Bolivia Nationalizes the Oil and Gas Sector



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The Nationalization Spree

On May Day5 - May 01, 2006, Evo Morales Ayma (Morales), President of Bolivia, announced that the oil and gas sector in Bolivia was being nationalized. The announcement was considered significant because Bolivia, with the second largest natural gas resources in South America after Venezuela, played a significant role in the regional gas market.....

Even as the announcement was being made, the Bolivian army took control of the 56 oil and gas sites in Bolivia, thus completing the process of nationalization. Morales also said that the other natural resources of the country such as mines, forests, etc. would be subsequently nationalized......

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Morales gave six months' time to the foreign companies in the oil and gas sector to renegotiate their existing contracts with the government or leave the country.The companies were also ordered to give up ownership of the oil and gas fields. Besides, all future sales had to be channeled through a state-owned company. Responding to this decree, the foreign companies in Bolivia said they would proceed with caution until the government clarified the terms and conditions of the new contracts..........

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