Interview with ex Ministry of Hydrocarbons and Energy, Andres Soliz Rada, December 5
How would you evaluate the achievements in the hydrocarbon sector this year?
Positive, but with some serious question for the future. The central achievement was the nationalisation of the hydrocarbons, on May 1, which rescued our national dignity. Its central objective consisted off recuperating the ownership, possession and absolute control of hydrocarbons, for which YPFB assumed, in the name of the state, ownership over gas and petroleum, defining the conditions, volumes and prices for the internal and external markets and for its industrialisation. The challenge lies in executing these ideas and in ensuring they do not remain simple statements.
During my term, which lasted from January 23 to September 14, we prioritised the elaboration of a national energy balance sheet, which has been paralysed since 1996, the year in which YPFB was liquidated. A shift in the energy matrix was proposed, with the aim of replacing as much of the internal consumption of gasoline, diesel and LPG as possible, for natural gas. Substitute products should be for exportation, to generate money.
The new hydrocarbon policy considers as strategic the construction of a gas duct from the mega gas fields of the south to Tarija and Mataral, in Santa Cruz, with detailed agro-industrial projects which function on gas, and the Bolivian Gas duct of the West (GABO, Gasoducto Boliviano de Occidente), which would unite those mega gas fields with Tarija, Tupiza (for use in mining), Uyuni (with the aim of industrialising the salt plains), Oruro, Patacamaya (another petrochemical pole), the city of El Alto (bastion of the recuperation of hydrocarbons), La Paz and the entry of gas into Beni and Pando.
In applying the Nationalisation Decree, the Ministerial Resolution 202 of August 2006, was dictated, which ordered Petrobras, Andina and Total to pay an additional $32 million per month, for the additional taxes from 50% to 82% in the mega gas fields “San Alberto” and “Sabalo”. The petroleum companies made their payments, which signified that they where obeying the nationalisation. With the first of the five payments, the president paid a bonus to the school children of the country.
The Ministry pushed forward the decree that transferred to YPFB, as a free holder, the shares of Fondo de Capitalizacion Colectiva (FCC), of the companies
In compliance with the Nationalisation Decree, an audit of the gas fields was carried out, with the aim of determining the real investments and amortisations of the companies, which should have served as the basis on which to sign new contracts. The agreement to expanding the sale of gas to
We elevated to the level of trial of responsibility the process initiated by Juan Carlos Virreyra (ex delegate for Capitalisation [Bolivian word for privatisation]) against those responsible for the illegal entry of Enron into the country. The directorate of YPFB was named and the project of a law for the refoundation of YPFB, as a corporative company capable of emitting bonds in the stock exchange, was elaborated, which would permit it to count on a large number of resources for the industrialisation of gas. We estimate that YPFB should function with the parameters that, in 1990, we outlined in the project for a law of investigation of fortunes, to guarantee its transparency.
YPFB signed contracts, it recuperated the ownership over hydrocarbons, there is more income, but yet it can’t operate in all parts of the productive chain. How much time is required to be able to do this?
There exist grave contradictions in these contracts. Whilst the contract framed (clause 4-3) and determined the ownership of
The petroleum companies have been able to have recognized the delirious investments that they say they have done and the puny amortizations that they indicated they had obtained in the country. With these figures the formulas for where revenue goes between YPFB and the petroleum companies have been elaborated. The companies say they have invested $3.500 million, which in reality, according to the preliminary results of the audit, have not reached even reached $800 million.
According to the Nationalisation Decree the data from the audits, and not the declaration from the companies, should have been taken into consideration as the basis for the contracts, as backed in the Decree 24335 of
The state petroleum company still does not have a majority in the privatised petroleum companies. You put forward a model of expropriation via a legal mechanism. Did the government study your proposal? Why was it not applied?
On this point, the president was badly advised during his electoral campaign. He was told that it was possible to nationalize without expropriating shares, which lead him to not want to apply article 22 of the constitution that authorizes expropriations after the payment of the corresponding indemnifications. In complying with this article, we suggested that in the Nationalisation Decree the expropriation of the necessary shares be outlined so that YPFB could control 50% plus 1 of the shares of
You argued personal reasons for leaving the Ministry of Hydrocarbons, just as the new contracts were about to be signed. Was there pressure for you to do this? What happened behind closed doors?
It is not the same thing to be the owner of the house or to be invited to someone’s house. I was invited by MAS to join the cabinet, that is why I suffered inevitable limitations. As one example of this, I was never able to designate my vice ministers.
Did the Brazilian government impede
Marco Aurelio Garcia, advisor to Lula, acquired a commitment from Vice President Alvaro Garcia Linera to “freeze” Ministerial Resolution 207, in which YPFB, complying with the Nationalisation Decree would take control of the commercialization of crude petroleum that entered into the refineries of Petrobras and ownership over the refined products. Therefore Petrobras’ refineries would stop being responsible for the commercialisation of the products, inside and outside of the country, and instead convert itself into a supplier of services. The vice president consulted me on the issue after having reached this commitment. As a consequence of this, I was obliged to dictate another Ministerial Resolution annulling the first one, which went against my conscious, the reason for which I presented my irrevocable resignation. The presidential spokesperson said that MR 207 was written up without consultation and the presidential advisor, Walter Chavez, classified me as “arbitrary”. The first comment is false, given that the Ministerial Resolution was made known to the president, the vice president, various ministers and the president of YPFB more than one week before it was publicly announced. In
In a new contract, Petrobras accepted to cede commercialization to YPFB and there was no advance in regards to the buying of the refineries nor in the definition of prices. What do you suggest in order to tackle this issue?
The president has demonstrated bravery and decisiveness in expelling the Brazilian company EBX, which tried to install ovens to process iron with vegetable carbon. This same bravery and decisiveness is needed in order to negotiate with Petrobras, under conditions of equity and equality.
You contributed a lot during your term. Did you always have support from the president for your projects and initiatives?
I have had a very cordial and respectful relationship with the president, which from my part continues to exist. My projects and initiatives had the limitation of being an invite of MAS.
The government finishes its term with successes but without having clarified irregularities such as the Hedging contract that Petrobras and Andina had which provoked damages to the country, or the lack of investment that Repsol YPF supposedly incurred, or the exploitation of the San Alberto and Itau gasfield as if they were only one rather than two. How will those cases end up?
The aggravated theft, of more than $171 million that Andina and Petrobras committed, to commercialise gas between them (and behind the backs of YPFB) at set prices, as well as the contraband and tax evasion committed by Repsol, Andina, Chaco and Petrobras are crimes that are being tried in the courts of the country. I proposed, without results, that the contracts with these companies be provision, until the pertinent verdicts were passed down.
What other issues of importance still pending have remained unresolved this year?
The necessity of fixing a new price to sell gas to Brazil, which can not be inferior to that which Argentina pays; advances in the projects for industrialization; the construction of large gas ducts to the interior of the country; and the installation of gas to the homes of all Bolivians.
The negotiation with
The issue of the liquid extraction plant and the formula via which the base rate for exportation of $5 per million BTU would vary were the most complicated issues with the government of Kirchner.
The premise of gas for Bolivians was not achieved. What is the challenge for next year?
Applying in full the Nationalisation Decree, with the aim of avoiding the frustration of the Bolivian people.
Do you want to add any additional comments which you consider pertinent?
Translated from La Prensa