NETHERLANDS: Bolivian President Evo Morales says his government wants to buy oil major Royal Dutch Shell's stake in Transredes, to gain majority control of the Bolivian gas transport company

Bolivia's government wants to buy oil major Royal Dutch Shell's stake in Transredes, to gain majority control of the Bolivian gas transport company, President Evo Morales said on Monday (November 27). Morales, who is on a three-day visit to the Netherlands, told a news conference the move was part of his nationalisation drive and his government was seeking a good dialogue with Shell. "This is part of our dialogue and in reality the different production lines, the state should have the corresponding control. In some cases you need to buy shares without jeopardising the company and in some cases like for example if we talk about the new pipelines, the state will invest a 50-60 percent for the resources for the pipelines, the company or through the company, will contribute what's outstanding through credit or through companies owned by the state like Petrilatina in Argentina or PDVSA of Venezuela or Petrobras in Brazil. We are business partners and this evidently is part of the negotiations on how the state can have a higher percentage of shares. With the subject of the refineries, the refineries are not a natural resource, there has been investment and we can never think of the nationalisation of the refineries, you have to buy shares you have to retain some control just like the pipelines, this is the most responsible thing. I remember for example the negotiations with Repsol in Spain, Total in France and in every instance negotiations have been difficult but we got a technical, juridical agreement and we reenforced it with a political side. I have talked about it with the Chancellor and these technical, juridical negotiations will move forward with Transredes and once we have the information we will reinforce it looking for equilibrium for the state and the company, that's what we are looking for." The Anglo-Dutch company owns 25 percent of Transredes and has administrative control over the Bolivian firm together with other foreign companies. Morales, a leftist who is the first indigenous leader of South America's poorest country, said he would also discuss Shell's proposal to invest in exploration in Bolivia. He gave no other details. Morales met Shell executives in The Hague later in the day but the Shell press office declined to comment. Morales swept to power in a December 2005 election on pledges to nationalise the country's energy industry and use the extra revenue to alleviate poverty. He nationalised the oil and gas industry in May and gave foreign companies six months to hand over a majority stake in their Bolivian operations or quit the country. Last month, energy companies, including Brazil's Petrobras, agreed in last-minute talks to remain in the country and operate under state control. Earlier this year, Bolivian pension funds run by Spain's BBVA and Zurich Financial Services of Switzerland transferred their shares in Transredes and two other energy companies to state-owned energy company YPFD. As a result YPFD now controls 34 percent in Transredes. The pipeline operator was partially privatised along with other companies in the last decade. Foreign firms bought 50 percent of the companies' stock in exchange for administrative control, with most of the remaining 50 percent being entrusted to private pension funds on behalf of Bolivian pensioners. Morales, whose visit to Netherlands is part of a European tour, said the aim of the trip was to "seek foreign support and cooperation for the democratic process" he had undertaken. Morales' resource nationalisation drive is part of a regional trend that has seen similar steps in Ecuador and Venezuela. Analysts said it could be the basis for similar deals in other countries.

ITN Source | November 28, 2006

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