Bolivian Opposition Leaders Reject Gas Project Referendum

Bolivian opposition leaders have rejected President Gonzalo Sanchez de Lozada's last-ditch offer to hold a 'consultative referendum' in each of the country's nine departments to decide on a controversial gas export project.

The non-binding referendum would give some legality to the government's campaign to inform the public about the gas project and receive feedback, hydrocarbons ministry spokesperson Gelgar Olmos told BNamericas. "We are listening to the voice of the people," Sanchez de Lozada, accompanied by his political allies, said in a televised press conference on Wednesday. Through a referendum, "people would be able to express their opinions about the project in a more empirical and measurable way, so there would be more transparency," Olmos said.

The government is confident a referendum by department would likely result in a 5:4 margin in favor of the gas project, with the eastern departments including Santa Cruz and Tarija in favor of the project, she said.

However, opposition leaders say the time for dialogue has passed and only Sanchez de Lozada's resignation will restore order to capital city La Paz, which is still paralyzed after days of violent protests. The President is fast running out of options and could impose a state of martial law on Thursday night, Olmos said, adding martial law could last as long as 60-90 days. "How can you have dialogue with someone who is not speaking your language? You have to be tough," she said.

Perhaps even more worrying for oil and gas companies is the President's announcement Wednesday that the national hydrocarbons law would be modified to increase royalties for private oil companies operating in the country. "I'm afraid the government is violating the agreements and concessions with the oil companies that are investing in our country," Olmos said. By changing the rules of the game to appease opposition leaders the government is running the risk of scaring off oil and gas companies that have invested millions of dollars, she said. In particular, the move could jeopardize the hydrocarbons ministry's plans to launch tenders this month for a contract to install and operate 230,000 residential natural gas connections, and another contract to convert 80,000 vehicles to natural gas. "I doubt that any company will want to come here to invest in either of these large projects because we are not clear with the regulations," Olmos said, adding, "There's a lot of risk here."

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