Bolivia protesters free police held over gas revenues

20 April 2007LA PAZ

Protesters in southern Bolivia on Thursday released 58 police they had captured one day earlier as demands for a larger share of natural gas revenues escalated in violent clashes.

Border Police commander Colonel Jaime Reyes said the officers were freed following an agreement between the Bolivian government and local authorities in Yacuiba.

Reyes was one of the police officers captured by demonstrators on Wednesday, one day after violent clashes left one person dead and 20 more injured as local residents stormed a natural gas pumping facility operated by the Transredes subsidiary of Anglo-Dutch energy firm Royal Dutch Shell.

The demonstrators also cut off roads leading to nearby Argentina as well as Paraguay and vandalized the Transredes facility.

Protests were also held in the nearby town of Villamontes, as residents of Gran Chaco province demand a greater share of royalties from the huge Margarita natural gas field amid rival claims by the neighboring O’Connor province.

Authorities rejected the protesters’ demand that the pipeline that supplies 7.7 million cubic meters (272 million cubic feet) of natural gas a day to Argentina be shut off until the dispute is resolved.

‘The national government cannot accept this because it would be a crime against the national economy,’ said presidential spokesman Alex Contreras. ‘We cannot lose 1.5 million dollars a day because valves are shut off.’

The official stressed natural gas supplies to Argentina were not affected by the protests.

While it is not yet fully operational, the Margarita gas field, which at the center of the dispute, is believed to contain 20 percent of Bolivia’s proven and probable natural gas reserves, which authorities say total 1.55 trillion cubic meters (54.74 trillion cubic feet).

Royalties from the field, operated by Spain’s Repsol YPF, amounted to 25 million dollars last year, when President Evo Morales announced the nationalization of Bolivia’s hydrocarbons sector.

The nationalization decree forced foreign companies to negotiate new contracts giving Bolivia a majority share of the revenues generated in the energy sector.

But political disagreements and mistakes in the new contracts have caused major delays, and Congress is currently working to approve 44 rewritten contracts with 10 multinationals.

South America’s poorest country, Bolivia has the region’s second-largest natural gas reserves, after Venezuela.