Puerto Iguazu, Argentina – Venezuela’s Hugo Chavez, the main ally of Bolivia’s Evo Morales in the latter’s radical nationalization of oil and gas reserves, acknowledged Thursday that the measure threw an element of “tension” into the four-nation summit here.
Chavez commented before he and Morales sat down with Argentine President Nestor Kirchner and their Brazilian counterpart, Luiz Inacio Lula da Silva, in a session called “urgently” by the Brazilian leader.
His nation, by means of its state energy giant Petrobras, is the biggest operator in the Bolivian fossil-fuel sector, controlling 45 percent of the Andean nation’s huge reserves.
Chavez, a former army colonel and antagonist of the United States, insinuated that the “tensions” were being fanned from the United States, saying that “they come from the north” with the alleged aim of preventing greater unity in Latin America.
The tensions to which the Venezuelan leader was alluding appeared evident even at the hotel restaurant, where Brazilian and Argentine ministers and advisers drank coffee and talked separate from the members of the Bolivian and Venezuelan delegations, who chatted among themselves.
The meeting of heads of state in this northeastern Argentine city was organized on short notice at the request of Lula, who was alarmed by the impact of Morales’s move on Brazil’s economy, diplomatic sources told EFE.
Before he left La Paz for Argentina, Morales told his country’s official ABI news agency that Brazil and Argentina, the main buyers of the natural gas that is Bolivia’s principal resource, must get used to the idea that they will be charged more for the fuel.
“Yes, Brazil and Argentina will have to raise the price they are paying for the gas,” Morales was quoted as saying.
The Bolivian leader said the meeting here was not to negotiate anything, but to move ahead with energy integration among the South American countries.
“The nationalization was a sovereign decision and we are not going to negotiate anything about that issue,” Morales told ABI.
Regarding the announcement Wednesday by Brazilian state-run oil company Petrobras that it would stop investing in Bolivia due to the new situation in the energy industry there, Morales said that was a sovereign decision made by Brazil.
“They can try to blackmail us, but it is not going to be possible for them to have a great company with our resources and leave our country’s economy in bad shape,” Morales said.
The Bolivian leader also said there were more than enough oil companies in the world interested in doing business in Bolivia, a reference to the protests lodged by Petrobras and Spain’s Repsol YPF over the nationalization of the Andean nation’s energy industry, a move that gives the state “absolute control” over oil and gas resources.
Brazil’s government previously had termed the nationalization “unfriendly,” and Petrobras, which is the biggest investor in the Bolivian oil and gas industry, said it was weighing its legal options.
Some 75 percent of the natural gas imported by Brazil from Bolivia is consumed in the industrial center of Sao Paulo state, the engine of the Brazilian economy.
Buenos Aires, for its part, is in the process of negotiating to expand its purchases of natural gas from Bolivia, which recently joined a project to build a continent-spanning gas pipeline from Venezuela to Argentina via Brazil.
Bolivia, which has the continent’s second-largest reserves of natural gas after Venezuela, is supposed to supply up to 7 million cubic meters of gas per day to Argentina until the end of 2006 at a price of $3.18 per million British Thermal Units.
But Argentine government sources say that La Paz now wants to hike the price by nearly 50 percent, to $5 per million BTUs.
Bolivia provides about a quarter of Argentina’s natural gas, and the Kirchner administration is worried that a spike in the cost of fuel will threaten the country’s ongoing recovery from the severe 1998-2002 recession.
Prior to this week’s news of the nationalization, Bolivia and Argentina had agreed to name a bilateral commission to define the terms for an expansion of Bolivian gas shipments to 20 million cubic meters daily.
Hanging on the success of that effort are plans for a new $1.5 billion pipeline in northeastern Argentina.
