S.American leaders agree to negotiate gas prices

PUERTO IGUAZU, Argentina (Reuters) - Four South American presidents agreed on Thursday to negotiate prices of Bolivian natural gas and dismissed the notion that Bolivia's nationalization of its energy industry had caused a rift.

The leaders of Bolivia, Brazil, Argentina and Venezuela said it was important to keep the fuel flowing despite the problems caused by the takeover, which Bolivian President Evo Morales announced at a workers' rally on Monday as troops deployed in gas fields and company offices.

Brazil's state oil company Petrobras is the largest investor in Bolivian energy with $1.5 billion in investments and Brazil and Argentina are Bolivia's top gas markets.

"In this meeting, any concerns the presidents may have had have been dispelled," Morales told a news conference at the end of the three-hour emergency summit in this Argentine tourist town.

The leaders came up with a document spelling out the way forward, which essentially was to keep talking.

"In terms of price, the document is absolutely clear," Argentine President Nestor Kirchner said. "It says that bilateral meetings will be the means to resolve price discussion between countries."

Morales' takeover decree gave government energy company YPFB control over production and the state a 51 percent stake in several foreign companies operating in one of the poorest countries in the Americas.

The companies, which he accuses of exploiting the country's resources to little benefit for ordinary Bolivians, have six months to sign new contracts or risk expulsion.

Emerging from the meeting, Morales, Kirchner, Brazil's Luiz Inacio Lula da Silva and Venezuela's Hugo Chavez were keen to stress that solidarity was intact despite talk of a rift between Bolivia and Venezuela on one hand and Brazil and Argentina on the other.

The four men, who are well acquainted, represent two sides of the leftist trend in Latin America. Lula and Kirchner are centrists while Chavez and Morales lean toward socialism.

BOLIVIA, VENEZUELA ALLIED Continued ...

© Reuters 2006. All Rights Reserved.