Evo Morales nationalizes gas and petroleum reserves

by Daniel Merli and Yara Aquino
Brasília – With the words, "Considering that, through historical struggles at the cost of much bloodshed, the people have won the right to control our hydrocarbon riches..." president Evo Morales decreed the nationalization of Bolivia's oil and gas reserves, yesterday, May Day. Morales was acting in compliance with the results of a national referundum of July, 2004, in which the population voted to return ownership of the country's reserves to the state.

Under the terms of the nationalization decree, all foreign operators in the country have 180 days to comply with the new rules; the most important of which is that the Bolivian state-run firm, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), is to has complete control over commercialization and will "define domestic and export conditions, volume and prices."

In the 1990s, Bolivia's then-president, Hugo Banzer, began privatizing the sector. Three foreign companies took over petroleum and gas production. They were: the British BP, the Spanish Repsol and state-run Petrobras of Brazil.

This is not the first time Bolivia has nationalized its petroleum sector. In 1937 in confiscated the assets of Standard Oil. And in 1969 it confiscated the assets of Gulf Oil. In a speech celebrating the nationalization, Morales called his May Day decree the "third, definitive nationalization."

Translation: Allen Bennett