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Last Updated: Saturday, 28 October 2006, 02:03 GMT 03:03 UK
Bolivia signs oil and gas deals
Worker at Bolivian state oil and gas firm YPFB
Bolivia wants to use its oil and gas profits to cut poverty levels
Bolivia has signed new contracts with two foreign oil firms as it seeks to exploit its rich natural resources.

The deals were signed with France's Total and US-based Vintage. Other firms have until the end of Saturday to sign agreements or leave the country.

The contracts come after President Evo Morales nationalised the oil and gas industry in May to give the state more control and a larger slice of profits.

Bolivia, though poor, is second only to Venezuela in terms of gas reserves.

Under the terms of President Morales' 1 May decree, foreign companies had six months to sign contracts giving up majority control of their Bolivian operations or leave the country.

Last-minute talks were continuing on Friday with Bolivia's largest natural gas producer, Brazil's Petrobras, as well as Spain's Repsol YPF, and the UK's BG Group.

Details of the contracts signed on Friday were not immediately available, but the president of Bolivia's state energy firm, Yacimientos Petroliferos Fiscales Bolivianos (YPBF), said they would bring Bolivia US$120m (63m) in annual gas revenues.

'Rocky' negotiations

Talks were dealt a blow in September when Andres Soliz Rada, a main player in the nationalisation process, resigned as energy minister.

Mr Soliz had clashed with state-owned Petrobras, the biggest investor in Bolivia's energy industry.

However, Mr Rada was replaced by Carlos Villegas, and talks have since proved to be more fruitful.

There also were other problems including a lack of money that hampered Bolivia's YPBF, in its plans to buy control of the assets like refineries and pipelines.

YPBF also missed a 1 July deadline to restructure itself so it would be better able to handle its more dominant position in the oil and gas industry.

Background to the oil and gas deal renegotiations

Bolivia 'backs Morales reforms'
03 Jul 06 |  Americas
Bolivian miners clash with troops
24 Jun 03 |  Americas
Country profile: Bolivia
03 Jul 06 |  Country profiles

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