Tuesday, May 02, 2006
BOLIVIA TAKES CONTROL OF HYDROCARBON INDUSTRY: WHAT HAPPENS NEXT?
With the words, "Considering that, through historical struggles at the cost of much bloodshed, the people have won the right to control our hydrocarbon riches..." president Evo Morales decreed the nationalization of Bolivia's oil and gas reserves, yesterday, May Day. Morales was acting in compliance with the results of a national referundum of July, 2004, in which the population voted to return ownership of the country's reserves to the state.
Later with threats of sabtage looming Morales sent troops to guard the fields as well.
In a speech at the Government Headquarter in front of a crowd that had waited many hours for his arrival from the southern region, where he signed the nationalizing measure, Morales told those companies who don't want to invest anymore in Bolivia, "to get out."
He added that those firms will be welcome if they accept the people´s sovereign will and follow the Bolivian laws and Constitution, as well as the nationalization decree.
Under the terms of the nationalization decree, all foreign operators in the country have 180 days to comply with the new rules; the most important of which is that the Bolivian state-run firm, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), is to has complete control over commercialization and will "define domestic and export conditions, volume and prices." The measure boosts to 82 percent the Bolivian participation in the profits of production from the main gas producing wells.
This is not the first time Bolivia has nationalized its petroleum sector. In 1937 in confiscated the assets of Standard Oil. And in 1969 it confiscated the assets of Gulf Oil. In a speech celebrating the nationalization, Morales called his May Day decree the "third, definitive nationalization."
The article below which explores what the future holds and what can be expected from the United States is from VHeadlines.
Evo Morales' courageous move now makes him a target along with Hugo Chavez
VHeadline.com commentarist Stephen Lendman writes: To get a good sense of where US policy is heading, one need only read the front page of the New York Times or Wall Street Journal -- painful as that may be to do. I skip the NYT but do read the WSJ daily because of the audience it reaches -- high level people in business and government who want real information to guide them in their work.
So despite the WSJ being a voice for US business and imperialism, knowing how to read it, and doing it carefully, yields useful information and clues about what future US policy is likely to be.
Today's WSJ was a good example as they had a feature front-page story headlined "Bolivia Seizes Natural-Gas Fields In a Show of Energy Nationalism." That alone signals a call to arms that's backed up strongly in the copy that follows.
The WSJ begins its heated rhetoric claiming Evo Morales has been "emboldened by Hugo Chavez's moves against private oil companies" and yesterday (symbolically on May Day celebrating working people around the world including in the US in a big way for the first time) nationalized the country's largest natural gas field, San Alberto, and ordered the army to "take control of it and the country's other fields." It went on to explain that it ordered foreign oil companies to relinquish control of the fields, accept "much tougher operating terms or leave the country."
Bolivian law is clear that the state owns the resources in the country.
Up to now it's allowed foreign investors to operate the fields and take the majority share of production from them to sell for their gain.
Last year, however, Bolivia raised the state's take to an effective 50% of production by increasing taxes and royalties. Yesterday the government went further by declaring the state owns the gas once it's been extracted and that the companies operating in the two largest fields would only get 18% of the production for themselves.
A little translation is in order. What the WSJ didn't explain, and never would, is that those "tougher operating terms" are simply Bolivia's right as an independent nation (and all other nations as well) to get the majority benefits from its own natural resources and that foreign investors are there sharing in them only because the country allowed them to.
But instead of being grateful, the WSJ makes clear, without stating it, that the investors are greedy and want the lion's share and on their terms.
What's also left unsaid or unsatisfactorily explained is nationalization does not mean expropriation.
Evo Morales has made it clear that foreign investors will not lose the rights to their investments. What they will lose once Morales' plan is implemented (he's giving them six months to comply) is their unfair share of the profits and benefits they never had a right to have in the first place.
Under the Morales plan, a new contract will be made between the government and foreign investors guaranteeing that the people of Bolivia will receive the majority of benefits from its own resources while at the same time foreign investors will receive their fare share but no more than that. It also means the government alone now will decide the terms of revenue sharing and tax obligations due rather than Big Oil dictating them with the long shadow of the US looming in the background, which is still the case, of course.
The WSJ then becomes more inflammatory than it has in its past and recent railings against Hugo Chavez. It claimed high energy prices have sparked a resurgent wave of nationalism from Caracas to Moscow.
Of course, it forgot to mention the one country above all others where so-called nationalism and protectionism is a national religion -- the United States of America.
Here where I live, no outside investors are allowed in (especially from developing nations) to profit except on the ironclad rules we set, take it or leave it. So by US imperial rules (the only ones, no others allowed), what's good for us is not acceptable or allowed for anyone else because we said so.
The WSJ went on to say Morales is mimicking measures against Big Oil by "Mr. Chavez" (he happens to be the President and should be addressed that way), and that Morales and Chavez are "both playing a game of chicken with foreign oil companies."
It also couldn't resist raising the specter of Fidel Castro and the fact that Chavez and Morales signed a free trade accord over the past weekend with the man the imperial US hates most.
There's more to this story as well which the WSJ points out into their long article...
The leading Peruvian candidate, Ollanta Humala, in the upcoming presidential run-off election against US choice-by-default Alan Garcia, has also called for nationalization of the country's natural gas and mining resources.
...and Evo Morales has made it clear he intends to nationalize Bolivia's other natural resources likely beginning with its forests and mines.
Further, to cap off a growing US Latin American nightmare, last month Ecuador passed a law designed to cut the windfall profits of foreign crude producers (including US-based Occidental Petroleum) by giving the government (meaning the people) 50% of oil company profits whenever the international oil market exceeds the prices established in existing contracts.
There certainly is trouble for the US in Latin America and in the oil patch there as well as in Iraq, Iran, Nigeria and who knows where else it may spread.
So what can we make of all this ... and what is most likely to happen going forward.
The US is now spending hundreds of billions of dollars trying to hold on to the oil treasure it stole by invading Iraq. It's also made it clear it has designs on those same resources in neighboring Iran, and may attack that country using nuclear weapons. And if that isn't enough on one plate to digest, it faces a dilemma in Venezuela it's tried unsuccessfully three times to solve.
Venezuela has even greater hydrocarbon reserves than Iraq or Iran (possibly the largest in the world even above Saudi Arabia's) and is led by a courageous man unwilling to surrender his nation's sovereignty to its imperial northern neighbor demanding it. And now the heavenly virus of the desire to be truly independent is beginning to spread to Bolivia, Peru (if Humala wins the run-off election), hopefully Ecuador and significant opposition groups outside the governments in other countries as well like Nigeria and Nepal.
These nations, or opposition groups in them, are demanding equity and justice for their people, and are beginning to raise their heads and demand the rights they're entitled to.
If they all get them, that's bad news for the US and the dominant corporate interests here that profit handsomely by exploiting the resources of underdeveloped nations and its cheap labor as well.
Hugo Chavez and Evo Morales know this and have spoken out and acted courageously against these long-time abuses in defense the rights of their own people. But their doing so is intolerable to the US which will do everything in its power to reverse the loss of its special privilege.
So what can we expect ahead.
I have no doubt whatever (and I've written about this several times), when the heat is turned up against US interests, this country won't go quietly into the night.
The plans are well underway now for a fourth attempt to oust Hugo Chavez that may include assassinations and possibly an armed assault by US invading forces.
Last Sunday, VHeadline published a commentary/review I wrote about Noam Chomsky's new book 'Failed States.' In an email I received from Chomsky on April 29 he updated the views he stated in his new book and gave a blunt assessment of what may be in prospect which I'll quote again here: he said he "wouldn't be surprised to see (US-inspired) secessionist movements in the oil producing areas in Iran, Venezuela and Bolivia, all in areas that are accessible to US military force and alienated from the governments, with the US then moving in to 'defend' them and blasting the rest of the country if necessary."
I share that view, although I'm not privy to what hostile plans my government has in mind. I'll only state my strong belief that something big is planned to oust President Chavez (and now maybe Evo Morales as well) that will only become apparent once the fireworks begin.