4 South American Presidents Hold Emergency Energy Summit

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. Bolivia also agreed to support the "Gas Pipeline of the South."

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

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

Venezuelan President Hugo Chavez called the four-countryenergy summit “extraordinary” and Argentine President Nestor Kirchner declaredthat 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 theconstruction, the growth, the consumption, and is a bilateral situation thatwill be resolved between the countries that have to debate the price.”

The summit comes just days after Bolivian President EvoMorales nationalized his country’s oil and gas reserves, raising fears about apossible cut in energy supply.

At yesterday’s meeting Boliviaguaranteed to continue supplying gas to its largest consumers, Argentina andBrasil, although prices, they say, would be discussed bilaterally.

Bolivia’snationalization could have the largest potential affect on Brasil, whose statePetroleum company, Petrobras, has $1.6 billion in investments in the Andeannation. Over 50% of Brasil’s energy alsocomes from Bolivia. Although Brasil announcedon Wednesday that it would cut off new petroleum investment in Bolivia, PresidentLuiz Inácio Lula da Silva, has since statedthat he might reconsider his declaration to stop investment.

Boliviaalso agreed on Thursday to join the other three countries in their plans tobuild the “Great Southern Gas Pipeline” which could cost $25 billion and wouldrun 6,000 miles from Venezuelato Argentina.

“We don’t have another alternativethan integration in order to insert ourselves in this world, calledglobalization: take our people fromunderdevelopment, from the misery, from poverty, and carry forward this truelatinamerican integration project.” Explained President Chavez

While critics attempted to portraythe summit as a battle between oil-producing Bolivia and Venezuela againsttheir South American counterparts, such fears were waved away by PresidentSilva, who explained, “None of the [four] countries want hegemony withoutassociation.”

According to the Prensa Latina,Silva went even further to say that, “we are initiating in South Americasomething that took Europe 50 years to do, andsurly they had a lot of headaches, but the certainty endured that only unitedwould they construct the new political and economic geography.”

“The new [gas] prices will bediscussed in the most democratic way possible.” Silva said, “We recognize thatit is a difficult situation for Boliviaand its president Evo Morales. Werecognize Bolivia’ssovereignty for its resources.”

The Venezuelan daily El Universal reported thatMorales, “chose to express his ‘happiness’ and ‘honor’ to be able to share thissummit with the presidents of ‘the most developed countries’ of South America,whom he thanked for their ‘signs of solidarity’ for the problems that Boliviasuffers.”

PresidentChavez has called Bolivia’snationalization “historic,” which mandates that all foreign oil companiesoperating in Bolivia signagreements ceding 51% of the company to Bolivia within the next 180days.

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

The four South American Presidents will hold afollow-up meeting next August in Caracasto continue the energy integration discussion.