Bolivian President Evo Morales has issued a decree nationalising Bolivia's vast natural gas industry and sent soldiers to occupy the country's gas fields.
Bolivian President, Mr Evo Morales
Mr Morales said foreign companies would be evicted from the country unless they give the Andean nation control over the entire chain of production.
The move fulfils an election promise by the leftist president to increase state control over Bolivia's natural resources, which he says have been "looted" by foreign companies.
Morales sent soldiers and engineers with Bolivia's state-owned oil company to installations and fields tapped by foreign companies including Britain's BG Group and BP, Brazil's Petroleo Brasileiro, and Texas-based Exxon Mobil.
The companies have six months to agree to new contracts or leave Bolivia, he said.
Supporters of Bolivian President Evo Morales listen to his speech in La Paz yesterday when he ordered the military to occupy Bolivia's natural gas fields on Monday
"The time has come, the awaited day, a historic day in which Bolivia retakes absolute control of our natural resources," said Mr Morales, Bolivia's first Indian president, who has forged close ties with Cuba's Fidel Castro and Venezuela' Hugo Chavez.
The president's announcement follows a trend by oil- and gas-rich Latin American nations to exact a larger share of profits from extraction of the fossil fuels.
The move comes as Ecuador argues with Washington over a new oil royalties law and less than a month after Mr Chavez ordered the seizure of oil fields from Total and Italy's Eni when the companies failed to comply with a government demand that operations be turned over to Venezuela's state oil company.