Bloomberg Spins the Bolivia Gas Story: A Good Example of Bad Journalism

Readers:

The Democracy Center has worked for a long time with many foreign journalists seeking to provide accurate coverage of events in Bolivia. The vast majority of them do an excellent and dedicated job. Anyone writing about Bolivia, including The Democracy Center, can also get a story wrong from time to time. But an occasional error is not the same as an ongoing, repetitive misstatement of the facts. That is something else.

Below is a posting by one of our gas and oil researchers, Gretchen Gordon, noting the ongoing effort by Bloomberg News to create a false public image that the Bolivian government has “seized the assets” of foreign energy companies through its May 1 “nationalization” decree. Bloomberg’s rhetoric makes great spin. It’s just happens to be false. Gretchen explains below.

We are sending this posting to the writers at Bloomberg inviting them to write a response that we will post. We look forward to their documentation of exactly which company assets were seized and when.

[A note: The Democracy Center’s detailed briefing papers on the gas decree and on media coverage of it can be found here.]

Jim Shultz

Bloomberg Spins the Bolivia Gas Story: A Good Example of Bad Journalism

Bloomberg news service posted a brief article yesterday on problems facing the Bolivian government’s oil and gas “nationalization” efforts. The article by Guillermo Parra-Bernal “Bolivia Suspends Nationalization of Oil Fields, Razon Reports” references a report in the La Paz-based newspaper La Razon which also ran yesterday.

While the subject of both articles is the same, the Bloomberg article paints an entirely different picture of Bolivia’s oil and gas nationalization.

Here’s La Razon’s reporting: "...the participation of [Bolivia’s state oil company] in the entire chain of production of the [oil and gas] sector 'is temporarily suspended, due to the lack of economic resources.'"

Now here’s what Bloomberg says la Razon says: "Bolivia temporarily suspended a plan to seize oil and natural gas fields controlled by foreign companies, saying the state oil company lacks the necessary funds to execute the process, La Razon reported."

Somehow in translation between La Razon and Bloomberg, Bolivia’s state company “participating” in the chain of production becomes the government “seizing” oilfields and assets.

The La Razon article, in fact, is devoted to laying out in detail just how little has changed since Bolivia’s “nationalization” decree. The Bloomberg article, however, goes on to tell how "Bolivian President Evo Morales seized the assets of Petrobras and other international oil companies on May 1."

While the “nationalization” involved a lot of flag-waving and fanfare, it didn’t involve any seizures - neither of assets nor refineries nor fields. Foreign companies are being forced to renegotiate their contracts, yes. Some are being forced to pay higher taxes. In the case of Petrobras, it is being forced to sell the government back a majority share in the two refineries it bought in a sweetheart deal during the dismantling of the state company in the mid-nineties. But it hasn’t yet because the government and Petrobras can’t agree on the price.

That is not seizure of assets or oilfields. Petrobras, Repsol, BP, Total and all the other oil and gas companies continue to operate as before, making both decisions and profits, while they laboriously haggle with the government over prices and contract terms. For more information please see The Democracy Center's analysis here.

Getting your facts wrong is one thing. But the fact that the Bloomberg article completely changed what is clearly and accurately explained in the La Razon article points to something more intentional.

In fact, a look at Bloomberg’s coverage over the last few weeks reveals that the “seizing assets and oilfields” line is not limited to this one article, but rather appears to be the Bloomberg agency line regardless of which journalist’s name is attached.

July 12th: “On May 1, Bolivian President Evo Morales seized the assets for foreign oil companies in the country.” (“Petrobras Won't Change Bolivia Gas Contract, CEO Says (Update1)” by Jeb Blount and Ben Miller)

August 3rd: “Bolivia's government on May 1 seized Total's stakes in two natural gas fields…”(“Total Second-Quarter Profit Rises 15 Percent on High Oil Prices” by Tom Cahill)

August 3rd: “Oil and gas production fell because of shutdowns in Angola and the North Sea, violence in Nigeria, and government seizures of fields in Bolivia and Venezuela.” (“European Stocks Fall Before ECB Decision; Total, Unilever Drop” by Sarah Thompson)

August 9th: “The decision comes after President Evo Morales seized oil and gas fields May 1 to force companies to renegotiate contracts to pay higher royalties.” (“Bolivia Shelves $2.3 Billion Iron Ore Mine Contract (Update2)” by Alex Emery)

The job of a news agency is to report the facts- not to propagate a false version of reality. I invite Bloomberg’s news staff to provide an example of any gas fields in Bolivia that have been seized by the current government. Without such, Bloomberg’s readers deserve more honest reporting.

by Gretchen Gordon