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Bolivia Will Stop Selling Cheap Gas to Brazil and Argentina

The Bolivian government ratified Tuesday, February 21, its decision to increase the price of natural gas exported to Brazil and Argentina because it considers them "unfair".

Hydrocarbons minister Andres Soliz and the president of Bolivia’s oil company (YPFB) Jorge Alvarado made the official announcement in La Paz.

Currently Brazil pays Bolivia US$ 3.23 for each million BTU and Argentina US$ 3.18. According to a common rule of thumb,  natural gas prices follow the 10-to-1 rule in relation to crude oil, meaning that the price of the gas would be 10% of the crude oil price.

With a oil barrel priced at over US$ 60 these days, Brazilians and Argentineans would be heavily underpaying with a hefty close to 50% discount off the market price.

"Bolivia has all the right to demand negotiations for better prices with the countries we’re supplying with our natural gas", said Mr. Alvarado.

"We consider current prices to be unfair and must necessarily be reviewed", added Mr. Soliz.

Both officials added that following talks with Venezuela’s Minister of Energy and Petroleum, Rafael Ramirez, it was quite clear that "Venezuela will not supply subsidized gas to Brazil and Argentina," as was advanced by the Brazilian press.

In an official release from Caracas, Venezuela’s Hydrocarbons Minister denied his country had offered subsidized natural gas to Brazil adding it was a "misinformation" and that when the giant pipeline extending throughout South America is finished, "Venezuelan gas will cost US$ 5 per million BTU".

"This is only part of a stage of pressures to try and "soften" Bolivia when President Morales is about to begin gas price negotiations with its neighbours", said YPFB president Jorge Alvarado.

As to the future prices for natural gas, "it would be a gross mistake to advance through the press the prices from which we are willing to begin negotiations with neighboring countries".

However Mr. Soliz was cautious as to the coming price negotiations for natural gas since Brazil has offered to jointly build a huge petrochemical complex in the Bolivian/Brazilian border, which "we have to be careful is not tied to frozen gas prices".

"We’re always tempted with great offerings for the future, but…currently it seems they might be trying to extract disadvantageous prices for Bolivia. So that’s why we have to be careful at present and in the future", highlighted Mr. Soliz.

As to the energy sector in Bolivia, Mr. Soliz said that the President Evo Morales administration will not sign any documents or fix prices, "until the rules of the game have been reviewed" in the hydrocarbons sector.

The President has promised to respect foreign corporations’ assets, but insists in a greater government control over the country’s natural gas reserves.

Bolivia’s reserves are the second most important in Latinamerica behind Venezuela’s.

Mercopress – www.mercopress.com


  • Show Comments (6)

  • anonymous

    “luv” “da” web help me with my school work “thanx”

  • Guest

    just for….ANDREW !!!!!
    here is an extract from a recent brazilian magazine on Brazilian slavery :

    Although slavery was officially abolished in Brazil in 1889, Fr Rezende said the official estimate of just 25,000 slaves in Brazil could be way off the mark: “The real figure could be 250,000.”


    LANDOWNERS ????????????????????????????

    3 weeks ago you even had a high ranking senator involved in slavery in his farms !!!!!!! Read your own news ….please ! And this senator even refused to resign his post !!!!!!!!!!
    He remains Senator….TODAY !!!!!!

    Is this a fight against slavery…as your government proclaims ?????

    I told you earlier, no one has ever yet gone to jail in Brazil for having working slaves.

    NO ONE !

    Slavery is still TODAY a common practice and daily life in your country , reprimanded only lightly by law, but brazilian laws are not applied anyway….as you know !

  • Guest

    to Andrew :
    You probably forget, on purpose, that Brazil imported 4 millions slaves !

    You probably forget, on purpose, that you were the last country that made slavery illegal !

    You probably forget, on purpose that the vast majority of your black citizens are still living in poverty, effectively putting them in a similar situtation than slavery !

    You probably forget, on purpose that every single of your actual and past governments, with white leaders, did not and still do not provide basic education, healthcare, housing, jobs for your black citizens.

    You probably forget, on purpose, that you still have hunger and under nourrished citizens by the millions and millions, while proclaiming yourself the garden of the world.
    How can you have so much agriculture exports and at the same time so many citizens with not enough food ?????
    Quite a contradiction and non sense !

    You probably forget, on purpose, that you still have slavery TODAY.

    You probably forget, on purpose, that slavery has been made illegal only in the Constitution, not in actual practice.

    You probably forget, on purpose, that if your government is able to estimate the number of citizens still in slavery, they should then by defintion know where they are. But they free only a few thousands every year !

    You probably forget, on purpose, that the official number of slaves is far far lower than
    the actual number of slaves. Hiding the truth
    has always been a Brazilian specialty, such as vote buying and corruption to the roots.
    You probably forget, on purpose, that even TODAY there is no jail term (not even 2 days) in your laws for those who put people in slavery !

    You probably forget, on purpose, that Brazil has the highest wealth inequality on earth…after Sierra Leone !

    You probably forget, on purpose, that it was Portugal who colonized your country. And Portugal does not represent all developed nations. Portugal is only a small country within all the developed nations. NOT MORE !

    Finally you forget on purpose to recognize that your slaves dont work for develop nations benefits but for your minority elite, that explains why you are the champions of wealth inequality.

    Please think twice and review your copy

  • Guest

    The economies of the developed world were doubly advantaged by South American gold and slave labour. Why do liberals feel it is necessary to consistently invoke the laziness of those who recieve funds, rather than asking difficult questions about the relationship between attitudes and historical context. Such thoughts, and I will say it, are UNSCIENTIFIC–that is, steeped in the objectivity and “clearmindedness” of neo-liberal objectivity they fail to take into account the sociological research that has taken place with respect to human consciousness after Saussure. WIthout a cognizance of the relationship between language and subjectivity such blathering neo-liberal opnions belong to the very medievalism such opinions despise…..

  • Guest

    And in the meantime…..
    …Asian and Midlle East developing countries economic growths are far superior and of better quality. Almost all had a far lower GDP per capita just ten years ago than Argentina, Brazil and Venezuela and many are now closer or EVEN above,

    Without heavy long term investments in education and infrastructure, no country in thios world ever became and will never become a developed nation.
    And dont always ask for cheap and easy International financing.None of the developed countries got the help you receive. Easy money never produced good results but only corruption, wealth inequality, and lazyness !!!!!
    You must learn to invest for your own future generations. Not always with short term results….because you have an election year…..and then nothing until the next election !
    It is only with hard work, long term commitments and accountability that you will get good and sustainable results.
    That is not the case now when Lula has 3 years of budget austerity and suddenly frees tons of money because this year is not an election year but a RE-election year.
    If he wins no one should have a doubt of what will happen the following 3 years until the new election and so forth !

  • Guest

    That is how anti neoliberalists…..
    …deals with friendly anti neoliberalists.

    They never agree. By rejecting the neoliberalism ideology they expect a higher price for their goods but end with a lower price than free international market prices.

    Is that not called a SAD BUT REAL AUTOGOAL ??????

    Bolivia will learn the hard way that dealing with Brazil and Argentina is very tricky because these countries always wants to buy things cheaper, get International assistance from everywhere such as from the World Bank, UN, UNESCO, IMF, IDB etc etc and then complain that the world is unfair to them, that the world market prices are always too low, despite they want to buy goods always at well below market prices.

    Quite a contradiction !

    Anti neoliberlists ideology is dirty, stinky and unfair because they want things only in their favor.
    That is not how the world is today !

    Even Morales, the clown proclaiming himself anti neoliberalist, the “nightmare” of the USA, totally against FTAA, is now requesting negotiation with the FTAA because he has goods to sell.

    That is a 180 degree turn since his election
    less than 2 months ago.

    Just think of it : afterall the strongest anti neoliberalists are the best and most fervent neoliberlists. The difference is only between what they say and what they effectively do ! JUST the opposite.

    And all the governments proclaiming themselves anti neoliberalists are the same.
    This include Lula, Kirchner, Chavez and Morales.
    They are simply true JUNKIES, and no one should ever deal with them. Curiously all these countries have a very high percentage of poverty and corruption. they are all governed like medieval countries with no common sense !!!!

    Facts are facts !

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