August 10, 2007 / 9:07 PM / 12 years ago

UPDATE 1-Venezuela, Argentina sign Bolivia energy accords

(Recasts with Argentina deal, rewrites throughout, changes dateline, byline)

By Julieta Tovar

TARIJA, Bolivia, Aug 10 (Reuters) - Argentina and Venezuela pledged new oil and natural gas investments on Friday in their neighbor and leftist ally Bolivia, which is seeking new investors after nationalizing its energy sector last year.

Leaders from the three countries met in Tarija, Bolivia’s natural gas capital, where President Nestor Kirchner said Argentina would give Bolivia soft loans for a $450 million processing plant to ship more natural gas to Argentina.

Bolivia and Venezuela launched an ambitious energy alliance earlier in the day, announcing $600 million in oil exploration by a new binational company, YPFB-Petroandina.

In Tarija, President Evo Morales said, as he has before, that companies that do not meet investment commitments will be thrown out of Bolivia, and Kirchner said Argentina would step in.

“My dear Evo, my telephone is waiting for your call. If these businessmen don’t invest, just pick up the phone and we Argentines are going to come invest with you,” Kirchner said.

Morales nationalized Bolivia’s energy industry in May 2006, hugely increasing the government portion of profit from foreign oil companies such as Brazil’s Petrobras (PETR4.SA) and Spain’s Repsol-YPF (REP.MC).

Venezuelan President Hugo Chavez, who this week toured the region promising new energy investments in Argentina, Uruguay and Ecuador as well as Bolivia, has used wealth from his country’s oil exports to extend his regional influence.

His new joint venture with Morales — 60 percent Bolivian and 40 percent Venezuelan — will explore in the unexplored Amazon region north of La Paz and in blocks in Chaco, in southeastern Bolivia.

Chavez also pledged financial backing for Bolivia to start developing a petrochemical industry.

Argentina, meanwhile, will give Bolivia a 20-year, 1.5 percent loan to finance a gas separation plant billed as becoming the biggest in South America, with capacity to process 30 million cubic meters of gas a day, Kirchner said.

Kirchner previously pledged to invest another $1.5 billion in a pipeline to be ready within three years to increase Argentine natural gas imports from Bolivia to 20 million cubic meters a day, almost three times current levels.

Critics say Kirchner’s price controls on natural gas produced at home have dampened investment in Argentina’s own energy industry and question his plans to bring increase shipments of more expensive fuel from Bolivia.

Morales and Chavez also announced a joint $70 million investment in a thermoelectric plant for the Chapare region. Bolivia will put in 60 percent and Venezuela will add the rest.

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