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Bolivia Suspends Plans to Take Over Brazilian-Owned Refineries

Bolivia has suspended plans to nationalize without compensation two large oil and national gas refineries owned by Brazil.

Officials said late Thursday the plan was "temporarily" frozen. The move was suspended less than two days after Bolivia announced it would take control of the Villarroel and Elder refineries.

The two plants are owned by Brazil's oil company, Petrobas, and refine 90 percent of Bolivia's oil and natural gas.

Relations between La Paz and Brasilia have been strained since early May when Bolivian President Evo Morales announced the nationalization of all foreign energy assets in his country.

Brazil has invested $1.5 billion in Bolivia's natural gas and oil production. But, following the announcement of the nationalization plan, Brazil said it would cut most investments in Bolivia.

A decree Mr. Morales issued in May ordered the state energy company YPFB to take exclusive control of domestic oil and natural gas production within six months. Foreign energy companies' property in Bolivia was seized, and they were told to sign new operating contracts with the state-owned firm by November.

The nationalization program was temporarily suspended in August after the government acknowledged that YPFB lacks sufficient economic resources to assume its new role.

President Morales pledged the program will succeed.

Some information for this report was provided by AFP, AP and Reuters.