LA PAZ, Bolivia – Bolivia and Brazil will form a commission to discuss the implementation of Bolivia's decision to nationalize its natural gas industry, a move that raised tensions between the South American neighbors.
Energy officials from the countries met Wednesday night to discuss Bolivia's decision last week to set gas prices and transfer majority control of all energy operations to its state energy company.
In a statement after the meeting, officials from both countries said the Brazilian government "reiterates its absolute respect for the sovereign decisions taken by the government and people of Bolivia" in the nationalization decree.
They also agreed to create a high-level commission and three sub-commissions to determine the operating conditions for Brazil's state-run petroleum company, Petrobras, in Bolivia within 180 days.
Bolivia has given foreign companies six months to negotiate their contracts or leave the country. Meanwhile, the government of President Evo Morales is seeking to raise the price of gas it sells to Brazil, which gets half of its natural gas supply from Bolivia.
Gas prices would be reviewed by the commission, which will include government and business officials from both countries.
On May 1, Morales ordered the takeover of his country's 53 foreign-owned natural gas installations, sending white-helmeted military police with semiautomatic rifles to guard the continent's second-largest gas reserves.
The takeover shocked Argentina and Brazil, Bolivia's biggest gas customers, raising concerns of future energy shortages and price hikes that might damage their economies.