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Cablegate: Hydrocarbons Minister Is Censured

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DE RUEHLP #2295 2362103
ZNR UUUUU ZZH
P 242103Z AUG 06
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 0337
INFO RUEHAC/AMEMBASSY ASUNCION 6059
RUEHBO/AMEMBASSY BOGOTA 3378
RUEHBR/AMEMBASSY BRASILIA 7228
RUEHBU/AMEMBASSY BUENOS AIRES 4491
RUEHCV/AMEMBASSY CARACAS 1764
RUEHPE/AMEMBASSY LIMA 1787
RUEHMN/AMEMBASSY MONTEVIDEO 3976
RUEHQT/AMEMBASSY QUITO 4395
RUEHSG/AMEMBASSY SANTIAGO 8963
RHEHNSC/NSC WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS LA PAZ 002295

SIPDIS

SENSITIVE
SIPDIS

STATE FOR WHA/AND
TREASURY FOR SGOOCH
ENERGY FOR CDAY AND SLADISLAW

E.O. 12958: N/A
TAGS: ECON ENRG EPET PGOV BL
SUBJECT: HYDROCARBONS MINISTER IS CENSURED

REF: LA PAZ 2056

1. (U) The opposition majority in the Senate -- 13 Podemos
and 1 National Unity (UN) senators -- censured Hydrocarbons
Minister Andres Soliz Rada on August 23 for the state oil
company YPFB's alleged violations of Bolivian laws and
regulations (reftel). MAS senators protested by not
participating in the vote. Soliz' resignation was rejected
by President Morales, who reaffirmed Soliz' position and
called the opposition "anti-patriotic" for undermining
Bolivia's position in natural gas price negotiations and
stalling the hydrocarbons nationalization process.

2. (U) In anticipation of the censure, executive branch
sources announced on August 22 that Vice President Alvaro
Garcia Linera, not Soliz, would negotiate new hydrocarbons
contracts with private investors and new gas export prices
with Brazil, in addition to his duties as GOB interlocutor
for Spain, Brazil, Argentina, and the U.S. Garcia Linera
traveled to Brazil on August 23 to discuss gas prices with
President Lula da Silva.

3. (SBU) Comment: Soliz claims that the GOB will sign new
contracts with private hydrocarbons companies by the November
1 deadline, but that seems to be wishful thinking. The GOB
only began company audits in early August, which will likely
not be completed until after the contact migration deadline,
according to sector representatives. The opposition's
success in censuring Soliz is not only a sign that the GOB's
hydrocarbons nationalization is encountering difficulties,
but also reveals Morales' lack of absolute control over
Congress. We will be watching closely to see if this
incident causes Morales to rely more heavily on the
Constituent Assembly to execute his agenda. End comment.
GREENLEE

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