Bolivian opposition warns isolation because of nationalization

Bolivian opposition leaders warned Evo Morales' tough stance on foreign energy companies facing nationalization could drive investors away and Brazil's state oil firm expressed outrage at the president's accusation that it was operating illegally.

Photo: Bolivian opposition warns isolation because of nationalization

Bolivian opposition warns isolation because of nationalization

The criticism of the Bolivian leftist leader came after Morales, in Vienna for a summit of European and Latin American leaders, defended his May 1 nationalization of the Andean nation's natural gas sector and said the foreign companies involved might not be compensated.

Morales also accused the subsidiary of Brazil's state-run oil firm Petroleo Brasileiro SA, or Petrobras, of operating illegally in Bolivia. The charge angered the company that has invested more than US$1.5 billion ( Ђ 1.18 billion) in Bolivia and owns two refineries that process virtually all of the nation's gas.

In a statementlate Thursday, Petrobras said it was "indignant" at Morales' claims and added it has "always acted within the law, in Bolivia as in all of the countries where it operates."

Morales announced 10 days ago that Bolivia's government would set natural gas prices and transfer majority control of all energy operations to its state energy company, Yacimientos Petroliferos Fiscales Bolivianos. The president gave foreign energy firms six months to negotiate new contracts, or leave the country.

He raised eyebrows again Thursday when he said foreign companies might not be compensated for giving up control of operations and assets, a seeming hardening of his position just hours after Bolivian and Brazilian officials met in La Paz and agreed to form a commission to study how energy companies would be compensated.

"If they have recovered their investment, then there is no reason to compensate them whatsoever," Morales told a news conference.

In Bolivia's capital, opposition leaders on Thursday warned Morales' hard-line stance could isolate the impoverished nation internationally and criticized the president for being too influenced by Venezuela's Hugo Chavez, reports the AP.

I.L.