LA PAZ - President Evo Morales on Monday issued a formal decree nationalizing Bolivia's oil and natural gas resources.
Bolivia has the second highest natural gas reserves in Latin America, behind Venezuela.
Morales said foreign energy companies would have to agree new contracts with the state run oil firm, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), within 180 days.
The left-wing president used a May Day labour holiday speech at San Alberto gas field in southern Bolivia to make the announcement.
Morales was elected in December on a pledge to take a bigger share of earnings from Bolivia's vast energy resources for South America's poorest country.
05/01/2006 17:00 GMT