Bolivia's decision to nationalize its oil and gas industry could scare off foreign companies seeking to invest in South America's poorest country, Spain warned May 2. "The legal insecurity does not encourage foreign investment," Industry Minister Jose Montilla said, adding that the move was contrary to the interests of Bolivia.
He said Spain must respect the nationalization decreed Monday by President Evo Morales but that it must also "show firmness in the defense of Spanish interests there and those of Spanish firms."
Spain's biggest energy group, Repsol YPF, also expressed concern about the nationalization of the oil and gas industry in Bolivia, in which Repsol has substantial investments. Repsol, the world's seventh-biggest energy group, accounted for 25.7% of Bolivian gas production through its subsidiary Andina.
Among other companies affected by the nationalization are BP and British Gas, ExxonMobil, France's Total SA and Petrobras of Brazil.
Morales said on May 1 that foreign energy companies would have to agree new contracts with the state-run oil firm, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), within 180 days. Troops seized 56 oil and gas fields after the nationalization decree, to be followed by seizures of mining, forestry and land assets.
Analysts said the nationalization had been clearly signaled by Morales when he came to power in January and they also pointed to a decision by Repsol to re-evaluate its reserves and planned production in Bolivia shortly afterwards.
Bolivia has the second-biggest gas reserves in South America after Venezuela, with an estimated 54 trillion cubic feet.
Copyright Agence France-Presse, 2006