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Concern Growing Over Bolivia's Decree to Nationalize Oil, Gas Industry


Foreign governments, oil industry officials and investment analysts say they are concerned about Bolivia's decision to nationalize its oil and natural gas industry.

The Spanish government said Tuesday, it is deeply worried, as shares in the Spanish energy group Repsol plunged more than two percent. The group has major interests in Bolivia.

Brazilian energy officials described the nationalization decree by Bolivia's President Evo Morales as an unfriendly act that must be reviewed. Brazil's state-owned Petrobras company operates natural gas fields in Bolivia.

The European Commission said it has noted the Bolivian decree with "concern." It said the decision to nationalize could have a negative impact on oil and gas markets that are already under high price pressure.

Investment analyst Mark Tinker, of the firm "Execution Limited," says the change will make foreign investors reluctant to put their money in Latin America.

President Morales nationalized the industry on Monday and sent troops to natural gas fields to ensure continued production.

In the decree, he said foreign energy companies must sign new operating contracts within 180 days or leave the country and turn over most production control to Bolivia's state-owned oil company.

The move is expected to also affect other foreign companies, including the French group Total, the U.S. company ExxonMobil and British Petroleum.

An ExxonMobil spokesman in the United States said the company is monitoring the situation.

Bolivia has the second-highest natural gas reserves in South America after Venezuela.

Some information for this report was provided by Bloomberg.

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