Sunday, May 07, 2006

4 South American Presidents Hold Emergency Energy SuBy: Michael Foxmmit


4 South American Presidents Hold Emergency Energy Summit
By: Michael Fox –

Caracas, Venezuela, May 6, 2006—The Presidents of Venezuela, Bolivia, Argentina, and Brazil met in Puerto Iguazú, Argentina, on Thursday, to discuss the effects of Bolivia’s recent nationalization of its hydrocarbons and the future of energy integration in South America.

The presidents of the four countries agreed to continue with bilateral discussions to resolve any remaining questions, strengthen the South American Trading bloc, Mercosur, and consolidate the integration of South America.

Venezuelan President Hugo Chavez called the four-country energy summit "extraordinary" and Argentine President Nestor Kirchner declared that this was one of the most important summits of his presidency.

At the press conference, Kirchner, said that the agreed upon document "is absolutely clear.... to help in the construction, the growth, the consumption, and is a bilateral situation that will be resolved between the countries that have to debate the price."

The summit comes just days after Bolivian President Evo Morales nationalized his country' oil and gas reserves, raising fears about a possible cut in energy supply.

At yesterday's meeting Bolivia guaranteed to continue supplying gas to its largest consumers, Argentina and Brasil, although prices, they say, would be discussed bilaterally.

Bolivia's nationalization could have the largest potential affect on Brasil, whose state Petroleum company, Petrobras, has $1.6 billion in investments in the Andean nation. Over 50% of Brasil’s energy also comes from Bolivia. Although Brasil announced on Wednesday that it would cut off new petroleum investment in Bolivia, President Luiz Inacio Lula da Silva, has since stated that he might reconsider his declaration to stop investment.

Bolivia also agreed on Thursday to join the other three countries in their plans to build the "Great Southern Gas Pipeline" which could cost $25 billion and would run 6,000 miles from Venezuela to Argentina.

"We don’t have another alternative than integration in order to insert ourselves in this world, called globalization: take our people from underdevelopment, from the misery, from poverty, and carry forward this true latinamerican integration project." Explained President Chavez

While critics attempted to portray the summit as a battle between oil-producing Bolivia and Venezuela against their South American counterparts, such fears were waved away by President Silva, who explained, "None of the [four] countries want hegemony without association."

According to the Prensa Latina, Silva went even further to say that, "we are initiating in South America something that took Europe 50 years to do, and surly they had a lot of headaches, but the certainty endured that only united would they construct the new political and economic geography."

"The new [gas] prices will be discussed in the most democratic way possible." Silva said, "We recognize that it is a difficult situation for Bolivia and its president Evo Morales. We recognize Bolivia's sovereignty for its resources."

The Venezuelan daily El Universal reported that Morales, "chose to express his 'happiness' and 'honor' to be able to share this summit with the presidents of ‘the most developed countries’ of South America, whom he thanked for their ‘signs of solidarity' for the problems that Bolivia suffers."

President Chavez has called Bolivia’s nationalization "historic," which mandates that all foreign oil companies operating in Bolivia sign agreements ceding 51% of the company to Bolivia within the next 180 days.

La Jornada reported yesterday that on his way to Thursday’s summit, Chavez met with Morales in Bolivia, where he announced that the Venezuelan state-owned oil company PDVSA will be signing an alliance with Bolivia’s Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) on May 18. Venezuela is also “prepared to invest exploration technology in the Andean nation and install a plant for the separation of Ethanol, Propane, and Methane- components of natural gas.”

The four South American Presidents will hold a follow-up meeting next August in Caracas to continue the energy integration discussion.