Morales says there may be no compensation for oil company investments

LA PAZ, Bolivia — President Evo Morales warned on Thursday that foreign companies including Brazil's Petrobras may not be compensated following the nationalization of their operations in Bolivia — just hours after the two countries agreed to study forms of compensation.

"There are companies in Bolivia that don't respect Bolivian laws. They have betrayed our country," Morales told a news conference at a European Union-Latin American summit in Vienna, Austria.

Morales' comments threw into doubt an agreement announced only hours earlier by Brazilian and Bolivian officials meeting in the Bolivian capital of La Paz. The officials late Wednesday said the two governments were creating a commission to study how energy companies would be compensated in the wake of the nationalization.

The South American neighbors were seeking to defuse tensions from Morales' decision last week to set gas prices and transfer majority control of all energy operations to its state energy company, Yacimientos Petroliferos Fiscales Bolivianos, or YPFB.

But in the Austrian capital, Morales seemed to harden his country's bargaining position, saying that some foreign companies might not get compensation because Bolivians have yet to benefit from technologies used in the oil and gas sectors.

"If they have recovered their investment, then there is no reason to compensate them whatsoever," Morales said.

He cited Brazil's state-run oil firm Petroleo Brasileiro SA, or Petrobras — Bolivia's largest foreign investor — and said dozens of contracts with other foreign firms were invalid.

"Any new contract, bilateral or multilateral must be ratified by Congress," he said. "The more than 70 contracts we have so far ... all are unconstitutional."

Morales also accused oil companies of evading taxes and smuggling out oil, but did not name the companies.

Brazil's Foreign Ministry had no immediate comment on Morales' statements.

Foreign energy companies have invested more than $3.5 billion in Bolivia since 1996, including more than $1.5 billion from Petrobras. The country is home to South America's second-largest natural gas reserves after Venezuela.

Bolivia currently exports more than two-thirds of its daily natural gas output of 35 million cubic meters to Brazil, and Petrobras in recent years has been the largest single investor and taxpayer in Bolivia.