Energy Nationalization Is Dangerous Route For Latin America

Nationalization of energy resources is a dangerous road for Latin America to go down, the International Energy Agency warned in Madrid on May 4, saying that nationalization of gas reserves by Bolivia had alarmed investors.

The deputy director of the IEA, William Ramsay, told the Spanish economic newspaper Expansion that Bolivian President Evo Morales "knows that he needs the financial and technical abilities of the (oil) companies, and they need Bolivian gas".

On May 1, Morales announced the nationalization of Bolivian hydrocarbon assets. The measure affects about 26 foreign oil and gas companies.

Ramsay urged Bolivia not to take the road towards nationalization followed by Venezuela. He said: "If there is not a balance between the interests of the companies and those of the country, the loser in the end is the country. "One has only to look at Venezuela's production capacity, which has slumped dramatically. That is the price that is paid."

Bolivia was making a mistake if it was trying to reduce the role of oil companies to one of being merely providers of services, he said.

He said that "Brazil and Argentina should be worried" because in the short term, the biggest danger concerned supplies to the Latin American region. However, Ramsay also said: "I don't believe that Bolivia has any interest in endangering its relations with its (regional) partners."

Copyright Agence France-Presse, 2006

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