Spain is questioning the Morales of nationalisation

Evo Morales announces nationalisation of Bolivia's natural resources.

Bolivian President Evo Morales on Monday announced the nationalisation of Bolivia's natural gas and oil industry, ordering foreign energy companies to send their production to a state company for sale.

"This is the solution to the social and economic problems of our country. Once we have recovered these natural resources, this will generate work. It is the end of the looting of our natural resources by multi-national oil companies," he said.

Morales warned that companies that rejected the decree would have to leave Bolivia within six months.

The main oil companies operating in Bolivia are Brazil's Petrobras, the Spanish-Argentine company Repsol YPF, British companies British Gas and British Petroleum and Total of France.

Spanish Gov't to meet companies affected by Bolivia's gas issue

The Spanish Government said that it plans to meet this week with representatives of the affected companies to study the impact on their investments in the South American country of Bolivia.

Meanwhile, Spanish-Argentine oil and energy company Repsol YPF SA said Tuesday the nationalization of Bolivia's oil and gas industry is "concerning.''

Bolivian President Evo Morales chose Labor Day, May 1, to announce the sector's nationalization, ordering companies to sign new operating contracts within 180 days or leave the country.

He said foreign companies must turn over most production control to Bolivia's cash-strapped state-owned oil company, Yacimientos Petroliferos Fiscales Bolivianos.

Foreign companies also were told that their production would be turned over to YPFB for sale and industrialization, affecting mostly Repsol and Brazil's state-run Petrobras.

"The news is concerning, but we are waiting for more details to understand the information,'' said a Repsol spokeswoman. Shares in Repsol were down 0.8 percent at euro23.50 (US$ 29.70) in afternoon trading in Madrid.

Bolivian energy nationalization alarms investors

Troops stood guard at dozens of oil refineries and gas fields in Bolivia on Tuesday as international concern grew over the sweeping nationalization ordered by President Evo Morales a day earlier.

Morales won office on promises to give the state greater control of the impoverished country's natural gas riches, but the scale of the nationalization he unveiled at a Brazilian-run gas field on Monday surprised analysts and alarmed investors.

"This was a very strong measure, excessively strong," said independent economic analyst and columnist Humberto Vacaflor.

Bolivia has South America's largest natural gas reserves after Venezuela, and disputes over how it should manage those riches have sparked several popular revolts that toppled two governments between 2003 and 2005.

As I was tapping this out (at 3:45 a.m.), Sue Herrera on CNBC announced they were going to discuss this issue next up. She said it was "Brazil" that did the nationalisation.

See http://guambatstew.blogspot.com/2006/04/of-rocks-and-stocks-and-streams-of.html