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“It’s important to keep the Indians happy. It’s the best protection you’ve got,” says Mr. Petty.

Mr. Morales, Bolivia’s first Indian president, was elected in 2005 by focusing his campaign on the ethnic divide between impoverished Indians and better-off Bolivians of European descent.

Vigilante takeovers of mining installations during Mr. Morales’ term have forced most of Mr. Petty’s competitors, including Apex Silver Mines Ltd., to pull out of the country. Apex was formerly owned by international financier George Soros.

“There are companies that are small and entrepreneurial and feel that they have a strong enough relationship with the government to remain,” said Mr. Price of Kroll. “Nationalizations have often targeted companies that try to amortize their existing investments instead of increasing them.”

Franklin Oil, Gas and Mining was recently contacted by Ecuador’s government, which is looking for partners to operate oil fields expropriated from U.S. giant Occidental Petroleum Corp.

“We try to supply the latest technology in terms agreeable to local demands,” said Mr. Petty.

Meanwhile, investments from nations such as Iran and Russia, which are on less than friendly terms with the United States, have gained ground in Latin America. Mr. Morales recently signed up to $1 billion in energy, food and mining ventures with Iran, which stipulate the joint administration of natural resources.

Bolivia and Venezuela have granted Russia’s state-owned oil company Gazprom major oil and gas concessions.

“These governments can monopolize any sector of the economy which they designate as a public necessity,” said Oswaldo Barriga, president of Bolivia’s association of private exporters, CADEX. “Companies have no legal protection.”

“Violent activism promoted by these governments is scaring … everybody,” said Jim Bibb, managing director of Ballyco, an oil-and-gas service company.

He said that recent peasant takeovers of the homes of government opponents such as Victor Hugo Cardenas, a one-time vice president of Bolivia, may have paralyzed a planned $250 million investment by a European consortium.

“One has to know how to navigate through these shoals,” said Franklin’s Mr. Petty. “They need people who have the technology and know how to operate mines and oil fields and are beginning to realize that.”