MercoPress. South Atlantic News Agency

Bolivia admits gas demand growing faster than output

Bolivian vice president Alvaro Garcia Linera ratified Wednesday in Brasilia that his country guarantees the current supply volume of natural gas to Argentina and Brazil, although he cautioned about risks when demand is forecasted to increase next winter.

"We have before us critical periods, June, July and August and it's important that the three countries involved unify criteria and provisions for a regional energy policy which satisfies all of us", said Garcia Linera in an interview with the press in Brasilia at the beginning of a three day visit to discuss energy issues. Brazil consumes an estimated 30 million cubic meters of Bolivian natural gas per day and Argentina 7.7 million, which have dropped to 3 million in the first weeks of 2008. Bolivia's current daily production is estimated in 40 million cubic meters and is estimated to increase to 42 million, but energy analysts believe that domestic and foreign demand could reach 46 million cubic meters. Garcia Linera admitted there was a "gap" between the increase in demand and the new investments in the Bolivian gas industry which suffered the full impact of the nationalization process decreed by the administration of president Evo Morales in May 2006. Companies retracted from their original investment plans and only retook them after long discussions with Bolivian authorities. Brazil's government owned oil and gas corporation Petrobras was the most affected but President Lula da Silva applied the full weight of his country's diplomacy and Bolivia's economic dependency to South America's largest economy. "Bolivia has an abundant volume of reserves, has and will continue to be a reliable partner, but demand is clearly outpacing in speed our rate of investment which could make possible the additional provision". But in spite of the optimistic message Sao Paulo's leading daily, O Estado de S. Paulo reported on its web site that Garcia Linera will discuss with the Brazilian government the possibility of reducing the volume of natural gas exported to Brazil. Apparently Garcia Linera will also ask Petrobras to meet the commitment of investing a billion US dollars in the expansion of gas production in Bolivia. Garcia Linera was scheduled to meet Wednesday evening with President Lula da Silva and Petrobras CEO Jose Sergio Gabrielli. The presidents of the three countries could meet in coming days, possibly on Feb. 22, when Lula da Silva is expected to travel to Argentina to meet President Cristina Fernandez Kirchner.