Weekly Report - 17 May 2007

The most recent spat between Brazil's government-controlled energy company, Petrobras, and its Bolivian state-owned equivalent, YPFB, was finally resolved last week. Petrobras agreed to sell two refineries it owned in Bolivia to YPFB for considerably less than it valued them. The reason for this, according to the Brazilian press, was the direct interference of Brazil's President, Lula da Silva, in favour of the Bolivian government. Yet, despite Lula's goodwill, it is becoming increasingly apparent that his Bolivian counterpart, Evo Morales, is more intent on deepening his government's relations with Venezuela than with Brazil.