The Bolivian government has *still* given out few details (to me, this is often not a good sign) but there have been a few developments in the last couple of days. The government's "spin" has been denied by some of the companies and the government has "clarified" (i.e. cut back) some of the very few specifics they did announce. In addition, key parts of the overall picture remain to be negotiated (the actual prices to be paid, the price Bolivia will pay the companies for part of the stock in their local subsidiaries, the status of that stock, and the ownership control of the refineries that produce all of the Bolivian petroleum products).
Some specifics points to watch out for:
a) ownership/control: The new government did not feel in a position to demand a return to full national control (which is still largely the norm in Lat America, almost universal in the Middle East and was the situation in Bolivia before the big sellout). The companies will retain some degree of control through some sort of Production Sharing Agreement (PSA) which in this era is the favored tool of privatization (PSAs are likely to emerge in Iraq next month?).
BUT the government has demanded the right to purchase a majority share of stock in the local subsidiaries, so the minutiae of corporate governance and the contracts will determine how much authority Bolivia actually has within these boundaries, and so far the public does not know those specifics (and may never know because of confidentiality clauses);
b) Profit splits: Morales announced an 82% share for the government which received headlines in the Bolivian and international press. The next day Total (France) and a few other companies denied this and leaked they had signed over only 50%. The British financial media then reported leaks that, in fact, there will be a sliding scale depending on the gas field and the block. The French financial media then quoted unnamed "experts" that the average split would be 58%. Yesterday Energy Minister Carlos Villegas "clarified" that the average government share would be about 70%. And of course a lot will also depend on the accounting definition of "profit".
c) Investment: The government announced that the agreement compels the companies to large and specific investments. But Petrobras denies "any commitment to future investment apart from routine maintenance spending for current operations", as does Total.
d) Legality: Bolivia's Constitution prohibits foreign ownership of natural resources. This was a major trump card for Morales in threatening to cancel the previous agreements (the companies threatened to take the government to court in Brazil and abroad their assets were seized). The new agreements sidestep the Constitutional requirement through a PSA, so Bolivia gives up a major point of leverage even though a big part the negotiations remain to be completed.
e) Marketing: The government states that in the new agreement marketing will be through the national company which could offer significant national control in some areas. However it is unlikely that the new agreements don't also include some major "lock-in's" for the production companies that would partly (or even almost entirely) negate national marketing control. The government has released nothing about this issue.
Two points of context:
1) Internationally, there has been a major push by the neo-liberal powers to favor PSAs. So far this been vociferously resisted - only about 10% of world oil is now handled this way - but it is felt the balance is teetering with several key "close calls" (Russia, other FSU states, Venezuela) and several new cases about to come up, especially Iraq.
A part of the argument for PSAs is that the nation can do just as well or better by leasing arrangements. Bolivia does bring out one point: in these arrangements power shifts from popular movements to closed rooms and once-and-for-all unknown agreements that usually have confidentiality clauses. Unlike a corrupt government, a bad 50 year agreement (if it holds up under international law) can not be readily cleaned up.
2) The PSAs, along with creditor cartels, trade agreements, etc were designed precisely to constrain alleged "popularism" like the Bolivian movement and they are indeed each a formidable problem for Morales in these negotiations often in indirect strategic ways that we might not think of. OTOH, IMO, the critical pieces of support (besides the mass support of his movement) have been Venezuela's threat to provide alternative finance, the split within neo-liberal countries (his main opponents came from Brazil, Argentina, France and Spain), and the Constitutional legacy left to him by the 1952 Bolivian Revolution.
Whichever way it turns out, Bolivia is likely to become an important case study in the limits and hopes of the Latin American Red Tide.
Paul