Bolivia’s President Feeling The Heat?

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Bolivian leftist president Evo Morales, (T)Hugo Chavez's self-avowed underling, appears to be in a bit of a bind over the nationalization of Bolivia's natural gas. Since he strong armed the international businesses that had been investing heavily in Bolivia, that money has dried up. His nationalization plan appears to be in difficulty as well and domestic unrest is growing.

At two minutes past midnight on Friday – 180 days since Bolivia’s government decreed the state was to take back control of its natural gas reserves – President Evo Morales hopes to announce the nationalisation has been completed.

It is far from clear that the deadline will be met. Things have not gone smoothly since May 1, when Mr Morales donned a hard hat and entered the San Alberto gas field in south-eastern Bolivia operated by Petrobras, the Brazilian state-owned energy company, to declare that he was honouring a campaign pledge to renationalise the sector.

The nationalisation – the reserves are the second biggest in Latin America – provoked the wrath of governments in Brazil and Spain, and led to a drying up of international investment. It briefly boosted Mr Morales’s popularity at home, but since then his approval ratings have fallen steadily.

With foreign relations still fragile and his domestic agenda gridlocked in political infighting, Mr Morales desperately needs to be able to announce some good news on Friday.

One difficulty those in the industry frequently complain about was that in spite of the fanfare that accompanied the announcement, the administration did not initiate negotiations with most foreign investors until September. This was some seven weeks before the six-month ultimatum the companies were given to renegotiate operating contracts or pack their bags.

“The talks began 4½ months after they should have done,” says Ronald Fessy, a lawyer for the Bolivian Hydrocarbons Chamber, which represents foreign investors such as Repsol of Spain, France’s Total, British Gas and Royal Dutch Shell.

It is a widely held belief that the process has been mismanaged. That became clear in August, when the government said it was “temporarily suspending” the nationalisation due to lack of funds and expertise.

The Financial Times article is a couple of days old now and Yahoo has a story up say Bolivia announced they had reached a deal. But there are no details and nothing to go on other than the government's statement. Another socialist worker's paradise slowly swirling down the bowl of history. (This is also why Bolivia will not be accepted as a substitute for Venezeula for the UNSC seat. Brazil got stiffed badly by Morales and they will not be at all happy to give them that seat.)

(H/T) The Influence Peddler

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