Page last updated at 11:51 GMT, Thursday, 5 June 2008 12:51 UK

Bolivia to pay for seized shares

Transredes-run gas pipeline, Bolivia
Transredes transports natural gas to clients in Brazil and Argentina

The Bolivian government will pay two foreign firms $240m (123.3m) for their shares in gas pipeline firm Transredes.

Royal Dutch Shell and Ashmore Energy International were recently informed they would have to sell their shares in Transredes to the state.

The form of payment is to be agreed upon in future negotiations between the companies and the Bolivian government.

The nationlisation of Transredes is the latest attempt by President Morales to put key industries under state control.

Disagreements

Transredes transports Bolivia's natural gas to Brazil and Argentina.

The Bolivian government had been in talks with the companies but these reached an impasse after US company Ashmore Energy International failed to agree to a share buy-back.

Ashmore and Shell controlled about 50% of Transredes, with state energy company Yacimientos Petriliferos Fiscales Bolivianos (YPFB) owning 37%.

Partners are welcome, but we will not accept bosses
President Evo Morales

President Morales said Ashmore had agreed to sell some of its 25% share in Transredes but that the talks had not led to a deal.

"We waited patiently all month, but the actions they took were totally different," the president said.

"They wanted to be bosses, and have us be the employees. We're a small country - sometimes they call us underdeveloped - but we have lots of dignity. Partners are welcome, but we will not accept bosses."

Ashmore declined to comment on the negotiations.

Officials said Royal Dutch Shell had wanted to work with the government.

Chavez ally

President Morales came to power two years ago promising his country's poor a greater share of revenues from the profitable oil and gas industry.

His radical plans have thus far upset foreign companies and threatened to divide the country. Three regions in Bolivia's east, where most of the oil and gas is found, have recently voted for greater autonomy and oppose sending more revenues to the central government.

Parts of Bolivia's energy industry were privatised in the 1990s, with foreign companies taking 50% stakes in leading operators.

Last month Bolivia's state energy company bought a majority stake in Spanish-owned Andina, one of the country's biggest energy companies which develops oil and gas fields, and owns a 50% stake in two giant gas fields.

It has also taken control, by state decree, of Chaco from BP and Pan American Energy.

Mr Morales is an ally of Venezuelan President Hugo Chavez, who has also taken back control of a number of industries - including oil and electricity - previously in foreign ownership.




SEE ALSO
Bolivia nationalises energy firms
01 May 08 |  Business
Venezuela nationalises steel firm
09 Apr 08 |  Business
Chavez calls for steel takeover
01 May 08 |  Business
Country profile: Bolivia
22 Apr 08 |  Country profiles
Timeline: Bolivia
26 May 08 |  Country profiles

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