Bolivia takes over Transredes pipeline company
Bolivia’s leftist government on Monday took over pipeline company Transredes after failing to reach a share buyback agreement with its controller, Ashmore Energy International Ltd.
The state takeover of Transredes was ordered in a May 1 decree by President Evo Morales, but after a month of talks, the two sides could not reach an agreement over a share transfer, leading the government to seize the company. “The whole share package of TR Holdings (Ashmore) in Transredes has been nationalized and must be transferred to the Bolivian state,” the government said in a decree read live on state television.
When making the announcement, the Bolivian government said that Royal Dutch Shell has an interest in Transredes, but in May 2007 Ashmore announced the acquisition of Shell’s 25% stake in the company. With this move, state-run energy company YPFB will control a 98% stake in Transredes, one of the largest natural gas pipeline firms in Bolivia. “Multinational companies cannot come here to do politics, we can’t allow them ... to conspire against democracy,” said Morales, making a veiled reference to reports that foreign energy firms have been dealing directly with regional governments controlled by the opposition.
The decree did not specify how much Bolivia would pay for Ashmore’s 50% stake in Transredes, but it said that the US-based company will receive $48 per share. During the takeover ceremony in the eastern city of Santa Cruz, Energy Minister Carlos Villegas said that Transredes’ operations, which include pumping natural gas to Brazil and Argentina, would continue as normal. The seizure of Ashmore’s controlling stake in Transredes is in line with Morales’ plan to exercise greater control over Bolivia’s vast natural gas reserves and the country’s energy industry. Last month Morales announced a $6.3 million deal with Spanish oil company Repsol, which agreed to cede control of its Andina subsidiary to the government but retain a minority stake.
Bolivia also closed a deal to buy a controlling stake in energy firm Chaco, owned by British oil giant BP Plc, and it is negotiating a similar deal with storage company CLHB, or Bolivia’s Hydrocarbon Logistics Company.
Bolivia has the second-largest natural gas reserves in South American after Venezuela. Neighboring Argentina and Brazil are the main buyers of Bolivian natural gas and their energy-hungry economies depend heavily on Bolivian supplies. (Reuters)
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