Oil companies Total of France and US-based Vintage have signed new contracts with the Bolivian government, becoming the first foreign companies to comply with the country's drive to nationalise the energy sector.
With Evo Morales, the Bolivian president, in attendance representatives from the two companies signed contracts which require them to turn over their oil and gas production to YPFB, the state energy company, for marketing to local and international buyers.
Carlos Villegas, the hydrocarbons minister, said on Friday: "With the signing of these accords, we confirm our commitment to the process of nationalisation and to the expectations of Bolivian society."
Other foreign oil and gas majors, including Brazil's powerful Petrobras and Spain's Repsol-YPF, have reportedly reached similar deals with the government, and have in theory until Saturday to sign new contracts.
Indigenous leader Morales, who assumed office in January, set a six-month deadline in May for an ambitious nationalisation of oil and gas resources to recoup energy revenues for the good of the impoverished country.
Warning
The deals appear structured to give the government a greater share of the earnings from the country's rich natural gas and oil fields.
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"I want to warn those who still continue negotiating that although we are a small and still developing country, companies must respect our laws and other norms"
Evo Morales, the Bolivian president |
Morales warned that he fully intended to make foreign companies respect its nationalisation laws regardless of whether they join the deal.
"I want to warn those who still continue negotiating that although we are a small and still developing country, companies must respect our laws and other norms," Morales said. "And if they don't, we will make them comply."
According to Luis Garcia Linera, the Bolivian vice president a good agreement with these partners could result in an extra $2 billion for Bolivia, which would roughly equal 23 per cent of its gross domestic product.
Bolivian gas reserves are estimated to exceed 1.5 billion cubic metres, which makes them the second-largest in the region after Venezuela's.