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La Paz - Bolivia Edition of March 28, 2004

BUSINESSES

River Plate crisis: Bolivia has gas reserves but it is caught between political, union and social opposition.
Chile looks for power sources

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Santiago of Chile: the originating power provision of Argentina is threatened cuts

The Press and agencies

The government of Chile admitted that it is worried about Argentina's decision to ration its natural gas exports, which will force the transandean government to consider other sources of power. Bolivia, which has sufficient gas reserves, has considerable internal opposition to export.  The Chilean minister of economy, Jorge
Rodriguez, declared yesterday that he is worried about the Argentine decision to rationalize his gas exports.
"we return to Santiago worried. We are seeing a problem that, lamentably, is going to affect the commercial interchange between Chile and Argentina in the future", said Rodriguez.
The Chilean authority was in Buenos Aires Friday to inquire in detail of the effects that the measurement could have in Chile, that is the main Argentine gas buyer.
Also, it said that "in this measure in which Argentina begins to restrict exports to Chile of the natural gas that we have purchased from Argentina, there is now an issue of national security which will force to consider other more secure sources of power".

The rationing
The president of Argentina, Nestor Kirchner, released a resolution Thursday by which "the export of natural gas which is useful for internal supply is rationed", with the purpose of avoiding a crisis in the generation, distribution and provision of electricity in Argentina.
Starting Monday, the population of Argentina will undergo the rationing of electrical energy between 06:00 and 18.00.
The rationing caused restlessness in Chile, which is the main buyer of Argentinian gas.
Chile daily receives 22 million cubic meters of Argentina gas via five pipelines constructed in the Nineties.


Fiscal measures
On the other hand, the Argentinian government also announced that it is studying the possibility of raising the tarrifs that are applied to the exports of petroleum and gas to face the present power crisis.
The head of Argentinian Cabinet, Alberto Fernandez, admitted that there is a consideration to raise the tarrifs by 20 to 30 percent, as reported by the newspaper The Bugler, of Buenos Aires, which interprets the measures as "more pressure" of the government on the gas companies, as they are considered the source of the current problems.
With the proposed tarrif, the Argentine government would look to elevate the tax costs of the producers of the fuel sector such that they would favor internal supply, or that they might intensify the tasks of exploration and production to satisfy both demands.
The Argentine government accused the gas companies of not having sufficiently invested and preserved domestic fuel reserves.
In answer to this accusation, the gas companies under concession by the government, stated that from 1993 to date they have invested 3,400 million dollars more than was aticipated under their contracts.

Bolivia and the key to the gas
As of May, Repsol YPF and Petrobras will export four million daily cubic meters of natural gas to Argentina, that has begun to undergo a power crisis.
The fields San Alberto and San Antonio, located in Tarija, will be those that will provide the power to the Argentine north, according to the announcements of the two companies, owners of those deposits.

The rejections
Nevertheless, the political parties in Bolivia with parliamentary representation rejected the sale of natural gas to Argentina as of May, because they anticipate that the power will simply be re-exported to Chile.
Workers Union Bolivian (COB) and Committee of Defense of Patrimony National (Codepanal) added initiatives in this line and warned to government that if persists in taking ahead the project it will unleash another "red October" similar to the one of 2003, that ended with the resignation of then president Gonzalo Sanchez de Lozada, during the "war of the gas".  [dan: the name Red October refers to an incident last fall in which nearly 100 protesters were gunned down by police in the central Plaza de San Francisco in one of the bloodiest incidents in recent Bolivian history]
Meanwhile, the Bolivian chancellor, Juan Ignacio Siles, said that the power crisis can be a "tool of important negotiation" and an aid to recover the sea.  [dan: historical footnote... among the many follies of Bolivian leaders of years gone by was the loss of a strip of land to the Chileans in 1884 that used to connect Bolivia to the Pacific Ocean.  The Bolivians have never forgiven the Chileans for taking that, and it provides strong color to all political, social and cultural interactions between the countries even today]
The minister of Economic Development, Xavier Walnuts, assured that he will not authorize that Argentina transfers to Chile even a single "Bolivian gas molecule".
Friday, the Chilean minister of the Interior, Jose Miguel Insulza, declared that its country has not requested that Bolivia that sells gas to it.
However, civic, social and enterprise representatives of Tarija, Santa Cruz, Pando and Beni, self-appointed group like the "average moon", are in agreement with the sale of natural gas to Argentina and noted that they will not allow the loss of this business.
The main natural gas fields of Bolivia are in Tarija and Santa Cruz, whereas Beni and Pando are co-contributors of the originating exemptions of that operation.
Supporting the industrialization of the gas

Cochabamba/ANF, and La Paz/the Press

The Society of Engineers of Bolivia (SIB) expressed yesterday its concern that before selling Bolivian gas it is important to consider the nature of its commercialization, in order to avoid the sale of precious natural resources at minimum prices.
That of comes off of a seminary factory made in this capital to approach technologies in the matter of hydrocarbons, within the framework the Foundation Science and Technology of the Americas and the SIB, that organized the census specialized in petroleum technologies and the gas.
"There are very many ideas to be found right now; there are people who say that the gas is due to export. We think actually that at the moment the gas is effectively not ours, since contracts in place with transnational companies already speak for it. Therefore, we propose its commercialization at all levels", said the president of the SIB, Arming Leigue.
"the [manner of the] commercializaion of the gas is our greater concern, because we think that only with this possibility we are going to be able to improve our country and to have the required income to leave our status as a developing nation", he declared.
"The present natural gas reserves, the variety of other hydrocarbons and lithium are the last raw materials whereupon we can still hope for a future for our country."
"It is dignity but also a question of price.  Also; installing petrochemical plants in the country and processing the gas ourselves will have greater opportunities ", insisted the director of the SIB.

Report of the FFAA
A report and analysis produced by the Armed Forces on natural gas established that gas must be commercialized in the country. The commander of the Army, general Caesar Lopez, said that first Bolivia must satisfy the internal market with energy and the industrial production of other petroleum derivatives, and only export the excess.
Already a month ago the Armed Forces gave to the president of the Republic, Carlos Table, an ample report on all the advantages and disadvantages of the commercialization of the gas, its export as a natural resource, as well as the possible alternatives for the transport of gas through a port in the Pacific.  [dan: possibly an eye towards export as LNG - Liquified Natural Gas - a form in which it can be transported longer distances to better markets]
The commander-in-chief of the FFAA, Admiral Luis Aranda Seeded, confirmed Friday that the report is into the hands of Head of State.

Environmentalists question a pipeline in Peruvian forest
He files/AP

Environmentalists questioned Friday to representatives of the Inter-American Development Bank by their plans to lend 75 million dollars to a project to pipeline natural gas in the Peruvian forest.
The bank, that lends money for economic development, has said that it will not give the financing for the Camisea project until an international partnership of oil companies -- including Pluspetrol of Argentina and Techint and Hunt Oil of the United States -- fulfills a list of environmental conditions.
Nevertheless, Atossa Soltani, of the organization Amazon Watch (Monitoring of the Amazon) of the United States, said that the list is inadequate.
A problem is that the pipeline operators have begun to dismantle the work camps before planting new vegetation in the damaged zones, as asked for by the I.A.D.B., indicated in a meeting with activists and leaders of the community.
In an interview, the director of the partnership Camisea, Alexander Segret, said that the environmental problems are inevitable in this type of projects, but that are being fulfilled the parameters. All the construction camps are not necessary to support the work of recovery, added.
"This type of project always is going to generate problems", said Robert Montgomery, environmental and social director of the I.A.D.B., in the seminary with the activists.
The Camisea project almost is concluded and the Peruvian government hopes that the gas arrives at Lima for August. Until now, the involved companies have financed it with 1,400 million dollars.
Uruguay also is affected

Montevideo/AP

The Uruguayan government watched with concern the rationing of natural gas from Argentina, that could affect its economic revitalization.
President Jorge Batlle, in the last year of his five year term, advanced that this Monday will raise the Argentine chancellor, Rafael Bielsa, who the restrictions ready in their country are proportional to which it applies to the companies internally.
Batlle will meet with Bielsa, who will visit Montevideo [Uruguay], and will raise the issue with him to what degree the internal Argentine problems will effect Uruguay.
At the moment, Usinas and Transmisiones Ele'ctricas (UTE), the power authority, has not raised some plan of restrictions or increases of tariffs to resolve the greater cost than produce the generation with usinas that the fuel that Uruguay does not produce.
The negative effect of this situation is complicated màs by one sequía that has affected país and by that the farming, motor sector of economic revitalization in the latter part of 2003, observes that the lack of rains can harm its plans for the harvests that prometían high performance. With respect to gas, Uruguay buys ten percent of its needs from Argentina, and sources of the distributing local companies, Gaseba and Conecta, are not strong as well because of problems with other imports.

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