Bolivia refund 100% of private oil investment

Jan 06, 2011, 2:03 a.m. | LA PAZ. The Bolivian government gave foreign private companies to give back to 100% of their investment if they find oil in the country to face an acute shortage of oil that forced the government to import fuel, an official source said yesterday.

"The investment in exploration will be provided for private enterprise if it is negative, all losses will be borne by the company, YPFB there has no obligation, if the result is positive YPFB promises to return one hundred percent investment in the exploration phase, "said the president of state oil company YPFB, Carlos Villegas.

The executive explained that the investment return would be made "through the formation of a SAM (Joint Stock Company)" with YPFB, according to a press note released by the office of the state-owned media.

In the traditional areas of oil and gas there are basically no oil, that other non-traditional areas have even less accessible.

Bolivia is in haste to increase its oil production in the last five years fell from 10,200 barrels per day to 4,900 in 2010, according to the state YPFB. Daily consumption of Bolivia is estimated at 35,000 barrels.

The lack of oil forces the country to import gasoline and diesel, mainly from Venezuela and sell in the local market so subsidized.

This subsidy, which in 2010 reached about $ 360 million, took more than a week to President Evo Morales to raise fuel prices up to 83%, which immediately triggered a popular backlash that forced him to repeal its own measure.

Unpopular

The violent rejection in Bolivia to increase fuel unexpectedly placed in jeopardy the leadership of President Evo Morales and laid bare the enormous constraints to be faced in the future when taking unpopular measures.

In a brief span of five days between Christmas and the night of December 31, the leftist president had passed and repealed an increase of 83% on fuel after being besieged by the powerful and complex social organizations that helped elevate it does almost five years.

Burned the image of presidential strength and the widespread belief that Morales was an overflowing dam that prevented social, started in 2011 in Bolivia under a threat of instability, analysts said.

"The government has put itself at a crossroads, any decision taken or not taken will have political costs for him," said Jorge Lazarte, a professor who was linked in recent years the opposition centrist.

Before backing up, Morales tried to calm the waters with a pay increase of 20% for key sectors of the economy and defended his action because it allowed to eliminate a costly state subsidies while stimulating investment and limited oil smuggling.

But after the resurgence of manifestations, agreed that leaders should negotiate with the office prior to revive what he called an inevitable increase in fuel prices.

"There is no clear idea of what to do from now on. Say it is the people who will point out (do) is to leave its status as government," said Lazarus.

Political analyst Carlos Cordero, the incident "revealed that this government is still weak" and that the Indian leader no longer looks like the political fighting that swept in elections over the past five years.

"Social movements have demonstrated ability to mobilize and influence they can have a cause to limit the government."

Without counterweight

But despite the virulence of the protests at the end of the year, which reverberated the most serious in 2003 and 2005 that toppled two governments of liberal bias, no one can get revenue from the political costs you're paying Morales.

Neither the opposition nor the blunt social movement leaders who can balance the process of social change that Morales promised further after his reelection last year with a record 64% of votes.

Mobilization

"It is not enough to take to the streets to criticize the Government to become a political leader. Today there are many figures who want to capitalize on the mobilization and discontent to themselves, but this success may be ephemeral," said Lamb.

Evo Morales, a supporter of Venezuelan President Hugo Chavez and Cuba's Fidel Castro, he could have put the fence when he said he fulfilled his promise to "govern by obeying the people" as a justification to override the reset and denied being a hostage to the unions and social movements.

In Bolivia, yet just moments of tension. There is a tense calm. AFP / Reuters