Evo Morales, Bolivia's president, held an urgent cabinet meeting to address the incident.

 

Gas-rich region

 

Jorge Arias, the protest leader, told reporters that demonstrators captured 60 police officers, took their weapons from them, and were holding them in a municipal building.

 

Government officials said exports of natural gas to Argentina and Brazil, from which the government expects to raise $2bn this year following nationalisation of the energy industry, are guaranteed.

 

They acknowledged that the protesters, who come from the Gran Chaco district of Tarija department, outnumber police and army personnel.

 

Tarija, on the border with Argentina, is home to 85 per cent of the country's natural gas reserves.

 

Gran Chaco and the neighbouring O'Connor district both claim the vast Margarita natural gas field, operated by Spain's Repsol YPF.

 

Revenue share

 

The Bolivian authorities are working to determine which district has the right to the field and to 45 per cent of $100m in annual taxes that could come from future exports of Margarita's reserves to Argentina.

 

On Tuesday, protesters overcame dozens of security personnel and took control of two plants run by Transredes, a subsidiary of Royal Dutch Shell.

 

A Transredes spokeswoman said one of the plants had to stop pumping gas to a neighbouring city, but the second facility that supplies natural gas to neighboring Argentina did not cease operations.

 

The protests continued on Wednesday with hundreds of demonstrators gathered outside the plants, the spokeswoman said.

 

The leaders of both the O'Connor and Gran Chaco districts said they would step up their protests in speeches broadcast by local media.

 

Repsol YPF, Brazil's Petrobras and France's Total operate different natural gas fields in Tarija.

 

Morales nationalised the energy industry a year ago, forcing foreign operators to pay higher taxes.