Menu
Share
Share this story
Close X
 
Switch to Desktop Site

Latin states seek more control of oil

Venezuela, Bolivia, and Ecuador want new terms with energy firms.

About these ads

Tens of thousands of poor protesters took to the streets in Bolivia this week, demanding that President Carlos Mesa do what Venezuelan President Hugo Chávez has already done: take greater state control over oil and gas production.

Last month, Mr. Chávez changed the terms of contracts with 32 foreign companies operating here. In the next six months, they must form joint ventures with the state oil company, Petroleos de Venezuela (PdVSA), and accept a 49 percent minority stake; turn over half their profits to the government; and pay back taxes that could total $2 billion.

"If they don't pay it, they will have to leave the country," Chávez said on TV last Sunday.

At a volatile time for world energy markets, the higher cost of doing business in Venezuela, the world's fifth-largest oil supplier, adds upward pressure to prices already hovering near $50 a barrel. And if Bolivia joins Ecuador, which said this week that it, too, would review its oil contracts, prices at the pump could rise further.

But if Venezuela's experience is a gauge, the region's poor are not likely to gain from a greater state role in their country's oil wealth.

Overall, Venezuela's economy is booming. Last year, oil exports brought in $29 billion, up from $22 billion in 2001, accounting for 52 percent of all government revenue. The country's economy grew by 18 percent last year, and the United Nations projects 5 percent growth this year.

But according to the government's own figures, 55 percent of the population lived in poverty in 2003, up from 43 percent in 1998. Extreme poverty almost doubled, hitting 25 percent. In 1992, child malnutrition was 9 percent; in 2003, one-third of children were undernourished.

Next

Page:   1   |   2   |   3


Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.

Loading...