LA PAZ, Bolivia - Bolivians voted in large numbers Sunday in a referendum expected to allow the government to exert greater control over U.S. and other foreign gas companies and perhaps even nationalize the energy sector.

Complete and official results were not expected before Monday, but opinion polls ahead of Sunday's energy referendum suggested a majority of Bolivians support President Carlos Mesa's plan to repeal a 1996 hydrocarbons law that opened up Bolivia's vast and virtually untapped natural gas deposits for exploration and exploitation. The law permitted foreign energy companies to exploit Bolivia's natural-gas reserves.

Opinion polls and voter interviews suggested Mesa would win approval to step back from U.S.-backed economic policies that Bolivia has followed for a decade. Mesa has said he will honor prior contracts reached with U.S. and other foreign gas companies. But with the weight of a referendum behind him, Mesa will have leverage as he seeks "voluntary" renegotiation of gas concessions.

After the voting ended at 4 p.m., La Paz television stations unofficially projected that voters approved Mesa's plan to repeal the privatization law.

There are not many precedents for Bolivia's expected move against the gas sector, and Mesa insists he will not replicate Mexico's 1938 expropriation of U.S. oil companies or Chile's 1971 takeover of U.S.-owned copper mines.

But many voters Sunday seemed to think they were voting for an immediate seizure of foreign companies, as both political parties on the left and right are demanding.

"Nationalization is good. I think the state must run things," said Cristina Machaca, 32, a poor farmer in El Alto, the rough slums perched above the administrative capital of La Paz.

Energy industry executives, speaking on the condition of anonymity, feared radical groups might try to seize gas facilities in coming days and were ratcheting down production.

Bolivia sits atop at least 52.3 trillion cubic feet of certified but largely untouched natural gas reserves - about the size of reserves of much-larger Canada.

Bolivians, who have an average per capita annual income of just $953, remain divided on how to exploit the nation's vast, untapped wealth. In the gas-rich southeast, the referendum is viewed as a move on regional wealth. In the western highlands, home to most native Bolivians who are a majority and profoundly distrust foreign companies, there are demands for immediate expropriation without compensation.

With support from the United States, Bolivia opened up the gas sector to foreign investors in 1996, and more than $2 billion in foreign direct investment followed.

Mesa wants to change the rules of the game to ensure Bolivia has greater control and benefit. He proposes reforming the state oil company to have it, and not the private sector, direct development of Bolivia's gas sector. He also proposes raising royalties collected from gas companies to 50 percent from the current 18 percent.

Mesa told reporters that within days he will ask congress to revoke the hydrocarbons law which, at the time, attracted multinational giants such as Shell, British Petroleum, Amoco, Enron and others. He also will send congress new proposals for regulating the sector.

"I'm very optimistic," he said Sunday morning as he toured voting stations in the slums above La Paz, the scene of violence last year that brought down President Gonzalo Sanchez de Lozada and left at least 59 dead.

The violence was sparked by a plan to export natural gas to Southern California through Chile, which seized now-landlocked Bolivia's coastline in 1880. Mesa, a historian and ceremonial, party-less vice president, assumed the presidency by constitutional succession.

Rumors forced top military commanders to publicly declare last week that they were not plotting a coup to thwart the referendum. Bolivia has seen 191 changes of government in its 178 years as a republic. There was a small explosion in the city of Achacachi on Sunday morning, but voting was otherwise trouble-free.

The absence of violence and large voter turnout strengthen Mesa's hand in dealing with the powerful gas sector and an unruly congress that is largely discredited in the eyes of voters.

"The people are deciding and congress should hear us," said laborer Feliciano Catari, 45, who said he supports Mesa's plan requiring congressional approval. "If they don't listen, the people will take other measures."

"People have clearly supported democracy," said Marcelo Varnoux, a political analyst in La Paz. "It strengthens the president's position and gives him oxygen, more flexibility against the radicals, congress and the business powers."

Bolivia's president is traditionally selected by congressional vote, and voters Sunday seemed grateful to have a voice in national matters. They shouted "Bravo" and applauded as Mesa traveled the country by plane to inspect voting stations.

Waldo Alberracain, Bolivia's independent human rights ombudsman, warned in an interview that if congress failed to hear the voice of voters it could spell trouble.

"The absence of national dialogue, if not restored, could dismember the country," he said.

© Copyright 2004 Knight-Ridder

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