Bilivia the country not the state

Bolivia Senate Votes No-Confidence in Energy Minister (Update1)

By [bn:PRSN=1] Alex Emery []

June 26 (Bloomberg) -- Bolivia's Senate gave a no-confidence vote to Energy Minister Carlos Villegas for failing to meet natural-gas supply contracts to neighboring Argentina.

The Senate voted against Villegas by 13 to 0 after President Evo Morales's Movement Toward Socialism party walked out of the debate, state newswire ABI reported today. The Senate also voted for the ouster of Villegas' predecessor Andres Soliz in 2006.

``This is a political measure taken by the opposition against the Bolivian people, not against a government official,'' Villegas told reporters in a broadcast on La Paz-based Radio Panamericana.

Morales ratified Villegas in his post today, ABI said.

Bolivia produced 40 million cubic meters a day of natural gas the first half of this year. It fell short of a 55.7-million cubic meter commitment that includes 7.7 million cubic meters to Argentina, according to the Bolivian Hydrocarbon Chamber.

``The changes in the hydrocarbon industry over the past three years have without a doubt created instability and uncertainty,'' the group, which represents 100 companies, said in a statement on its Web site.

Investment in Bolivia's oil and gas industry fell to $149 million last year from $605 million a decade ago after Morales seized fields, refineries and pipelines from companies including Repsol YPF and Petroleo Brasileiro SA to boost control of natural resources. Ecuador and Venezuela have pushed through similar measures.

``These countries have not shown signs of clear rules,'' Jorge Ganoza Durant, president of silver producer Fortuna Silver Mines Inc., said today in an interview in Lima. ``Changing rules all the time doesn't favor long-term investment.''

Natural gas for August delivery rose 38.2 cents, or 3 percent, to $13.248 per million British thermal units on the New York Mercantile Exchange. Futures have gained 68 percent this year.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

Last Updated: June 26, 2008 19:26 EDT