielli said recently that Petrobras will depend on natural gas from Bolivia until at least 2010.
The chairman of Brazil’s National Confederation of Industry, Armando Monteiro Neto, agreed with his colleagues that La Paz’s “unilateral” nationalization will affect bilateral relations.
At the same time, however, he downplayed worries about a cutoff of gas, noting that Bolivia’s “income depends in great part” on providing fuel to its giant and more prosperous neighbor.
Amid the complaints and gloomy predictions from Brazil’s business community, the leader of the oil workers union in Sao Paulo offered support for Morales’ decision to nationalize fossil fuels.
“If Brazil can have control of its petroleum (via Petrobras), why not Bolivia?,” union chief Antonio Carlos Spis asked rhetorically.
EFE
