Spain to negotiate with Bolivia on gas nationalization

Spain would send a delegation to Bolivia to discuss the impact of its gas nationalization plan on foreign companies, a local radio reported on Wednesday.

The decision was made following a telephone conversation between Bolivia's President Evo Morales and Spanish Foreign Minister Miguel Angel Moratinos, the leading Cadena SER radio said.

A delegation consisted of politicians and technocrats will go to Bolivia in a few days, which has the second-largest natural gas reserves in South America after Venezuela.

Spain's concern chiefly came from the involvement of Spain's Repsol YPF energy firm, which has a heavy investment in Bolivia.

Spain expressed the hope that foreign companies would stay on in Bolivia under workable and mutually beneficial conditions, the radio said.

Morales unveiled the plan to nationalize the country's natural gas sector on Monday, ordering all foreign companies to accept new operation contracts within 180 days or quit the country.

Under the plan, Bolivia's state-owned oil company, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), will control all natural gas fields in Bolivia and pay foreign companies for their services.

About 20 foreign firms are exploring Bolivia's gas reserves, including Spanish-Argentine Repsol-YPF, Brazil's government-run Petrobras, Britain's BG Group PLC and France's Total.

Repsol and Petrobras are the two biggest foreign investors in Bolivia's energy sector.

The European Union also expressed concerns about the plan, saying the move would affect world energy markets which were now subject to considerable pressure as far as prices were concerned.

On Monday, the army was deployed to guard natural gas fields to enforce compliance.

Morales, who took office in January as Bolivia's first Indian president, has repeatedly said his country's natural resources must be nationalized so that Bolivians could benefit from the profits that were sent overseas.

Source: Xinhua