Bolivia's leftist government warned energy companies yesterday they must commit to hefty investments before August 20 or risk being thrown out of the natural-gas rich country.
The warning by Energy Minister Carlos Villegas came three days after President Evo Morales made a similar threat. "We hope that by August 20 we'll have results, agreements, otherwise we're going to enforce the legal provisions (in the contracts)," Villegas told a news conference, referring to the new operating contracts signed by energy companies to comply with Morales' nationalization of the industry. In an effort to reap more profits from impoverished Bolivia's energy resources, Morales nationalized the country's natural gas industry last year. Officials have said the contracts signed in October 2006 commit the foreign companies to invest some $3.5 billion to increase production. Villegas said Spain's Repsol , US Vintage, Chaco – which is controlled by Anglo-US firm Panamerican Energy – and Argentina's Pluspetrol have presented investment plans worth a total US$1 billion. However, the largest investors in Bolivian energy – Brazil's Petrobras, Repsol-YPF's local subsidiary Andina and France's Total – have yet to present their plans to the government. Villegas said the requirement to invest in projects to meet local demand before investing in potentially more profitable projects to increase exports was one of the main reasons that companies were reluctant to submit their investment plans. Meanwhile, he said the second US$56 million payment to buy two refineries from Petrobras had been made.