Tuesday, May 02, 2006

Reactions to Evo's Oil and Gas Nationalization Decree

Evo's nationalization decree has made front pages in many newspapers around the world. Reactions cover a wide range of emotions and so far, the key players have reacted as follows:

Bloomberg reports that Repsol and Petrobras may face losses. Oil analysts from the Deutsche Bank AG in New York are quoted as saying that this is a worse scenarion than expected. It is expected that only a portion of oil production goes back to the Bolivian government, not all of it. The managing director of Global Gestion says that Bolivia has impacted on hydrocarbons production and that the impact is mostly psychological. On the contrary, an analyst at Raymond James & Associates says that this will not have a significant effect on energy companies' earnings and says that Bolivia can improve its revenue without affecting much at the companies economics. However, Repsol's shares are down 2.19% (at 12:35GMT).

According to La Razon, Brazilian Mines and Energy Minister described the decree as "an unfriendly action that can be understood as a break from all agreements with Bolivia". Petrobras said that the decree changes current regulation and that in all previous negotiations there were no hints that 'nationalization' would be so hard.

In the same article, Spanish Foreign Ministery expressed Zapatero's concern and hopes of negotiation and dialogue taking place, so that the interests of all parties can be protected. The Partido Popular (PP) said that they expect the Spanish government to defend Sapnish interests and interprets Morales' decree as a failure for Zapatero's foreign policy.

According to El Pais, Repsol would be willing to negotiate new contracts with the Bolivan government. So far, they are waiting to hear details about nationalization and are confident to reach an agreement and stay in Bolivia.

In Bolivia, reactions ranged from happiness (in El Alto, where fireworks were heard) to denounces of fraud and uncertainty. So far, the reactions can be divided in 3:

Support for the government's decree: COR El Alto, Teachers' Union, Miners' Union, Chaco Civic Committee,

Undecided: Santa Cruz Civic Committee, principal opposition group Podemos and Private Entreprenuers.

Against the decree: Opposition groups UN, energy-rich region Tarija and the COB.

According to Los Tiempos, the reactions from social groups in Bolivia is somewhat different:

Undecided: COR ElAlto

Against: COB, ADN, M-17

Coming Soon:
According to Los Tiempos, Evo is planning to nationalize the Mining and Forestry sectors. He referred to the gas and oil nationalization as the "first step".

More photos:

From AFP:
The soldier 'recovering Bolivian property from looters'.

From Reuters:
Note the t-shirt from the supporter behind: "Che, Fidel, Chavez, Evo". Does anybody else feels nausea?

From AP:

The military in control of a Petrobras building.

A well-shot photo from La Prensa, showing the military in control of a Petrobras oil installation.


A list of oil/gas fields and their owners, from La Prensa:




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5 Comments:

Blogger CandiaMan® said...

The vice president just said, "...we asume the responsability for the new scenario, also we are going to fix it on the way, as things develope themselves..."

I have to admit that´s a funny one, the feeling a day after the Nationalization is shadowed by a lot of questions, gas stations don´t know who is the official provider, while government works and shows an even harder position, They want to fire all non-bolivian workers at repsol, petrobras, transredes, etc etc.

Also anounced (5 mins ago) an intention to rise up the fee for gas while incresing the production.

I´m not an economist (tried to be, LOL) but i can see lots of inconsitencies there.

7:07 PM  
Blogger Alvaro Ruiz-Navajas said...

It is interesting to note that the government may lack a plan after te initial shock. Indeed, this shows that nationalization may be nothing but propaganda for the Constituent Assembly. Thanks for your comments, Candiaman. It is really interesting, not to mention useful, to have the inside view.

11:16 PM  
Blogger CandiaMan® said...

You are Welcome! I´m glad to be helpful.

Well, here the day is over and this are some of the most commented topics:

Chavez anounced full support for the nationalization process, what does this mean? more venezuelan people working here? (there are already a lot of venezuelans and cubans here, no kidding)

Vice president said: "Sovereignity for us means to not ask or make any kind of consult, we haven´t consulted this (nationalization) with goverments" (even if our agresive politics may affect foreign affairs - I might ad)

Today we (bolivians) have been targets of tv and radio spots saying "Bolivia is changing, Evo has stayed true to his word" then follows a basic naive explanation of the nationalization process.

The COB isn´t happy with the nationalization they wanted a 100% confiscation.

Cainco reflects on the impact of the mediatic show against the real impact on foreing politics and business.

A Bolivian company called GTR has anounced intetions to make some serious investments according the new rules, who are they? nobody knows...

Uncertainty must be the correct label for today.

5:28 AM  
Blogger Alvaro Ruiz-Navajas said...

Thanks again, Candiaman. I really appreciate your input. I've posted a highlight of this last comment in my last post. You can catch it here

10:22 AM  
Anonymous Anonymous said...

Eerst Europa Doelstellingen: De Ci2i Verzekering (Ci2i) zal het nummer een gebrandmerkte pan Europese commoditized online verzekeringsmakelaar door 2010 zijn.

5:29 AM  

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