MercoPress. South Atlantic News Agency

Mercosur “energy grid”, mere “newspaper talk”

Bolivia's new chairman of the government owned Oil Company described Argentina and Chile's initiative of a “regional natural gas grid” to supply Mercosur countries as mere “newspaper talk”.

On taking office as head of Bolivian Petroleum Resources, Ramiro Suarez Soruco said that the so called natural gas grid and regional energy integration was simply "newspaper talk?which has been organized, --by those countries--, to distract and confuse public opinion".

"I don't think the energy grid is significant. We're the important link of that grid", stressed Mr. Suarez Soruco.

The energy grid initiative was launched last June by Argentine president Nestor Kirchner given the political instability in Bolivia, which that month saw the ousting of president Carlos Mesa and his replacement by caretaker president Eduardo Rodríguez.

The explosive situation made the Kirchner administration fear Bolivia would not be able to keep up with its supply of natural gas to Argentina, and the increased volume promised, which would have caused havoc for Mr. Kirchner.

Actually Argentina which is rich in oil and gas deposits, faces growing shortages in the domestic and export markets, (particularly natural gas to Chile), because the Kirchner administration has forced companies to virtually freeze prices.

Corporations have therefore ceased to invest making the situation even more difficult.

The Argentine government then proposed neighbouring Chile last June to sponsor a natural gas grid, with Peru as the main supplier, and which would also include as consumers Brazil, Paraguay and Uruguay.

But Mr. Suarez said that such an energy project simply "is not serious" adding that "only Bolivia can ensure the viability and sustainability of such an enterprise".

One of the alternatives under the Argentine-Chilean proposal was a pipeline from Peru's massive natural gas reserves in the jungle area of Camisea to the north of Chile and from there on across to Argentina and the other Mercosur countries.

However the private consortium exploiting Camisea never was enthusiastic about the initiative pointing out that the main destinations for the natural gas reserves was Peru's domestic market and the west coast of North America, mainly California and Mexico.

Furthermore Bolivia already supplies Brazil and has a pipeline going all the way to Sao Paulo, South America's main industrial hub, and has began bilateral talks to provide natural gas to Paraguay, and eventually Uruguay.

"Without Bolivia, the energy grid is mere newspaper talk", highlighted Mr. Suarez Soruco. Bolivia has South America's second largest proven gas reserves behind Venezuela.