Bolivia, the linchpin of gas supplies to the southern half of Latin America, is struggling to secure long-term investment for its hydrocarbons sector amid questions over its reliability as a supplier and uncertainty over demand from export markets.
Evo Morales, the country’s popular leftist president who faces a presidential election in December, travelled to Russia this week to sign an agreement with Gazprom, the state gas monopoly, to develop Bolivia’s gas reserves until 2030.
The government estimates the Gazprom agreement, which includes a joint project with Total of France, will be worth $3bn (€2.3bn, £2bn). It says Venezuela and Yacimientos Petroliferos Fiscales Bolivianos (YPFB), Bolivia’s state-owned gas company, will together invest a further $240m.
The fact that Bolivia has to go so far abroad highlights the damage it did by nationalising its energy industry in 2006, driving away technically able international companies with a proven ability to raise funds.
Friday, February 20, 2009
Financial Times: Bolivia pays a high price for nationalisation
The financial Times has an article detailing how badly Bolivia's nationalization of the hydrocarbon industry has worked. This on top of the biggest scandal in the history of YPFB that just broke open shows the enormous price paid by the Morales governments ideologically-inspired policies.