BOLIVIA: Bolivia deepens its relationship with Venezuela and Argentina after the three countries sign agreements for partnerships and mutual investment

Argentina and Venezuela pledged new oil and natural gas investments on Friday (August 10) in their neighbour and leftist ally Bolivia, which is seeking new investors after nationalising its energy sector last year. Leaders from the three countries met in Tarija, Bolivia's natural gas capital, where President Nestor Kirchner said Argentina would give Bolivia soft loans for a 450 million USD processing plant to ship more natural gas to Argentina. Venezuelan President Hugo Chavez also accompanied Bolivian President Evo Morales to the Chapare region, where they announced a joint 70 million USD investment in a thermoelectric plant for the rural area, known for its vast coca fields. Chavez and Morales signed the energy deal; one of many that the Venezuelan leftist has signed this week as he toured the region promising new energy investments in Argentina, Uruguay, Ecuador and Bolivia. The move comes on the same day that both countries launched an ambitious energy alliance, announcing 600 million USD in oil exploration by a new binational company, YPFB-Petroandina. Throughout the trip, Chavez stepped up the political rhetoric as he used wealth from his country's oil exports to extend his regional influence. Addressing the Bolivian crowd, he recalled Cuban President Fidel Castro, calling him a father whose presence was among them. "From here," he said, "we send a greeting to Fidel: that father, another father of ours who, like Bolivar, is in the land, is in the water of this immense latitude. The revolution is no longer silent, but on fire." He also attacked the European colonialists who conquered South America. Venezuela's new joint venture with Morales -- 60 percent Bolivian and 40 percent Venezuelan -- will explore in the unexplored Amazon region north of La Paz and in blocks in Chaco, in southeastern Bolivia. Chavez also pledged financial backing for Bolivia to start developing a petrochemical industry. Argentina, meanwhile, will give Bolivia a 20-year, 1.5 percent loan to finance a gas separation plant billed as becoming the biggest in South America, with capacity to process 30 million cubic meters of gas a day, Kirchner said. "I've said it to the businessmen and I don't say it with a threatening tone. If these companies don't invest in gas and oil fields, I repeat that Argentina is open to coming to invest to generate the necessary production," he said. Kirchner previously pledged to invest another 1.5 billion USD in a pipeline to be ready within three years to increase Argentine natural gas imports from Bolivia to 20 million cubic meters a day, almost three times current levels. Critics say Kirchner's price controls on natural gas produced at home have dampened investment in Argentina's own energy industry and question his plans to bring increase shipments of more expensive fuel from Bolivia.

ITN Source | August 11, 2007

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