- The Washington Times - Thursday, May 4, 2006

SANTA CRUZ, Bolivia — Four South American presidents announced an agreement on energy pricing last night, seeking to dispel the impression that the continent’s left-wing leaders were sharply divided over Bolivian President Evo Morales’ shock nationalization of the Andean nation’s energy sector.

“In this meeting, any concerns the presidents may have had have been dispelled,” Mr. Morales said after a summit in Puerto Iguazu, Argentina, where he and Venezuelan President Hugo Chavez joined the leaders of Argentina and Brazil.

They agreed that prices would not be changed without bilateral negotiations.

Earlier, Mr. Chavez threw his full support to Mr. Morales.

The summit had been expected to put on display the sharp divisions among South America’s left-wing leaders over the energy nationalization by the recently elected Bolivian president.

Venezuelan Energy Minister Rafael Ramirez told reporters at the emergency meeting that his government would help Bolivia implement the nationalization program announced Monday.

“Bolivia has asked us for aid in the hydrocarbon industry, and we are ready to comply,” Mr. Ramirez was quoted as saying by Reuters news agency.

The summit was called to discuss Bolivia’s action with the leaders of Argentina — another major beneficiary of Venezuelan oil largess — and Brazil which, with $1.6 billion invested in Bolivia’s natural gas industry, stands to be the biggest loser.

The center-left Brazilian government of President Luiz Inacio Lula da Silva said yesterday it was freezing future investment in its Andean neighbor, while leftist Argentine President Nestor Kirchner was also understood to be disturbed.

Brazil and Argentina rely on cheap gas from Bolivia and their leaders — both of whom are up for re-election — are worried about higher prices from the nationalization.

Mr. Chavez, who has used his nation’s oil bonanza to support leftist leaders from Cuba to Nicaragua and provided cheap loans to help Argentina pay off crippling debts to the World Bank, flew to Bolivia on Wednesday night to accompany Mr. Morales to yesterday’s summit.

“Our salute, and also — why not? — our congratulations for this resolution in the sacred exercise of Bolivian sovereignty,” Mr. Chavez declared upon his arrival in the Bolivian capital, La Paz, where he was greeted by Mr. Morales and Vice President Alvaro Garcia Linera.

Arriving in Puerto Iguazu yesterday, he acknowledged “internal tensions” among the region’s leftist leaders, but said, “Such tensions cannot persist when the political vision of great leaders dominates, when there is will for integration,” Reuters reported.

Even before Mr. Chavez’s arrival in La Paz, Venezuela had promised to send 400 accountants from its state oil company to help the Bolivians audit the books of foreign energy companies, presumably in search of evidence to support Mr. Morales’ order that the companies renegotiate existing contracts under threat of expropriation. Soldiers have been guarding company offices since the decree was announced on Monday.

Mr. Morales had previously proposed a merger of Bolivian and Venezuelan oil and gas reserves into a regional conglomerate called Petroamerica that would control South American energy production.

Sergio Gabrielli, president of Brazil’s national energy company, Petrobras, told reporters yesterday in Rio de Janeiro that Bolivia was violating existing contracts and said his company would seek international arbitration in New York courts.

“We are suspending all possibility of new investments in Bolivia,” he said, pledging to turn elsewhere for future gas supplies. Bolivia currently supplies 75 percent of gas needs to Brazil’s largest city, Sao Paolo.

Mr. Lula da Silva, who had supported Mr. Morales’ presidential bid last year, said going into yesterday’s summit that he would need “all my skills acquired as a past union negotiator” to try to “bridge an understanding.”

But Mr. Morales said before leaving La Paz that he would not back down from Monday’s action, and one oil executive complained that soldiers were preventing messengers from removing documents that needed to be stamped by lawyers and notaries for urgent legal transactions.



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