MercoPress. South Atlantic News Agency

Bolivia's Morales reshuffles energy sector

President Evo Morales reshuffled Monday Bolivia's embattled energy sector by naming new heads at the government owned oil company YPFB and at the oil and gas regulatory office with the purpose of “consolidating the nationalization” process.

Jorge Alvarado, and one of President Morales' closest aides, was replaced as boss of YPFB by Juan Carlos Ortiz, until now was one of the company's vice presidents.

Santiago Berrios was named superintendent for oil and gas and Guillermo Aruquipa, who has been advising the government on what has been a bumpy process of nationalizing Bolivia's hydrocarbons resources, as deputy minister for Exploration and Production of hydrocarbons.

Berrios replaces Victor Hugo Sainz, who claimed that Alvarado violated Morales' May first decree nationalizing the petroleum industry by signing a contract with a Brazilian intermediary to exchange crude for diesel.

Sainz was fired together with the top legal adviser at the superintendent's office, Ramiro Ergueta, and the agency's chief economic analyst, Tatiana Genucio. They drafted a report claiming that the contract signed by Alvarado would cost Bolivia 37 million US dollars. That accusation, along with others about alleged corruption at YPFB, sparked demands that Morales fire all of his top energy officials.

But at Monday's swear-in ceremony, Morales insisted that while Alvarado may have made errors, he was innocent of wrongdoing, and insisted on his claims about a "conspiracy" aimed at sabotaging his nationalization initiative.

"Comrade Alvarado is incorruptible" Morales said in the presence of the just-dismissed YPFB boss, while adding that it will be up to the "appropriate authorities" to investigate the charges levelled against him.

Present at the oath ceremony with President Morales were also vice president Alvaro Garcia Linera and Energy Minister Andres Soliz Rada, the target last Wednesday of a Senate censure motion rammed through by opposition conservatives who hold a plurality in Bolivia's upper chamber.

The energy minister offered to step down from his post later that day, but the president - who praised Soliz's job performance and criticized the opposition senators for censuring him, refused to accept his resignation.

Last August first Bolivia's Energy ministry revoked two regulations issued a few days earlier giving YPFB complete control over domestic and foreign marketing of oil, gas and other refined products.

Soliz had to admit at the time YPFB did not have the resources to take over the marketing operations, which would demand 180 million US dollars. YPFB has also failed to obtain the 50% plus one stock of the several renationalized joint venture companies, including Bolivian branches of Spain's Repsol YPF and Brazil's Petrobras.

The negotiations with these and other foreign energy companies have gone nowhere even though nearly four months have elapsed since nationalization was announced.

On last May first Morales unexpectedly proclaimed the government's "absolute control" over Bolivia's huge reserves of natural gas and lesser of oil. Bolivia has the second proven largest natural gas reserves in South America behind Venezuela.

Under May first terms foreign energy companies operating in Bolivia had to deliver all their production to YPFB for distribution and processing. Foreign companies had six months to adapt their operating contracts to the new conditions or leave Bolivia.