Libya plans nationalisation of oil firms, says Gaddafi
Source: BI-ME , Author: BI-ME staff
Posted: Sun January 25, 2009 12:00 am
LIBYA. Libyan leader Muammar Gaddafi said his government could nationalise foreign oil firms operating in the country unless prices rise to US$100 a barrel, the state news agency Jana reported yesterday.

“There have been calls for the nationalisation of the oil and gas industry,” he said at a dinner on Friday night for visiting King Juan Carlos of Spain.

“We hope this will not happen. We hope oil prices will rise to a reasonable level,” he said. “A price which stabilises at around US$100....is a reasonable target price.”

Libyan newspapers have been calling for the sector to be nationalised to enable Tripoli to hold more sway over production levels and on how to react to price falls.

Nationalisation was “a legitimate right” and would allow Libya “to control the oil industry without foreign participation,” said Kadhafi.

But the Libyan leader, whose country currently produces 1.7 million barrels a day, gave assurances that no rash decision would be taken.

“In the past, decisions on nationalisation have been taken unilaterally and rapidly. But today I don’t think that ][Libya’s executive bodies would take any such sudden decision,” he said. “There must be a compromise with the foreign partner.”

The nationalisation calls have raised fears among foreign oil companies but been seen by many observers as a means to apply pressure on international operators to cut output as prices slide.

Libya is the African continent’s third-largest oil producer after Nigeria and Angola, and it has estimated reserves of 42 billion barrels.

On Friday, New York’s main futures contract, light sweet crude for delivery in March, rose US$2.80 a barrel from its closing price the previous day to US$46.47.

The higher prices underscored adherence to production cutbacks by the Organization of Petroleum Exporting Countries, industry analysts said.

Since September, the group has cut a total of 4.2 million bpd from its production to moderate the fall in crude prices, which have plummeted by about US$100 per barrel since their record high of US$147.50 in July.

Libya, however, earlier this week ruled out the possibility of a new cut in its own output.

“We have already reduced our production sufficiently, even going beyond the cut in our quota demanded by OPEC. We would not envisage a new reduction,” said Libya’s OPEC representative, Shukri Ghanem.

Meanwhile, Bolivian President Evo Morales has nationalised the Chaco oil company, managed by Anglo-Argentine Panamerican Energy.

“Little by little, we are taking back our companies,” Morales said in Chaco’s offices in the central town of Entre Rios, after signing the nationalisation decree.

The leftwing president has had his government take over several companies in Bolivia’s important gas and oil industry, as well as others in telecoms and mining, since taking power in 2005.

The nationalisation of Chaco took place just two days before a referendum on a new constitution Morales has championed.

If passed, as expected, the revised basic law would define Bolivia as a socialist state and give far greater powers, land and revenue to the indigenous majority from which he hails.

Morales, who went to the Chaco offices with a unit of soldiers, charged that “oil companies are not respecting Bolivian standards,” and said that his government “will respect private investment as long as they respect Bolivian norms.

“We want partners, not bosses,” he said.

The nationalisation decision raises state-run Yacimientos Petroliferos Fiscales Bolivianos’ stake in Chaco oil from 49% to 99%, with 1% still in private investor hands.

Panamerican Energy said on its website it mainly conducts oil prospection in southeastern Bolivia, where the country’s richest gas deposits are found.

Chaco’s absorption by YPFB began in May 2008, when it gained control of half the foreign company’s stock in negotiations.

The move consolidated Morales’ hold on Bolivia’s gas and oil reserves that began in May 2006 with the nationalisation of 12 oil and gas companies in the area.

A year later, Morales nationalised a foreign telephone company and four other oil companies, including 49% of Chaco.

Since the May 2006, Bolivia has received a flood of revenue that reached US$1.7 billion in 2007 and an estimated 2.5bn in 2008. An admirer of Cuba’s Fidel Castro and ally to Venezuelan President Hugo Chavez, Morales – elected in December 2005 – has also pushed a plan to redistribute wealth to the country’s poor indigenous people.
 

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