Puerto Iguazu, Argentina – South American leaders are making peace with Bolivia’s decision to nationalize its natural gas sector, hoping to diffuse tensions sparked by the Andean nation’s radical petroleum industry takeover.
The leaders of Argentina, Brazil and Bolivia also agreed to open talks on new prices for Bolivia’s natural gas at a summit Thursday in the Argentine city of Puerto Iguazo.
At the summit, Brazilian President Luiz Inacio Lula da Silva suggested that state-owned company Petroleo Brasileiro SA could reverse its decision, announced a day earlier, to freeze investment in Bolivia because of the nationalization decree.
“As a company, it will always invest wherever it sees a chance to obtain a return for its investments,” Silva said after meeting with Bolivian President Evo Morales, Argentine President Nestor Kirchner and Venezuelan President Hugo Chavez in this city along the border with Brazil.
Upon his return to Bolivia, Morales told reporters the leaders “expressed their great solidarity and said they would keep investing.” Brazil is the largest consumer of Bolivian gas and Petrobras is among the biggest producers in Bolivia, where the industry was privatized in the 1990s until Morales nationalized it Monday and sent troops to guard foreign gas installations.
Brazil and Argentina, another consumer of Bolivian natural gas, fear that if Morales hikes prices it could adversely affect their economies. The nations use Bolivian gas for power generation, cooking and to fuel cars.
Morales has threatened to evict all foreign oil companies if they don’t sign contracts within six months surrendering control of the entire chain of natural gas production and giving Bolivia’s cash-strapped state oil company – Yacimientos Petroliferos Fiscales Bolivianos – a majority stake in all operations.
After meeting for more than three hours, the four leaders issued a statement of respect for Bolivia’s right to make sovereign decisions about its natural resources.
Silva said the leaders also agreed that differences over the prices Argentina and Brazil pay to Bolivia for natural gas and foreign participation in Bolivian production “would be discussed bilaterally between the Bolivian and Brazilian governments and between Petrobras and YPFB.” “The important thing is that gas supplies for countries needing them have been guaranteed and that prices will be discussed in the most democratic form possible between all parties involved,” Silva added.
Morales said the presidents “all agreed to aid Bolivia economically.” Chavez bluntly rejected critics who charged he had worked behind the scenes with Morales, with help from Cuba, on Bolivia’s nationalization plan.
“There are those who wish to stoke tensions,” Chavez said after flying to the summit with Morales, widely considered his leftist political protege, from the Bolivian capital of La Paz.
“We want to stamp them out.” And Silva strongly rejected suggestions that Morales and Chavez – both of them socialists – were teaming up in a bid to wrest concessions on natural gas from Brazil and Argentina, home to South America’s first and second largest economies.
“I don’t believe there’s an alliance between Bolivia and Venezuela to confront or fight with Argentina and Brazil,” Silva said.
Chavez called Morales’ nationalization decree historic, saying “there may be differences over the manner in which it is done, but that’s OK.” Venezuela’s state-owned oil company Petroleos de Venezuela SA “is willing to invest its experience and its modest resources to certify the presence of the largest reserves possible in Bolivia,” Chavez was quoted as saying by Venezuela’s state run news agency.
Morales, who won a landslide victory in December, has vowed to take back control of Bolivia’s natural resources, including its natural gas reserves, mineral wealth and forests.
In Europe, there was still concern about Morales’ nationalization decree, both among governments and the mostly European companies that extract Bolivian gas.
