MercoPress. South Atlantic News Agency

Total and Vintage sign Bolivian contracts

France's Total and US-based Vintage signed new contracts with the Bolivian government late last night to continue operating in the country's energy sector, a Bolivian official said.

Manuel Morales, an official for Bolivia's state-owned energy company YPFB, told state-run television the companies had signed the new agreements.

Earlier yesterday, Finance Minister Luis Arce told local radio Erbol that some oil and gas companies could sign operation and exploitation contracts later yesterday. "We have advanced significantly (in the negotiations) with some companies," Arce said.

The government has been engaged in arduous talks with energy majors since Morales nationalized the energy sector in May, setting an October 28 deadline for foreign energy investors to sign new contracts to give the Bolivian state more control over production and a larger share of profit.

"If an agreement is not reached, it is not clear what would happen, although the government has talked tough about being willing to take over the fields and perhaps enlist other foreign companies to operate," Frank McGann, an analyst with investment management firm Merrill Lynch, wrote in a report.

The top foreign investors in Bolivia's natural gas fields are Brazil's state-owned energy company Petrobras, Spain's Repsol YPF, France's Total and British gas and oil producer BG Group Plc.

A key campaign pledge by Morales, the drive to assert greater control over Bolivia's plentiful energy resources has suffered a series of setbacks in recent months.

Andres Solis Rada, the former energy minister, and the ideological architect of the nationalization process, resigned in mid-September after a bitter dispute with Petrobras, the largest investor in Bolivia's energy industry.

He was replaced by Carlos Villegas, an economist whom analysts and local media consider more pragmatic and a more skilled negotiator.

The Bolivian government has said that the negotiations with Petrobras are by far the most difficult.

In Brazil, Brazilian Foreign Minister Celso Amorim told Globo TV that negotiations were continuing.

"The important thing is for the terms (of the deal) to be adequate, so that the operations are viable and there is no confiscation," he said.

Bolivia, the poorest country in South America, sits on the region's second-largest gas reserves after Venezuela.