British Gas puts pressure on Bolivia

My speculation that multinational energy companies were putting strong pressure on the Bolivian Government, to stop increase in royalties on gas production, was confirmed today.

The Minister of Energy, Guillermo Torres, was reported in the Cochabamba daily Opinion as saying that his ministry had received several letters from oil/gas companies expressing their concern with the new `hydrocarbons´ law. Torres said it was likely that Bolivia would face an international tribunal for breach of contracts which could have devastating consequences for Bolivia.

Torres specifically cited British Gas, the fourth largest multinational energy company in Bolivia: "The companies have sent us letters, for example I received two letters from British Gas."

This pressure has been received despite the Congress rejecting the opposition´s demand for a simple 50% royalty on all gas producation. The Congress is supposed to have passed a law which imposed a mixture of royalties and taxes that came midway between the government´s proposal and that of the opposition.

I have yet to see a proper analysis of the new hydrocarbons law, but some of the papers today are saying that the law is very similar in effect to the demand for 50% royalties.

Torres has said the law will be a "disaster" for Bolivia. The opposition party, MAS is arguing that the contracts signed by the previous President Sanchez de Lozada were completely illegitimate as they were not subject to public scrutiny.

If this legal action goes ahead, or even if it is just a threat to prevent a just law, Bolivia needs international solidarity. As British citizens we must speak out to say that the gas reserves belong to Bolivia, and the social needs here depend on the country gaining maximum benefits from its resources. We can not let British Gas threaten Bolivia´s future.

More to follow….


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