Bolivia's Irresistible Reserves:Wealthier Neighbors Need Nation's Gas for Economic Growth

[Judi Lynn]

Bolivia's Irresistible Reserves
Wealthier Neighbors Need Nation's Gas for Economic Growth
By Monte Reel
Washington Post Foreign Service
Sunday, February 10, 2008; Page A18

LA PAZ, Bolivia -- When President Evo Morales took state control of Bolivia's energy sector nearly two years ago, critics warned that investors would abandon the country's gas fields and ultimately sink the industry.

They were half-right. Production has slowed along with investment, forcing Bolivia to renege on some of its export commitments this year. But foreign governments, often in the form of state-owned companies, have jumped in to resuscitate the energy sector.

The reason is simple: They can't afford not to.

South America's largest countries -- particularly regional powerhouses Brazil and Argentina -- are facing energy crunches and need natural gas to fuel economic growth. That has made them dependent on the poorest country on the continent and has helped Morales salvage a sector that critics believed was on the road to ruin.

"With the new investment, we'll be able to increase production little by little starting now, in 2008," said Energy Minister Carlos Villegas. "The increases will allow us to meet our export commitments -- and in some years, we'll have more than enough to exceed them -- by 2010 or 2011."

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