After a hundred days of having taken over the presidency, the president Evo Morales nationalized the country’s hydrocarbons fields. Until May 1, Bolivia was only owner, in legal terms, of  gas and oil resources. The nationalization implies that the State will recover the control over production, transport, refinement, distribution, fixing of prices and marketing of both resources. The new measure implies that in facts, the two main production fields of the country will send 82% of their incomes to the State’s treasury. In the remaining fields, whose production does not exceed the 100 million square feet per day,  a royalty of 50% will be charged. The scheme will only  vary after 180 days, maximum term given by the government to the companies to redefine new contracts. As a consequence of the last law of gas, the State received annual transfers of US$ 460 million. It is estimated that thanks to the new decree, the State will receive US$ 780 million in 2007.

Brazil and Spain’s oil refineries, Petrobras and Repsol, controlling more than 70% of Bolivia’s energy fields, responded with caution but they have already expressed their objection. In Brazil, Morales’s decision was considered “unfriendly” and  president Lula Da Silva summoned an urgent meeting to assess the destination of Petrobras, since, it should also negotiate in fifteen days -like Argentina- the price of Bolivian gas. Brazil and Argentina are the main purchasers of the natural resource. On the other hand, the Spanish government of José Luis Rodríguez Zapatero expressed his “profound concern” as regards the announcement. Repsol controls, through its subsidiary Andina, 25.7% of the Bolivian gas. After the measure was known, the shares of the Spanish company fell in the order to 2.2%.

Although Evo Morales only mentioned that he would continue with the nationalizations of mining and forestry sectors, it is not rejected that he may advance over other areas of the economy.   In that frame, ENTEL, national telecommunications operator of mixed capitals (50% of Telecom Italia) is part of the companies considered strategic by Morales’ government, as well as three electric power companies, two railroads, an airline and the energy companies Andina, Chaco, Transredes, Total and Petrobras. The ministry of Planning of Development, Carlos Villegas, previously said that the government was interested in achieving the control of that group of companies through the purchase of shares, or through “other alternatives”, among which a change in the incomes distribution by decree, or even expropriation is not rejected.

Telecom Italia, that last year had announced its intention to keep only Argentina and Brazil’s assets in Latin America faces this situation. Although the Italian company assured that “it is not in a hurry to sell”  in the new context, it would not be preposterous to speed up the withdrawal. Although  the offers are not fully satisfactory, it would be a favorable decision, instead of facing conflicts due to an eventual expropriation.

Anyway, ENTEL’s manager of Institutional Communication, Juan León, assured to Convergencialatina that the company’s case is completely different from the energy companies, “since the company does not exploit natural resources, whose recovery, for the State, as regards the official announcements, is one of the main political government’s objectives. By announcing the nationalization of hydrocarbons, the president Morales said that the next steps will be mining and land.  Therefore, from that viewpoint, it is not predictable to have effects on ENTEL”, stated León.

However, considering the political trend taken by Evo Morales, the cooperatives, that in 2004 offered US$ 275 million for the Italian half of the incumbent, could be back in race. The telephony cooperative project is the one that best fits in the new Bolivian reality, and the general  manager of the Federación de Cooperativas Telefónicas de Bolivia (FECOTEL), Jorge Quinteros advanced to Convergencialatina that “the government sooner or later, will work with us, and we believe that in the Constitutional Meeting to be held in June, the State will bear in mind the proposal that we will submit. We want to replace the telecommunications neo-liberal system, without imposing a pure nationalism, and achieving, in exchange, a cooperative model”, said Quinteros.