Philip Withers Green
OGJ Correspondent
LA PAZ, Oct. 15 -- Popular opposition to Bolivia's plans to export LNG threatens to oust that country's government.
For the second time in 8 months, the presidency of Gonzalo Sanchez de Lozada hangs in the balance this week. Riots that led to a bloodbath in the Bolivian capital and neighbouing city of El Alto have left dozens of dead and hosptials overflowing with wounded.
Antigovernment opposition groups have mobilized thousands of people to protest against plans by a consortium led by Repsol-YPF SA, BG Group PLC, and PanAmerican Energy Inc. to export some of Bolivia's vast natural gas reserves via Chile to Mexico and the US.
The president's backing for the ambitious $5 billion Pacific LNG gas export project has now been undermined. To try to restore calm, Sanchez de Lozada made a television address to the nation announcing his intention to stay on the job, come what may, and to issue a supreme decree committing the government to "no new gas exports."
The decree says the government will first carry out a "people's consultation" and reach consensus on what's to be done with Bolivia's new-found gas wealth. Opponents complain that 18% royalties payable by foreign oil companies on gas exports are too low, and that the scheme will benefit others more than Bolivia.
Protestors chanting, "Our gas is not for sale," are calling for Bolivia's gas to be monetized inside the country in new industrial development schemes and to not be sold cheaply abroad.
The government has failed in its attempt to explain that the two schemes would have to go hand in hand. Extraction of Bolivian NGLs and methane for petrochemical feedstocks and other uses are not deemed economically feasible without a major increased in gas production tied to an export scheme.
