31-01-06 Apparently heeding the statement by Bolivia's new socialist president that his natural gas-rich nation "needs partners, not bosses," a Brazilian state-owned giant with major investments is offering to undertake joint ventures with its much smaller Bolivian counterpart.
Bolivian Hydrocarbons Minister Andres Soliz made the announcement after meeting with Jose Fernando de Freitas and other executives from Brazil's Petrobras, the official's first such encounter since President Evo Morales' government took office.

Soliz called the meeting the beginning of the "rebuilding" of Bolivia's relations with Petrobras, which -- he said -- went through a "bad time" during the two administrations of conservative Gonzalo Sanchez de Lozada, who governed from 1993-1997 and again in 2002-2003, before being driven out of office by massive protests.
Petrobras "is coming (here) with the intention of recovering its role of partner in the production chain" in the energy sector,” he said.

De Freitas said that a healthy dialogue had been restarted to guarantee "better conditions and opportunities in the future" for the two nations and their energy firms.
Soliz noted that a new phase in relations had commenced with an eye toward recovering the "spirit" of Petrobras's 1993 offers of equal partnership. He referred to the decision made by Sanchez de Lozada during his first administration to push for the participation of US-based oil major Enron in the construction of the Bolivian-Brazilian gas pipeline instead of making Bolivia's state petroleum firm, YPFB, a partner in the project.

"Forty % of the pipeline went to Enron after it had put in barely a single cent. That is very serious," Soliz said, citing an investigation into 1990s privatizations that was carried out under former President Carlos Mesa.
Soliz said that Bolivia must set up a first-class technical team to negotiate the alliance in new energy projects with Petrobras.

No detailed discussion was undertaken at the meeting of the Brazilian firm's offer to make YPFB a partner in the two refineries it controls in Bolivia's Cochabamba and Santa Cruz provinces, said Soliz. The two facilities were privatized in 1999.
At present, Bolivia exports about 23 mm cm (about 811 mm cf) of natural gas to Brazil each day, and the two nations have in the works a project to build a petrochemical plant near their mutual border.

Morales, the first indigenous head of state in this Andean nation with an Indian majority, won the presidency after promising to nationalize Bolivia's huge reserves of natural gas, though without expropriating assets of the foreign-owned firms that are now extracting the fuel under contracts signed in the 1990s when conservatives held power in La Paz.
He proposes to effect a transformation of the energy sector by renegotiating those contracts, but some of the multinationals now doing business in Bolivia have threatened to haul La Paz before international courts of arbitration if the proposed changes are not to their liking.