MercoPress. South Atlantic News Agency

Venezuela to help Bolivia boost natural gas production

Bolivia with the help of Venezuela unveiled a plan to increase the country's natural gas reserves to supply energy thirsty neighbors, Brazil and Argentina. Bolivia has 48.7 trillion cubic feet of proven and probable natural gas reserves, the second-largest deposits in South America after Venezuela.

Bolivia's government owned YPFB and Venezuela' PDVSA plan to explore in Bolivia's traditional natural gas producing region in the eastern lowlands as well as in La Paz, in the Andes region, announced President Evo Morales. "We hope to add more than 10 trillion cubic feet to the reserves in these 12 blocks ... there we're going to invest 888 million US dollars" said PDVSA Vice-President Eulogio del Pino, referring to the deal to explore for oil and natural gas. Until now YPFB did not have drilling equipment to look for natural gas but with the support from Venezuela's PDVSA, "we're going to set up 60 exploration rigs" said Morales. President Morales re-nationalized Bolivia's energy sector in 2006, (which had been privatized in 1996) forcing companies to grant a larger share of their profits and more control over their operations to the Bolivian state. Energy firms Petrobras from Brazil, Spain's Repsol and France's Total agreed to continue operating in the country under the rules outlined by Morales. The Venezuelan government backed Morales' energy nationalization with advisors and aid, and also signed a joint-venture deal to create oil and gas firm, Petroandina Gas, which 60% is owned by YPFB and 40% by PDVSA. Petroandina plans to invest 900 million US dollars in exploration and production in various areas of the country. Del Pino said PDVSA is not investing in Bolivia to "make business" but to help the country. Following the nationalization of the energy sector, investment in the industry collapsed and Bolivia desperately needs to extract more gas, --the country's main source of revenue--, to comply with exports to Brazil and particularly Argentina. Bolivia and Argentina signed last year a deal to nearly quadruple natural gas exports from the current daily maximum of 7.7 million cubic meters. Because of insufficient Argentine production and Bolivian supply, the Cristina Fernandez de Kirchner has been forced to purchase gas in the spot market and contract a vessel to process the liquid gas.