Investments in Latin American countries jeopardised

Thu, 04 May 2006

Western energy watchdogs warned against some Latin American countries such as Bolivia alienating international oil companies through energy nationalisation policies .

Such policies threatened to close overseas investment opportunities from such countries as France and Spain by altering their relationship with multinational energy corporations. Reactions from Condoleezza Rice, U.S. Secretary of State, and Lula De Silva, president of Brazil, were hostile with the latter proclaiming that he would defend his country’s contractual right to invest funds in obtaining Bolivian gas and to continue financing the country’s resources.

De Silva and the presidents of three Latin American countries will meet to discuss a resolution of the crisis sparked by Bolivia’s president. Alex Turkeltaub, MD of the Frontier Strategy Group, mentioned a widespread concern regarding the knock-on effects of such nationalisation strategies for overseas investors .

Latin America, as a region, holds approximately one quarter of the world’s copper resources, as well as significant reserves of iron ore, gold and minerals . Complaints regarding contractual violations from large energy groups will need to be directed to and dealt with by the International Centre for the Settlement of Investment Disputes at the World Bank .
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