Morales wavers on energy requital

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From combined dispatches

VIENNA, Austria -- Bolivian President Evo Morales yesterday warned that foreign companies may not be compensated after the nationalization of their operations in his country.

"There are companies in Bolivia that don't respect Bolivian laws. They have betrayed our country," Mr. Morales told a press conference at a European Union-Latin American summit here.

Mr. Morales' comments threw into doubt an agreement announced hours earlier by Brazilian and Bolivian officials meeting in the Bolivian capital of La Paz. The officials late Wednesday said the two governments were creating a commission to study how energy companies would be compensated in the wake of the nationalization.

The South American neighbors were seeking to defuse tensions from Mr. Morales' decision last week to set gas prices and transfer majority control of all energy operations to its state energy company, Yacimientos Petroliferos Fiscales Bolivianos, or YPFB.

But in the Austrian capital, Mr. Morales seemed to harden his country's bargaining position, saying some foreign companies might not receive compensation because Bolivians have yet to benefit from technologies used in the oil and gas sectors.

"For more than 500 years our natural resources have been pillaged and our primary goods exported. This has to be ended now," said Mr. Morales, who won December elections promising to use the country's natural resources to help the poor majority.

Mr. Morales and Venezuelan President Hugo Chavez, a fellow left-winger, make up the awkward squad at the European Union-Latin American summit on trade, investment and other issues.

Other Latin American leaders showed irritation at what Mexican President Vicente Fox called a "sterile discussion, or ideological discussion" -- a clear reference to the anti-imperialist line of Mr. Morales and Mr. Chavez.

"Mexico's position is totally clear: We will strive for greater integration at all levels -- for opening of markets, fair trade, stronger consumer potential that at the same time creates new jobs," said Mr. Fox, a former executive of Coca-Cola Co.

Peruvian President Alejandro Toledo also weighed in, saying attempts to boost relations between Andean countries and the European Union could not be taken hostage by Venezuela.

Foreign energy companies have invested more than $3.5 billion in Bolivia since 1996, including more than $1.5 billion from Petrobras, a government-owned Brazilian oil company.

Bolivia is home to South America's second-largest natural gas reserves after Venezuela.

Before arriving in Vienna yesterday, Mr. Chavez met with Pope Benedict XVI at the Vatican. The pontiff listed a series of deep concerns about threats to religious freedom in largely Catholic Venezuela.

Mr. Chavez, on a two-day visit to Rome, held talks with the pope for about 35 minutes in his private study. He later described the meeting as a chance to put their past problems behind them.

But a Vatican spokesman said that during the audience the pope gave the left-wing president a letter that contained "points of concern on the part of the church" about the situation in Venezuela.