Friday, February 5, 2010

Bolivia Irked by Brazil Condescension

Bolivian politicians have delivered a curt response to Brazil's somewhat condescending stance on the
binding contract between the two nations. President Lula of Brazil said recently on February 4th after Brazil discovered huge reserves of oil and gas in deep offshore waters, "Shortly we will put our hands on our chests and say 'we have enough natural gas'. And we will continue buying gas from Bolivia because it's a poor country and we have to help them."

Lula neglected to mention that Bolivia provides the majority of Brazil's foreign natural gas needs at present and that Brazil voluntarily entered into a long-term binding contract with Bolivia with strict enforcement terms. Lula did not mention the contract explicitly and instead portrayed honoring the contract as a favor to its downtrodden neighbor. Vice President Garcia Linera and said that the contract is "obligatory and includes penalties for parties that break the contract". The contract mandates that Bolivia provide 22 million cubic liters of natural gas per day to Brazil and that Brazil must buy that amount regardless of demand.   Linera said, "These are contracts. These are contracts that must be obeyed and valued irregardless of the goodwill of governments."

Lula had said, "We have to help Bolivia, which is a poor country, we're not going to stop buying just because we have more gas, the role of a big country is to buy and help the poor, this is the politics of solidarity. Today we need Bolivian gas, but now we don't depend solely on Bolivian gas. I have faith that with the pre-sal (new deepwater reserves) that we will have much more gas and be self-sufficient." Lula made these remarks at the inauguration of South America's largest gas pipeline the GASDUC III.

The Minister of the Presidency, ├ôscar Coca, who was previous the Oil & Gas Minister also emphasized that Brazil must obey the contract without regard to, "sentiments of goodwill, affection or disaffection. One complies with legal contracts and this has nothing to do with the grades of sentiment o with the idea of giving or not giving us help. There is a contract that was signed some time ago and has a duration that will be obeyed."  Brazil signed the contract in question in the 1990s and it is valid until 2019.

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