MercoPress. South Atlantic News Agency

Petrobras and Bolivia reach a 50/50 gas agreement

The new Bolivian administration managed Thursday its first agreement with a foreign oil corporation following Brazil's Petrobras acceptance of a 50/50 share in the lucrative natural gas business.

Petrobras that currently holds 46% of Bolivia's proven gas reserves will associate with the re-launched Bolivian government oil company Yacimientos Petrolíferos Fiscales, YPFB, in all the production process, announced Hydrocarbons minister Andres Soliz.

Following two days talks with Petrobras president Jose Fernando de Freitas, Mr. Soliz said there was "a clear willingness" of becoming partners again in the "production process, from exploration, production, commercialization and transport".

"This dialogue will help us ensure better conditions and opportunities in the future both for Bolivia and YPFB and for Petrobras", stressed De Freitas.

Bolivian president Evo Morales on the campaign trail promised to improve exploitation conditions of the country's energy resources and his message has been "nationalization" but without confiscation or expropriation of multinational assets. This is a tricky statement since Petrobras, Spain's Repsol-YPF and French Total operate most of the country's natural gas reserves estimated in 48.7 trillion cubic feet, South America's second behind Venezuela, according to data from YPFB.

Morales administration is determined to obtain a better share of the potential 150 billion US dollars in proven gas reserves. Bolivia exports 30 million cubic metres per day to Brazil and 7.7 million to Argentina and sale prices are currently under review.

Mr. Soliz recalled that when Petrobras arrived in Bolivia in 1994 it had a 50/50 agreement with YPFB but with the privatization policies that followed, the Bolivian oil company lost ground to foreign corporations.

Bolivia's Hydrocarbons minister also held meetings this week with representatives from Repsol-YPF and Total Fina. Julio Gavito from Repsol-YPF the only representative to talk with the press simply said that "we wish to the energy partners with Bolivia".

Repsol-YPF has suspended planned investments in Bolivia.