O Globo (Brazil): Lula acknowledges Boliva has right to nationalize gas

[Commie Pinko Dirtbag]

...and immediately starts brokering fair, good deals for Petrobras. This, ladies and gentlemen, is the power of talking smooth. :thumbsup:

http://oglobo.globo.com/jornal/economia/247037394.asp (in Portuguese; translated excerpt by yours truly below)

Right behind the losses

After the scare of Evo Morales' decree -- which nationalized the natural gas and oil reserves -- President Lula resumed negotiations with Bolivia yesterday (Tuesday). The first step was the agreement to negotiate a separate deal for gas prices between the two countries, which co-own a gas pipe. The second will happen tomorrow (Thursday), in a meeting in Foz do Iguaçu, which will also include the presidents of Argentina and Venezuela. The subject of the meeting will be energy security in South America -- Bolivia will be invited to join the South American gas pipe project.

In a phone call with Morales, Lula acknowledged Bolivia's right to defend its natural resources and declared Petrobras plans to stay in the country, but warned that the state company will use all possible legal fora to avoid losses caused by contractual changes. Morales, in turn, guaranteed there will be no disruption in the delivery of gas. He also promised to pay Petrobras for all shares to be transferred to Bolivian oil and gas state company YPFB.

Mods: the thread title is a translation of the front page headline, which is different from the article title.

[Selatius]

1. A pan-leftist South America is emerging

The corporatists are thinking of ways to destroy them now and bring them back under their boot of oppression.

[marmar]

2. I like the way South America thinks these days...

Hopefully that leftist bug is infectious.

[Robbien]

3. Thanks for the translation.

Australian papers are also saying that many analysts expect many of the oil companies and Bolivia will reach agreements.

Appears Morales' move got the talks started. Finally. Too bad it took such a drastic move to get to this point.

[Commie Pinko Dirtbag]

5. Which brings us to another bit of common wisdom:

Don't be a wimp.

[Vidar]

4. Good news continuing from South America. Thanks for posting.

[More Than A Feeling]

6. Good follow-up

I was wondering why Bolivia was including Brazil in its plans, when Brazil seemed (and has now proved to be) a natural ally.

[Commie Pinko Dirtbag]

7. Can't go around saying

"I'll nationalize fields from every non-compliant multinational except Brazilian and Venezuelan ones."

[Zynx]

8. Brazil won't pay more for gas, curtails investment plans: spokesman

http://quote.bloomberg.com/apps/news?pid=10000086&sid=aaJWB6KH_TnA&refer=news_index

Brazil Won't Pay More for Gas, Curtails Bolivia Plans (Update2)
May 3 (Bloomberg) -- Brazil's state-owned oil company Petroleo Brasileiro SA will challenge any attempts by Bolivia to charge more for natural gas and canceled all expansion plans in the country, Chief Executive Officer Jose Sergio Gabrielli said.

``It is very clear at this moment there is no economic viability of investing any additional money in Bolivia,'' Gabrielli told reporters in Rio de Janeiro.

Bolivia's army was deployed to 56 oil and gas fields on May 1 after Bolivian President Evo Morales gave international oil companies 180 days to revise contracts with the state energy company. Half the gas consumed in Brazil comes from Bolivia. Shares of Petrobras fell 10 centavos, or 0.2 percent, to 46.95 reais in Sao Paulo, after dropping as much 2.4 percent earlier.

Gabrielli said Petrobras, whose operations in Bolivia make it the country's largest company, has the ``right to defend itself'' and may use international courts of U.S. courts to do so. ``We have rights under Bolivian and international law under our existing contracts,'' he said.

<Snip>

I should disclose that I am a shareholder of Petrobras, but I am not concerned about this move by Bolivia. It is generally speaking not material to Petrobras' fiscal health.

[Judi Lynn]

9. Bolivia's big energy bet

Bolivia's big energy bet
May 4, 2006

COLD WAR habits of mind, which seem to survive among some of President Bush's advisers, are being tested by events in Latin America, where new strains of populism and nationalism are challenging the free-market doctrines of administration conservatives. In an era when the United States' standing in the world is in decline, the Bush team must not make relations with Latin America worse than they already are by falling back on old Cold War patterns of behavior.

Although the announcement Monday by Bolivia's president, Evo Morales, that he is nationalizing foreign companies' natural gas operations has practically no direct effect on American interests, Morales's action is certain to stir up resentment in an administration closely identified with Big Oil. But any temptation to weigh in from Washington with hostile opinions about a commercial quarrel between the elected president of the continent's poorest country and energy companies from Brazil and Spain should be avoided.

Indeed, if administration ideologues truly believe in the infallible workings of the market, they will allow market forces to determine the outcome of the bold gamble Morales is taking. For Morales made it plain he wants the principal foreign natural gas companies now operating in Bolivia not to leave the country but to accept his new stringent conditions for doing business there.

Morales is betting that, at a time of soaring profits for energy corporations, Brazil's Petrobras and Spain's Repsol will accede to his demands rather than writing off their investments in Bolivia's energy sector -- a total of $3.5 billion by all foreign companies -- and leaving the country. Were the foreign companies to cut their losses and abandon Bolivia, the country's state-owned energy company, YPFB, would lack the qualified personnel and the money to replace the foreign outfits. Morales is gambling that corporate executives in Brazil and Spain will make a market-based business decision not to pull out of Bolivia.
(snip/...)

http://www.boston.com/news/globe/editorial_opinion/editorials/articles/2006/05/04/bolivias_big_energy_bet/

[Judi Lynn]

10. Brazil officially recognizes Bolivia's right to nationalize

Brazil officially recognizes Bolivia's right to nationalize

09:07

Nelson Motta
Reporter - Agência Brasil

Brasília – Yesterday president Luiz Inacio Lula da Silva's press secretary released the following statement: "The decision by the government of Bolivia to nationalize its natural resources and control their industrialization, transportation and commercialization, is recognized by Brazil as a sovereign right. Brazil, pursuant to its own constitution, exercises total control over its natural resources."

The note added that there are no problems with the flow of natural gas from Bolivia to Brazil and that in a telephone conversation yesterday (May 3) president Morales of Bolivia ensured Lula that the flow would continue normally. The two presidents also agreed that any price adjustments will be resolved through negotiations
(snip/)

http://internacional.radiobras.gov.br/ingles/materia_i_2004.php?materia=263686&q=1&editoria=PO