Bolivia's Gas Gamble

Much has been written about Bolivian President Evo Morales' recent decision to nationalize Bolivia's natural gas industry. Some of it is hysterical and groundless. Some of it is reasoned and sensible.

One important fact to bear in mind: the two companies facing the greatest impact on their earnings and investment are Repsol of Spain and Brazil's state-owned Petrobras. Some in Brazil are criticizing Lula's rather calm response to this, but it would be good for everyone to take a deep breath now and start negotiating.

I don't feel sanguine, however. Petrobras has already canceled a pipeline project and expects to suspend further investment in Bolivia while working towards importing liquified natural gas. So the question then becomes if Bolivia has complete control over the hydrocarbons, what do they expect to do with them if their largest investor is leaving?

Eduardo has much more.

Comments

[Alves]

I am so upset with the brazilian government handling of the situation, in special with Lula, that I will not make any further comment aside from saying that (1) he lost my vote and (2) that he gets impeached now or in a second mandate after the beating that PT and other supporting parties (except PMDB, or at least that is what the press says) gets on the ballot boxes for congressial election.

[Alves]

Insert an "I hope" just after the number (2) in the above post. :)