Bolivians approve gas industry nationalisation, more exports

President Carlos Mesa, swept into power in October 2003 after riots that ousted president Gonzalo Sanchez de Lozada, had staked his political future on the outcome of Sunday's referendum on Bolivia's gas industry.

All five measures on the ballot were approved, including a call for Bolivia to take back ownership of natural gas at the wellhead, according to early official returns from under two percent of precincts.

Under the measure foreign multinationals, including US, British, French and Spanish groups, would be paid for pumping oil, but would not own it.

Also approved: the repeal of a law granting foreign companies broad flexibility in exploiting Bolivia's gas, and a call to re-nationalize the former state energy concern Yacimientos Petroliferos Fiscales Bolivianos, privatized in 1997.

Mesa told a news conference he would submit a bill to the Bolivian Congress that would boost royalties for gas exports by foreign companies to 50 percent of their value from the current 18 percent.

"I am going to defend... the will of the Bolivian people," he said.

Mesa said earlier that he would honor prior contracts with the foreign gas companies. The victory at the polls however gives him a strong hand to renegotiate contracts with those firms.

The referendum was a crucial poll on the impoverished nation's natural gas industry and the political future of Mesa.

Hundreds of thousands who lined up to vote ignored major unions' calls to boycott the vote.

Voters also approved a proposal to use gas as a bargaining chip with Chile to buy back at least part of Bolivia's outlet to the sea.

Bolivia has had tense relations with Chile since this landlocked nation lost access to the Pacific Ocean during an 1879-1883 war.