Bolivias left wing President Evo Morales has said that foreign energy firms should not expect compensation for assets that are now under state control, BBC Online reports Thursday.
His comments seem to contradict those from the head of the state-owned energy firm, who said earlier he believed Brazil’s Petrobras should be paid. The confusion has arisen after Bolivia unveiled plans to take greater control of its vast natural gas fields.
Mr Morales explained in Vienna at a summit of Latin American and European leaders that foreign firms would be allowed to recover their investment in Boliva and some earnings, but that they would not be compensated because they could not own the poor Andes-countrys natural resources.
– If we were to expropriate their assets, there could be talk of compensation. But that’s not the case, he said. Referring to Petrobras, the Brazilian company that is the biggest investor in Bolivias energy industry, Mr Morales said the firm had been acting in an illegal manner.
Petrobras has spent more than 1 billion US dollar in the country and controls 45 per cent of its gas production. Brazil is the largest importer of Bolivian gas.
The two sides had met at a ministerial level on Wednesday and emerged saying they would work together to renegotiate contracts and implement plans to raise gas prices. Before the meeting, Jorge Alvarado, the head of Bolivias state energy firm Yacimientos Petroliferos Fiscales Bolivianos (YPFB), said that Petrobras needed compensation because its assets had been nationalised, not seized.
Earlier this month, Bolivian leader Evo Morales said private energy firms must review their contracts and sell controlling stakes in energy companies. Following the announcement, Bolivia took control of two Petrobras refineries, sparking complaints.
Under the terms of the nationalisation, foreign energy firms are required to agree new contracts with the state-run firm YPFB within 180 days. Should they fail to do so, they would have to pull out of the country.
While discussions are taking place, Bolivia will keep up to 82 per cent of the firms revenues, allowing them just the remaining 18 per cent. In all, about 20 foreign companies are affected, including BP, British Gas, ExxonMobil, Total, and Repsol-YPF.
