Tuesday, May 23, 2006
En declaraciones recogidas por la Agencia Boliviana de Información, el titular de Planificación indicó que el proyecto está orientado a desarrollar proyectos binacionales para explotar yacimientos mineralógicos en todo el territorio boliviano. Por eso negó que el ingreso de capitales venezolanos para apuntalar esa sociedad minera tenga por objetivo explotar los yacimientos del Mutún, tal como se informó en algunos sectores opuesto a la administración gubernamental.
Ese jueves 25 se procederá a la apertura del sobre A, el sábado 27 el sobre B (propuesta económica) y el 30 de de mayo se adjudicará la explotación de ese proyecto siderúrgico. Villegas explicó que la fecha están en carrera las empresas Jindall Still and Power (India), Mittal Steel Group (británico-holandesa) y Techint-Siderar (Argentina).
El ministro Villegas reconoció que un proceso de licitación tiene dos desenlaces: habrá un ganador y un perdedor y el gobierno está jugando a ganador, es decir, adjudicar el proceso de licitación a una empresa ganadora. [A menos que estas empresas retiren sus propuestas, como ya lo han hecho varias otras].
Thursday, May 18, 2006
The image was taken in 2001. A side-by-side comparison of what the place looked like in 1986 and 2001 can be found by clicking here. 
What does this photo show? Nothing but the effects of increased migration from the Altiplano to the Santa Cruz lowlands, and the application of Aymara production and land distribution techniques. The pie or radial patterned fields are part of the San Javier resettlement scheme. They are the visual translation of Andean communitarism imported to the Eastern part of the country.
You shouldn't be surprised by the fractioning of the land, this is a common feature of "ancestral" altiplanic methods of production. In post-colonial altiplano, land is/was inherited in such a fractional manner, and of course, with time, efficiency began to suffer. Eventually the mini-fundio became commonplace and nowadays, some communities subsist even under a "surco-fundio" system. The pattern is being replicated in the Bolivian lowlands, despite the availability and knowledge of alternative production methods, we can only expect the same ultimate result for any redistributed lands. The fields illustrated in the photograph are not producing soybean or any other "cash crops" such as rice or wheat, they are too small for efficient production. 
What's next? As you read this, the Morales government is preparing the second (or third) Land Reform in Bolivian history, 4.5 million hectares (about 17,375 square miles - the size of the states of the state of Massachusetts and New Jersey combined) are to be redistributed to the indigenous poor, the same folks who are now eking an existence in the communities such as the one seen above, or are just about ready to abandon their minifundios in the altiplano.
Other than property rights being obliterated, what worries me are the upcoming decreases in national food production once the fields targeted for reform are
Alvaro Ruiz has more on the topic.
Notes and Sources:
 Detailed explanation is available in the following website: <http://asterweb.jpl.nasa.gov/gallery-detail.asp?name=bolivia>
 Surco is refers to each of a field's furrows. Under a "surco-fundio" each row has an owner.
 Efficient land use: <http://veimages.gsfc.nasa.gov/1562/tierras_baja_strip.jpg> targeted for land reform.
 More on "Fast Track Land Reform" in Zimbabwe: <http://www.hrw.org/reports/2002/zimbabwe/>
Tag: South America, Bolivia, Evo Morales, Land Reform.
Wednesday, May 17, 2006
Tuesday, May 16, 2006
Not much financial information about WGTL is available, given that it is a privately-held company (meaning that they don't trade their stock in any exchange and are not regulated by the Securities and Exchange Commission). However, there are some precedents to their activities.
The company was founded in 2000, according to a somewhat obscure UFTO Note :
"Their [business] plan is to acquire ownership rights (in some cases production rights) to certain stranded gas fields at deeply discounted prices, and capitalize on
opportunities that now exist to convert these "stranded" natural gas fields into
synthetic petroleum products.
Why don't the major [oil & gas companies] do this themselves? They do hold on to larger fields and may eventually develop them as LNG sources (or increasingly, with GTL), but they have no interest in smaller fields, e.g. under 3 tcf. This leaves a huge opportunity for players like World GTL. In fact, majors have already said they'd license their GTL technology and help with plant financing. (...) Turning Stranded Gas into Proven Oil Reserves World GTL has come up with an interesting strategy. Once the development is done on a project (i.e. secure gas rights, do site plan, license technology, do preliminary engineering, arrange financing, sales agreements, etc.) previously stranded gas reserves with little to no value will essentially have been converted to "in the ground" gasoline and diesel inventories which can be easily monetized in the international oil market. (...)"
World GTL, has had successes in the past, they developed one of the contintent' first GTL plants in partnership with Petrotrin, the Trinidad & Tobago petroleum company (which took one third of the equity in the project) and Guardian Holdings which took an equity stake in the project through its alternative energy Prometheus Fund .
As far as management goes, the company was founded by a number of former executives of some major oil companies, many of whom currently have a management position, including:
- Gordon H. Barrows, Chairman. Mr. Barrows has advised the United Nations, the World Bank and numerous governments and petroleum companies on petroleum matters. He is also Chairman of the Barrows Company, an international petroleum information company.
- David Loring, President and Chief Executive Officer. Previously involved in petroleum development and production projects with ARCO and major international projects with the General Motors Corporation.
- James Higbee, Vice President, International. Previously Managing Counsel for Squire, Sanders & Dempsey in Almaty, Kazakhstan; prior to that worked 18 years at ARCO, including as Director, International Negotiations and Contracts.
- Peter Tijm, Vice President of Technology. Twenty-eight years with Shell, including the Bintulu GTL plant.
- Leigh Noda, Chief Operating Officer. Mr. Noda has over 30 years of experience in the management of international petroleum refining operations with ARCO.
Notes and Sources:
 "Gas-to-Liquids"is a refining process that converts natural gas or other hydrocarbons into diesel fuel. It's a somewhat costly process that yields a cleaner "greener" fuel. Given Bolivia's diesel refining deficit and considerable demand -currently supplemented by imports from Argentina and Venezuela- the option of adopting the GTL method has been studied for many years.
 UFTO is a California-based advisory group that conducts "studies on behalf of a select group of energy utilities and vendors, to seek out technologies of interest and to facilitate collaborations among utilities, government and private companies." The complete article is found here, as of May 16, 2006.
My Hoovers and LexisNexis searches are yielding little results, this is it for today.
Company Websites: YPFB
Tags: Bolivia,Bolivian, oil, GTL, World GTL.
Wednesday, May 03, 2006
In this post I only want to report on the reactions of some of the companies directly affected by the announcement and the market’s reaction to the event itself:
§ Repsol (NYSE:REP).-
§ British Gas (LSS:BG).- Shares of BG Group, which holds three fields in Bolivia including the Margarita field, also opened lower this morning.
§ Pluspetrol Energy. - The company holds 6 fields, including the Madrejones camp, it’s more invested in the Peruvian Camisea project than in
§ Total (NYSE:TOT). –
§ Vintage Petroleum (A subsidiary of Occidental Petroleum Corporation NYSE: OXY). - It currently operates three fields, the Bolivian operations represent a marginal segment of its South American operation, and there was no release for the company regarding this issue. This is the only
§ Petrobras (NYSE: PBR). - Brazilian company Petrobras holds small but very public stake in
As far as the immediate reaction of the market, we can see that firms were quick to clarify their exposure in
It’s not clear how far this “nationalization” will really go; as far as I’m concerned, this is nothing but the long needed and awaited contract-renegotiation under a populist guise. Production is only being channeled through YPFB while administrative control of infrastructure remains on foreign control until negotiations start.
And judging by the text of the initial decree, the only asset that has truly changed hands, are the millions of Andina,
Tag: Bolivia,Bolivian oil,Repsol,Petrobras,Oxy,Evo Morales,Exxon,oil.
Apex Silver Mines Limited (Amex: SIL) today responded to unusual trading activity (I’m guessing the shorts are having a field day) arguing that the government does not plan nationalization of mines, this contradicts the president’s own comments, but Apex has a good point – the Bolivian Minister of Mines and Metallurgy has repeatedly commented that no nationalization of the San Cristobal mining project is planned. I wouldn’t count my chips yet, though the company is doing an impressive job addressing social needs of communities surrounding the mine and it’s starting to diversify its production in other South American countries, the concern is also 100% foreign owned and more than 50 percent managed by international personnel. Which makes it a prime target for Morales’ populist rhetoric, add to the mix the rising prices of precious and other minerals and the fact that the mine starts operating only in 2007 and you have a target of opportunity. At the close of the market today Apex Silver shares had sunk by $3.30 (
Vancouver-based silver producer Pan American Silver Corp (NASDAQ: PAAS), which has a 55-per-cent interest in San Vicente, a small silver-zinc mine in
Coeur d'Alene Mines Corp (NYSE:CDE) the company developing the San Bartolomé project had its shares fall by 57 cents or 8 per cent to $6.31 on the New York Stock Exchange. However, this company is somehow less exposed to instability as it manages sub-leased concessions owned by the state-run company COMIBOL and a number of cooperatives.
Though foreign mining companies are also exposed to expropriation risk, the threat is smaller than it was for gas and oil firms, and even other formerly state-run enterprises. As John Carlesso, chief executive officer for Toronto-based Apogee Minerals Ltd (TSX:APE) stated, oil and gas development; generate relatively few local jobs and results in a product that is exported at well below market rates. By contrast, a mining project can create thousands of jobs and typically requires substantial investment in infrastructure such as roads and power plants that
Looks like it’s more a matter of keeping the miners and the COB leadership happy, a similar relationship exists elsewhere in our continent, in the land of Bolivar, where the populist coronelisimo maintains a pretty good relationship with gold-mining company Crystallex International Corp (Amex: KRY) banking that the new jobs created by this North American company will prolong the sustainability of his regime.
At least in the short term, there is no strong signal that the Morales government is willing to “nationalize” foreign-operated mines –with the glaring exception of the recent EBX neutralization. The cynic in me tells me that Morales is waiting until the big projects start being profitable and all costs have been covered before he makes a move, but I think he’ll have his hands full dealing with the gas and oil expropriations.
_________________Evo Morales,nationalization,expropiation,Apogee, Apex Silver, mining