Bolivian gas center of a Latin American dispute

Mexico, Brazil and Argentina, among other countries, want to purchase gas and oil products from South American poorest nation. Bolivians had voted to restore public control on hydrocarbon reserves last weekend in a controversial referendum.

Bolivia may be South America's poorest nation with 70% of its 8 million population living in poverty, but nowadays, all Latin American countries –and the United States as well- are greedily looking at this small Andean country, which holds oil and gas vast reserves. Bolivian officials said Thursday they are ready to sign agreements with Uruguay and Mexico for the sale of Bolivian gas and oil products, by the time President Carlos Mesa signed energy cooperation protocols with his Argentine counterpart Nestor Kirchner, and shortly after doing the same with Brazil's leader Luiz Inacio Lula Da Silva.

The announcements come less than a week after a referendum gave the government of President Carlos Mesa the green light to market hydrocarbon products outside of long-term agreements with foreign companies. However, trade unions and powerful peasant organization demand the extension of natural gas supplying within Bolivian territory and the industrialization of the fluid prior to export. Therefore, it is not clear yet how these movements will react to the export announcements made by local authorities, as referendum’s results gave Mesa a strong support from most of the Bolivian population, but in no way meant the end of the endemic social unrest that has strained the country for years.

Mexico says it needs to buy gas beginning in the year 2008 in order to meet the demand of its Pacific coast, and has begin negotiations with Bolivia and Peru as possible suppliers. Uruguay, in turn, is concerned on the gas shortage in Argentina, its natural supplier, and also look for Bolivia as substitute.

Argentina has suffered from gas shortage all along 2004, which led to an energy crisis from which the country has not yet fully recovered. Crisis in Argentina led to a halt in the supplying to Chile, as Santiago cannot count with Bolivia’s direct supply due to the border dispute both nation hold since the 1879 “Pacific War”.

Peru, in turn, appears as main Bolivia's competitor in the gas industry. Its plan includes the exploitation of the huge reserves of the Camisea basin, in the Peruvian Amazonia, Camisea Project draw the attention of environmental groups, which have accused the Peruvian government and the multinational corporations behind, of seriously threating the ecological equilibrium in the area. Most of Camisea's gas is expected to cover the demand of the US Pacific Coast.

It is not clear whether Bolivian gas will be enough to cover regional energy demands. However, it is enough to explain why all countries in Latin America and the United States are concerned on the stabilization of their region's poorest brother.

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Author`s name Andrey Mikhailov