Bolivia's Morales moves to control gas industry

Bolivian President Evo Morales has taken steps to control the South American country's natural gas business.

Bolivian President Evo Morales moved on Monday to extend government control over the country's natural gas industry.

Speaking at a gas field in San Alberto in the south of the desperately poor country, Morales said foreign energy companies must now sell their production through a state company.

The foreign companies that dominate the industry must sign contracts giving the government-owned oil company, Yacimientos Petroliferos Fiscales Bolivianos, control over production.

Multinational companies will only keep 18 per cent of their production, Morales said.

He ordered soldiers to take over natural gas fields and 53 installations were occupied, a senior government official said.

"The time has come, the awaited day, a historic day in which Bolivia retakes absolute control of our natural resources," Morales said.

Any company that refuses to follow the new rules must leave Bolivia in six months, he said.

Morales campaigned on the plan to bring the gas reserves – the second largest on the continent – under government control, and repeated the promise at his inauguration in January.

But he has recognized that Bolivia cannot completely take over the industry because it cannot run the business without help.

Foreign companies, from Britain, Spain, Brazil and France, dominate the Bolivian industry.

Morales alarmed the wealthy, largely white elite in Bolivia and angered Washington with his energy plans.

But the nationalization promise won him widespread support in a country where about half the population is considered to live in extreme poverty.