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Bolivian Oil

May 1, 2006



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Bolivian President Evo Morales nationalized the South American country's oil and gas industry on May 1, giving foreign companies 180 days to sign new deals ceding majority control of their Bolivian operations or get out of the country.

Bolivia's gas industry was privatized by former President Gonzalo Sanchez de Lozada in 1996. Demands to re-nationalize Bolivia's natural gas reserves were at the heart of rebellions in 2003 that chased the puppet president into U.S. exile and spearheaded the indigenous political movement that eventually propelled Morales into the country's leadership.

Among the companies who signed the new deals were two affiliates of Brazilian state energy giant Petrobras, Spanish-Argentine company Repsol YPF and Repsol's Bolivian subsidiary, Andina. The French company Total SA and the U.S.-based Vintage Petroleum also signed new deals.

The new contracts with energy firms will bring Bolivia revenues of at least $1.3 billion a year.

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Bolivia has South America's second largest natural gas/oil reserves. This nationalization move is in step with Venezuelan President Hugo Chavez Frias' nationalization of the oil industry there. It represents the growing struggle by colonized peoples around the world to reclaim the resources that have been stolen by U.S. and European imperialism to build the white nation at the expense of the rest of the world's peoples.

Morales said the petroleum nationalization would be only the first step in his campaign to recover control of Bolivia's natural resources. Earlier this month, he announced plans to bring Bolivia's mines under State control.

Morales said, "Bolivia will not be as it was before, a beggar State with many social problems. We will continue in this path of recovering our natural resources, not only the hydrocarbons but also the minerals and the non-metallics, and all nonrenewable natural resources that belong to the Bolivian people."


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