Bolivia is taking new steps toward wresting control of its natural-gas industry from foreign companies, naming Bolivian directors to oversee the companies' transition to majority ownership by the government.
Under last week's nationalization, Bolivia's state energy company Yacimientos Petroliferos Fiscales Bolivianos, or YPFB, will take majority control of all energy operations in the country and set gas prices. Foreign companies have six months to negotiate their contracts or leave the country.
On Monday, the government named directors, mostly lawyers and military men, who will represent YPFB on the boards of the Bolivian subsidiaries of the foreign companies. Each company will have four directors representing YPFB and three directors for the foreign investors.
The Bolivians will not take the helm at the subsidiaries until YPFB takes majority control of the companies' shares, which is currently under negotiation, said Andres Soliz, Bolivia's hydrocarbons minister.
The new Bolivian directors were named for Bolivia Refinacion SA, a subsidiary of Brazil's Petroleo Brasileiro SA, or Petrobras; Andina SA, part of Spanish-Argentine Repsol YPF; Chaco SA, a unit of Britain's BG Group PLC and BP PLC; Transredes SA, of British-Dutch owned Shell Corp., and Compania Logistica de Hidrocarburos de Bolivia, which has various foreign shareholders.
Executives from Petrobras will meet with the Bolivian government Wednesday to begin contract negotiations. Bolivia is seeking to raise the price of gas it sells to Brazil, which gets half of its natural gas supply from the neighbor.
Brazil, however, doesn't expect to reach a quick agreement over the price of Bolivian gas or compensation for the Brazilian assets it must hand over to Bolivia as part of the nationalization, Brazilian Foreign Minister Celso Amorim said Tuesday.
Negotiations between YPFB and Petrobras, will be "long and difficult," Amorim told the Senate Foreign Relations Committee in Brasilia, reports the AP.