Bolivian President Evo Morales has signed a decree to nationalize the hydrocarbons sector, requiring that foreign-owned energy companies turn over their natural gas fields to the state immediately and sign new operating contracts within 180 days, according to media reports. "While the measures highlight the degree of uncertainty in the country and further constrain Bolivia's ability to attract investments, the low sovereign rating assigned to Bolivia already incorporates these factors," says Standard & Poor's sovereign credit analyst Sebastian Briozzo. "There is also no effect on the sovereign ratings on the Federative Republic of Brazil. Brazil imports 50% of its natural gas from Bolivia, but natural gas only accounts for 9% of energy needs," he adds. S&P expects no significant operational changes in the hydrocarbon sector in Bolivia, while the specifics of the recent decree are sorted out among the players, says S&P analyst Pablo Lutereau. "Long-term developments will be shaped by negotiations with current producers as well as by the final role to be played by state-owned company YPFB. Natural gas exports to Brazil and Argentina should not be affected during the next few months, but the nationalization process could well lead to an increase in prices." For more on this, see the June issue of Oil and Gas Investor. For a subscription, call 713-260-6441.