LA PAZ Bolivia's leftist government said on Monday it had never enforced a decree nationalizing Pan American Energy's stake in a huge natural gas project and was in talks with the company over future investment plans.
Energy Minister Juan Jose Sosa said in January that the gas-rich country's state energy firm YPFB would take control of the Argentine company's 25 percent stake in the Caipipendi field because of inadequate investment.
However, Sosa said the decree was not published, meaning it had never taken effect.
"It wasn't promulgated because conversations are being held with the company," he told Reuters, adding that discussions were focused on general investment plans. "PAE continues to work in Caipipendi with the 25 percent set out in its contract."
Buenos Aires-based PAE, in which BP Plc (BP.L) holds a 60 percent stake, said in early May it had never been informed about the takeover.
Leftist president Evo Morales has tightened state control over Bolivia's natural gas reserves, the region's second-largest and a key energy source for Argentina and Brazil. This month, he seized control of a Spanish power firm.
Months into his first term in 2006, he shook foreign investors by announcing the nationalization of the energy sector. His reforms effectively gave the state control of reserves, letting foreign firms operate as service providers.
Caipipendi, located in southern Bolivia and operated by a consortium that also includes Spain's Repsol (REP.MC) and Britain's BG Group Plc BG.L, is the main source of natural gas sent to neighboring Argentina.
Output capacity at the field rose to 9 million cubic meters per day at the start of the month and should rise to 15 million cubic meters per day within two years on completion of a $1.5 billion investment plan aimed at boosting supplies to Argentina.
Natural gas is Bolivia's top export earner and the nation has a daily output capacity of up to 53 million cubic meters.
(Reporting by Carlos Alberto Quiroga; Writing by Helen Popper; editing by Matthew Lewis)