Bolivian President Will Not Compensate Foreign Oil Companies

Bolivian President Evo Morales said that foreign oil companies would be free to repatriate their earnings but will not be compensated for oil and gas resources that have been nationalized.

"If they have earnings they can recover them, there is no reason to indemnify them," said Morales.  Speaking to reporters on the sidelines of an EU-Latin America summit, he said in answer to a query as to why that country and its powerful state Petrobras oil company had not been notified in advance: "We do not have to consult or inform anyone before taking a decision that involves our sovereignty."

"I could also dwell on Petrobras's illegal activities in my country," Morales said, adding that he wanted to defend the rights of Bolivia's "indigenous peoples" and would also be nationalizing "the great land resources in our country," which includes mines.  But Morales said that "any company that respects our laws will have legal assurances."  He said the "problem is that companies have betrayed our country," which is the South American continent's poorest nation even though it holds the second largest natural gas reserves after Venezuela.  Morales charged that many foreign firms operating in Bolivia had "not paid taxes and engaged in smuggling."

Foreign companies have six months to renegotiate their contracts with Bolivia's state-run hydrocarbons company Yacimientos Petroliferos Fiscales Bolivianos.  The May 1 decree affects 26 foreign producers, including heavyweights as Petrobras, ExxonMobil, British Gas, Total and Repsol and requires them to turn over ownership and exploitation to the Bolivian state company.