Santa Cruz Reports Sale of 200,000 Liters of Ethanol 92 In Four Days

(Energy Analytics Institute, Jared Yamin, 5.Nov.2018) — Commercialization of Bolivia’s new ‘Super Ethanol 92’ gasoline reached nearly 200,000 liters in the first four days after it was introduced in the department of Santa Cruz, reported the daily newspaper La Razón, citing National Hydrocarbons Agency (ANH) Director Gary Medrano.

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Related Stories

Bolivia To Kick Off Sale Of Super Ethanol 92 On Nov. 1

 

YPFB Makes Initial Shipment Of Nitrogen Fertilizer To Brazil

(Energy Analytics Institute, Aaron Simonsky and Ian Silverman, 2.Nov.2018) — YPFB made its initial shipment of nitrogen fertilizer from Puerto Quijarro, in late October, to Baurú, a city located in the state of Sao Paulo in Brazil.

“The importance of this milestone lies in the speed with which YPFB’s urea was placed in new markets,” announced Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) President Óscar Barriga in an official company statement.

“New Brazilian states beyond Mato Grosso and Mato Grosso do Sul, where the YPFB urea was initially marketed, are also demanding Bolivian urea,” added Barriga.

In addition to Sao Paulo, the states in Brazil where Bolivia’s granulated urea is being commercialized include: Mato Groso, Mato Grosso do Sul, Sao Paulo, Minas Gerais, Rondonopolis, Goias and Paraná.

To date in 2018, Bolivia has exported a total of 177,000 tons of granulated urea, equivalent to more than $50 million in revenues. Markets that currently consume Bolivian urea include: Brazil (65% of the 177,000 tons exported), Argentina (26%), Paraguay (8%) and Uruguay (1%), according to the YPFB statement.

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YPFB Transporte Controls Gas Leak In Villa Montes

(Energy Analytics Institute, Jared Yamin, 1.Nov.2018) — A new gas leak along a pipeline in Bolivia was reported in Villa Montes in the department of Tarija. The leak occurred at 1:50 am on Nov.1 in the Puesto Uno sector of Villa Montes.

“Personnel from YPFB [Transporte] arrived on the scene almost simultaneously and closed the valves that were necessary to prevent the gas from flowing through that pipeline,” reported the daily newspaper La Razón, citing Villa Montes Search and Rescue Group Manager Enrique Sánchez.

No injuries were reported nor any material damages.

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Bolivia To Kick Off Sale Of Super Ethanol 92 On Nov. 1

(Energy Analytics Institute, Jared Yamin, 30.Oct.2018) — Bolivia announced it expects to initiate sale of its new Super Ethanol 92 fuel on November 1, 2018. Santa Cruz will initiate the sales process from its 30 service stations.

By year end 2018, an estimated 300 service stations across Bolivia will sell the new fuel. By year end 2019, it is estimated that approximately 700 service stations will be geared up to sell the new fuel, reported the daily newspaper La Razón.

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Bolivia Discusses Methods to Calculate Hydrocarbon Royalties

(Energy Analytics Institute, Jared Yamin, 27.Oct.2018) — Bolivia’s Hydrocarbon Ministry held discussions October 24-26, 2018 to analyze a methodology for calculating hydrocarbon royalties in the departments of Cochabamba, Chuquisaca, Santa Cruz and Tarija, reported the daily newspaper La Razón, citing Exploration and Exploitation Hydrocarbons Vice Minister Carlos Torrico.

No further details were revealed by the daily.

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Argentina Makes Small $2 Million Payment For Bolivian Gas

(Energy Analytics Institute, Aaron Simonsky, 27.Oct.2018) — Bolivia’s Central Bank (BCB by its Spanish acronym) announced Argentina made a “small payment” of $2 million related to a debt with Bolivia for the purchase of natural gas.

The debt accumulated with Bolivia by Argentine’s state oil company Integración Energética Argentina SA (IEASA), formerly known as Energía Argentina SA (Enarsa), prior to the payment was $454.63 million and comprised of the following: $265 million for gas imports for July and August, $132 million for an invoice from October, $50.16 million for interest related to late payments during 2008-2017, and another $5.47 million for the same concept, but corresponding to 2018, reported the daily newspaper La Razón.

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Argentina Buys An Average 16.2 MMcm/d From Bolivia in Sep.

(Energy Analytics Institute, Aaron Simonsky, 26.Oct.2018) — Argentina purchased an average 16.2 million cubic meters per day (MMcm/d) of natural gas from Bolivia in September 2018.

However, the volumes are nearly 5 MMcm/d below contractual agreements, reported the daily newspaper La Razón.

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Bolivian, Argentine Officials to Discuss Gas Issues in La Paz

(Energy Analytics Institute, Jared Yamin, 21.Oct.2018) — Officials from Argentina and Bolivia will meet in La Paz on Oct. 22 to discuss issues related to the purchase and sale of natural gas and overdue payments.

A mission of authorities from Integración Energética Argentina S.A. (IEASA, formerly ENARSA) will meet with their Bolivian counterparts to explore solutions to accumulated unpaid debts related to the purchase of Bolivian natural gas, reported the daily newspaper La Razón.

Argentina owed an estimated $265 million to Bolivia for the purchase of natural gas from its neighbor. This figure is expected to rise to $398.5 million, including last month’s purchases of $133.5 million, reported the daily.

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Argentina To Reduce Bolivian Gas Imports To Minimum

(Energy Analytics Institute, Jared Yamin, 20.Oct.2018) — Argentina will likely reduce its demand for Bolivian natural gas imports to a minimum, says an oil analyst.

Argentina, which continues to boost production of its unconventional shale gas resources located in the Vaca Muerta formation in the Neuquen region, will likely reduce its demand for natural gas imports from Bolivia to a minimum 23.5 million cubic meters per day (MMcm/d), reported the daily newspaper El Diario, citing Jubilee Foundation Oil Analyst Raul Velásquez.

The analyst made the comments after declarations from Argentina’s Energy Secretary Javier Iguacel that revealed that in two years the country would no longer need to import gas from Bolivia.

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YPFB Reports Explosion Along Santa Cruz-Yacuiba Gas Pipeline

(Energy Analytics Institute, Jared Yamin, 19.Oct.2018) — An explosion along a portion of a pipeline that transports natural gas to Argentina injured a total of five people.

Bolivia’s state oil entity Yacimientos Petrolíferos Fiscales (YPFB) has initiated an investigation to establish the causes and origin of the incident, reported the daily La Razón.

“This event has been sudden and unexpected. We don’t know the causes … however it is being investigated,” reported the daily, citing YPFB National Vice President of Operations Gonzalo Saavedra in an interview with Cadena A.

At noon on October 19, an explosion occurred along a portion of GSCY (Santa Cruz – Yacuiba) gas pipeline in the city of Villa Montes, in the department of Tarija. The explosion was controlled in a couple of hours.

All the injured were transferred by helicopter from Villa Montes to a medical center in Santa Cruz de la Sierra due to the severity of the burns. Among the victims there are two children, the daily reported.

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Bolivian Refineries Cover 71.4% Of Domestic Demand for Special Gasoline

(Energy Analytics Institute, Jared Yamin, 19.Oct.2018) — Production of special gasolines from Bolivia’s three existing refineries isn’t sufficient to cover the country’s demand.

Domestic supply only covers 71.4% of domestic market demand, down 2% compared to 2017, and down 5% between January and May of the current year, reported the daily El Diario.

In May 2018, the Jubilee Foundation reported the Gualberto Villarroel, Guillermo Elder Bell and Río Negro refineries produced a combined 3,570,000 liters per day of gasoline versus demand of 5,000,000.

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YPFB To Build Five Satellite Regasification Stations

(Energy Analytics Institute, Jared Yamin, 18.Oct.2018) — Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) plans to build five satellite regasification stations (ESR) that will benefit 12 populations of La Paz, Potosí, Chuquisaca and Santa Cruz.

YPFB will move forward with the five ESR projects, which will benefit 12 communities located in La Paz, Potosí, Chuquisaca and Santa Cruz, announced Bolivia’s state oil entity in an official statement on its website.

These projects are in addition to 27 ESRs that already operate across the country, YPFB said, citing Executive President Oscar Barriga Arteaga.

A YPFB LNG Plant, the first of its kind in Bolivia, is located in Rio Grande, Santa Cruz and distributes gas to ESRs through cryogenic tanks. The plant’s production capacity is 210 metric tons per day (TMD) of liquefied natural gas. The ESRs receive natural gas supply for domestic, industrial, commercial and vehicular natural gas consumption, YPFB said.

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Tarija Department Has Accumulated Losses of $100 Mln Since 2012

(Energy Analytics Institute, Jared Yamin, 18.Oct.2018) — Bolivia’s Tarija department has lost about $100 million in the last eight years.

The figure corresponds to revenues the department has lost between 2012 and October 2018 from not distributing resources from the Margarita-Huacaya field, which the region shares with Chuquisaca, reported the daily newspaper La Razón, citing United to Renew (Unite by its Spanish acronym) Councilman Alfonso Lema.

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Argentina Looks to Cease Bolivian Gas Imports By 2020

(Energy Analytics Institute, Jared Yamin, 16.Oct.2018) — With its own gas projects to develop, Argentina is seeking to reduce imports of natural gas and by 2020 it expects to stop buying it completely from Bolivia.

In the run up period, Argentina looks to reduce Bolivian gas imports by 20% in 2018, by 50% in 2019, and by 2020 they would no longer be necessary, reported Bolivian media La Razon, citing Argentina’s Energy Secretary Javier Iguacel.

The plan announced by the Argentine official is based on three current massive developments and four other promised in the Vaca Muerta formation, which spans four provinces: Neuquén, Río Negro, La Pampa and Mendoza.

Currently, the Neuquén Basin produces almost 70 million cubic meters of gas per day (MMcm/d) and Argentina expects to boost production in the basin to nearly 90 MMcm/d with additional investments.

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Echo Energy, YPFB Sign Technical Evaluation Agreement For Rio Salado Block

(Echo Energy plc, 15.Oct.2018) — Echo Energy plc signed on 12 October 2018 a Technical Evaluation Agreement (TEA) for the Rio Salado Block, onshore Bolivia, directly with YPFB (Yacimientos Petrolíferos Fiscales Bolivianos).

The agreement was signed by Andres Brockman (Echo Regional Representative) and Oscar Barriga (President of YPFB) in the presence of James Thornton (Her Majesty’s Ambassador to the Plurinational State of Bolivia) in Santa Cruz de la Sierra, Bolivia.

The work programme will include the interpretation and integration of three 2D seismic lines, acquired in 2015 / 2016 and only recently made available, which transect part of the block. These will be important in further refining the definition of a deep structure mapped across the Rio Salado and Huayco blocks. Management estimates for Original Gas In Place are 1.75 TCF (mean) for the whole structure, across both blocks.

At the end of the TEA period the company will have the right to negotiate contract terms with YPFB for the Rio Salado licence should it elect to do so.

Huayco Block

Echo also announced it is continuing the Joint Evaluation Agreement with Pluspetrol over the Huayco block. During the past 12 months Echo completed a full reprocessing of a 250 km2 cube of 3D data across Huayco and part of Rio Salado. This was integrated into a 3D structural model, which will form the basis of the ongoing work with Pluspetrol.

“We are delighted to have signed the TEA with YPFB for the Rio Salado block, as well as extended our agreement with Pluspetrol regarding Huayco, given the potential we see running across both blocks. Much technical work has been done and we are pleased that by extending our agreement with Pluspetrol we have given ourselves time to further analyse what we still believe to be exciting potential as we evaluate newly available industry data across the licence areas,” said Echo Energy plc CEO Fiona MacAulay.

The acquisition of an interest by Echo in Rio Salado remains contingent on final commercial terms being agreed. Accordingly, the company does not have an interest or the right to acquire any interest at this stage.

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Echo Energy Continues To Progress Argentina Wells, Signs New Deal In Bolivia

(Proactive Investors, 15.Oct.2018) — Echo Energy Plc told investors that it has confirmed that its third Argentinian well will be suitable for mechanical stimulation, and, it will now move on to the next stage in operations.

The company, in a statement, updated on the EMS-1001 well at the Fraccion C – which was drilled into the Jurassic Tobifera formation, previously described as “material and transformational”.

Latest operations saw the company perforate and perform inflow tests on two intervals, to ensure there’s no mobile formation water presence ahead of rigless mechanical stimulation work.

The drill rig has now been demobilised, meanwhile, design and planning are being finalised for the stimulation work. The company expects to start the stimulation of both the EMS-1001 and ELM-1004 wells before the end of this year.

Separately, Echo also announced that it has signed a new agreement in Bolivia for the onshore Rio Salado Block.

A technical evaluation agreement (TEA) was signed between Echo Energy Plc and state-owned oil and gas firm YPFB (Yacimientos Petrolíferos Fiscales Bolivianos).

It details the work commitments for Echo to undertake at Rio Salado, including the interpretation and integration of 2D seismic data with a view to better understand deep structures which have been mapped as crossing between the Rio Salado and Huayco blocks.

Echo highlighted that it has estimated the whole structure at around 1.75 trillion cubic feet of gas in place.

At the end of the TEA period, Echo will have the right to negotiate a longer-term contract with YPFB.

The company also said that it will continue to advance its joint venture at Huayco where, in the past year, it has completed a full reprocessing of 250 square kilometres of 3D seismic data.

‘We are delighted to have signed the TEA with YPFB for the Rio Salado block, as well as extended our agreement with Pluspetrol regarding Huayco, given the potential we see running across both blocks,” said Fiona MacAulay, Echo chief executive.

“Much technical work has been done and we are pleased that by extending our agreement with Pluspetrol we have given ourselves time to further analyse what we still believe to be exciting potential as we evaluate newly available industry data across the licence areas.”

Echo noted that it does not yet hold an interest in Rio Salado, and any acquisition of a stake in the exploration venture remains contingent upon agreeing to commercial terms in the future.

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Bolivia’s Oil Revenue To Reach $2.2 Billion

(Xinhua, 14.Oct.2018) — Bolivia’s oil revenue this year is estimated to reach 2.2 billion U.S. dollars as it “will be able to fulfill” contracts with its southern American partners, Minister of Hydrocarbons and Energy Luis Alberto Sanchez said Saturday.

“The income to the country is guaranteed,” Sanchez said. “We should feel certain about the expected income from the export of gas because we will be able to fulfill the contracts with Argentina until 2026 and with Brazil for the remaining volume to be delivered and an extension of the contract until 2024.”

Bolivia is negotiating an increase in gas sales in western Brazil, the minister said, adding that it is negotiating with new markets that will generate greater benefits through direct sale of natural gas to several Brazilian states.

“This is good for us because it opens up the Brazilian market. The country has all the right conditions to take on these new contracts and at better prices,” he said.

Bolivia is working on the export of liquefied natural gas (LNG) by way of the Peruvian port of Ilo on the Pacific coast, the government confirmed Saturday.

The deal with Paraguay is under negotiation to supply gas to the Chaco region, a sparsely inhabited area, both at the household level and for the generation of electricity, according to Humberto Salinas, vice minister of Industrialization, Commercialization, Transportation and Hydrocarbon Storage.

“We will be exporting to Paraguay and we will end up opening new overseas markets with the liquified natural gas,” Salinas said.

Bolivia is a major exporter of LNG in South America, with 99 percent of the exports going to Paraguay and Peru, the vice minister said, adding that it hopes to add Uruguay, Argentina and Brazil to the list of export destinations.

Between 1985 and 2005, Bolivia earned 4.587 billion dollars in oil revenue, at an average of 225 million dollars a year. From 2006 to 2015, the total reached 31.573 billion dollars, with a yearly peak of 5.489 billion dollars in 2014.

Bolivia’s GDP growth declined from a peak since the 1970s of 6.8 percent in 2013 to an estimated 4.2 percent in 2017 due to a less favorable international environment and a temporary reduction in the external gas demand, according to the World Bank.

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Air BP Nationalization In Bolivia “Technically” Not Finalized

(Energy Analytics Institute, Jared Yamin, 14.Oct.2018) — Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez, acknowledged that nationalization of Air BP, a subsidiary of British Petroleum, in charge of marketing jet fuel and airplane gasoline, wasn’t completed due to lawsuit filed by Aerosur.

“We haven’t finalized the transfer of shares in Air BP to YPFB due to a contingency problem resulting from a lawsuit brought about by Aerosur relating to Air BP,” reported the daily El Diario, citing Sánchez. “As long as it’s not resolved, we can’t move forward,” he said.

On May 1, 2009, Bolivia’s President Evo Morales announced nationalization of Air BP through Supreme Decree 111, and ordered the Bolivian Armed Forces to intervene in the company.

Although the shares of Air BP haven’t officially been transferred to the Bolivian state, Sanchez assured the nationalization decree related to the company had been fulfilled.

“YPFB has control of the company,” he affirmed.

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Bolivia’s Gas Lower than LNG, Vaca Muerta Shale: Sánchez Says

(Energy Analytics Institute, Jared Yamin, 12.Oct.2018) — Bolivian natural gas is more competitive than liquefied natural gas (LNG) and gas from Argentina’s Vaca Muerta shale formation, announced Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez.

The minister stressed that Bolivian gas, priced at $7/MMbtu, was much cheaper than Argentine gas.

Argentina’s LNG imports cost around $10.50/MMbtu, while the production cost in Vaca Muerta is around $7.50/MMbtu, so “the most competitive gas for the Argentine market is undoubtedly Bolivian gas,” reported the daily newspaper El Diario, citing Sánchez.

Sánchez warned that if Argentina decides to pay a lower price (reduces the price), it must pay the Take or Pay (contract modality), which establishes a fine be paid for any energy not withdrawn, plus interest.

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Bolivia Gas Exports To Argentina To-date Averaging 18 MMcm/d

(Energy Analytics Institute, Jared Yamin, 11.Oct.2018) — Bolivian natural gas exports shipped by YPFB to Argentina to-date have averaged 18 million cubic meters per day (MMcm/d).

These volumes are below the minimum 20.9 MMcm/d guaranteed by the state oil company and a maximum 24.6 MMcm/d requested by Argentina, reported the daily newspaper El Diario.

Despite the shortfalls, Bolivia’s Hydrocarbon Minister Luis Alberto Sanchez reiterated that Bolivia had sufficient natural gas reserves to fulfill contractually agreements with Argentina until 2026, when the contract between the two countries expires.

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Bolivian, German Companies Form JV Entity to Produce Lithium-ion Batteries

(Energy Analytics Institute, Ian Silverman, 4.Oct.2018) — Yacimientos del Litio Bolivianos (YLB), a Bolivian company, and ACI Systems of Germany signed a deal for the constitution of a joint venture entity between both companies.

The entity will be oriented to the industrialization and production of large-scale lithium-ion batteries using resources contained in Salar de Uyuni, the world’s longest continuous salt desert.

The entity, in the first instance, will install a Lithium Hydroxide Plant in Uyuni to produce cathodes and, later, lithium-ion batteries, in about three years, reported the daily Bolivian newspaper La Razón, citing comments from Bolivia’s Vice President Álvaro García Linera made during a speech at a special ceremony in La Paz.

YLB will hold a 51% interest in the entity, while ACI Systemes will hold the remaining 49%, according to García.

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See related story:

Bolivia Seeks Investors to Power Up Lagging Lithium Output

Transparency in Bolivian Hydrocarbon Information Needed, Jubilee Foundation Says

(Energy Analytics Institute, Ian Silverman, 3.Oct.2018) — Transparency in information is necessary in order for Bolivia and producing departments of the small Andean country to understand the full details related to natural gas and crude oil reserves by department and field, announced the Jubilee Foundation.

Such important and timely information will allow experts and the country as a whole the necessary time to evaluate the data as it relates to resource management, reported the daily El Diario, citing the foundation.

The foundation was referring to a recent hydrocarbon reported released by the Canadian consortium Sproule International Limited.

In the report, the Sproule revealed Bolivia had 10.7 trillion cubic feet (Tcf) of proved gas reserves, 12.5 Tcf of proved plus probable reserves, and 14.7 Tcf of proved, probable plus possible reserves.

“The decrease in probable and possible reserves is a reflection of insufficient exploratory activity in recent years, despite the fact the government has issued six decrees between 2007-2017, that resulted in the awarding of new areas for the exploration and exploitation of hydrocarbons in favor of state oil company YPFB,” the daily reported, citing the report.

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Bolivia’s Economic Growth Expected to Exceed 4.5%: IMF

(Energy Analytics Institute, Aaron Simonsky, 3.Oct.2018) — Details of the International Monetary Fund (IMF) estimates were reported by the daily newspaper La Razón, citing a speech made by Bolivia’s President Evo Morales in the capital city La Paz.

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Bolivia’s ENDE Suspends Rositas Hydroelectric Project

(Energy Analytics Institute, Ian Silverman, 3.Oct.2018) — Bolivia’s National Electricity Company (ENDE) has temporarily suspended the Rositas hydroelectric project.

Delegates from affected communities and two elected authorities from Vallegrande said there have been failures related to the project since the beginning, reported Bolivia’s daily newspaper La Razón.

Work related to the project — which consists of construction of a dam, a power plant with an installed capacity of 600 megawatts with average annual energy generation on the order of 3,000 gigawatts — was paralyzed during the environmental impact process, according to the daily.

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Jubilee Foundation Says Bolivian Gas Output Below Projections

(Energy Analytics Institute, Ian Silverman, 3.Oct.2018) — The Jubilee Foundation announced Bolivia’s production of natural gas is short of projections outlined in the country’s Integral Hydrocarbon Development Plan 2016-2020 by an estimated 13.8 million cubic meters day (MMmc/d).

According to the foundation, the small land-locked country should be producing 67.8 MMmc/d, but in reality production is only 54 MMmc/d, representing a shortfall of 25%, reported Bolivia’s daily newspaper El Diario.

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Argentina Still Owes Bolivia $250 Mln For Gas Imports

(Energy Analytics Institute, Jared Yamin, 27.Sep.2018) — Bolivia’s government plans to meet soon with Argentine authorities in the Casa Rosada to again address the issue of late payments.

“They still owe us two bills, and in the coming weeks we are going to discuss with the government how to regularize the fundamental payment issues,” reported the newspaper La Razón, citing Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez.

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Petrobras Bolivia Spuds Deep Caranda X1005 Well in Santa Cruz

(Energy Analytics Institute, Jared Yamin, 27.Sep.2018) —The well was spud in the Caranda Field inthe  presence of Bolivia’s President Evo Morales.

The field is located in the Ichilo province of the department of Santa Cruz and is operated by Petrobras Bolivia.

The Deep Caranda exploration well (Car-X1005) will require an investment of $47 million and has potential to produce 35 million cubic feet per day (MMcf/d) of natural gas, reported the daily newspaper La Razón.

“If gas is confirmed, additional investments of $184 million could be made to drill two other wells in the area,” reported the daily, citing Morales.

With drilling of the Car-X1005 well the company aims to certify a potential resource of approximately 0.6 trillion cubic feet (Tcf) of natural gas, which could translate into revenues of $600 million over the next 20 years, reported the daily.

Additionally, the exploratory project, if successful, could lead to the revitalization of a mature field (the Colpa Caranda area), and could generate a new perspective regarding developments, investments, and other activities aimed at boosting gas production.

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Bolivia to Launch Super Ethanol 92 in October 2018

(Energy Analytics Institute, Jared Yamin, 26.Sep.2018) — Bolivia is planning to launch a new ethanol: Super Ethanol 92.

“Today, a decree was approved authorizing the mixture of ethanol with base gasoline up to 12%,” said Sanchez.

The Super Ethanol 92 that the Bolivian government plans to launch on October 10 will have up to 12% alcohol, reported the daily newspaper La Razón, citing Bolivia’s Hydrocarbon Minister Luis Alberto Sanchez.

Determination of the percentage of mixture was revealed in a decree approved by a ministerial cabinet, said the official. He added that his office is still ‘fine-tuning’ the final price.

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Bolivia’s Incahuasi Field Producing 8 MMcm/d of Natural Gas

(Energy Analytics Institute, Ian Silverman, 21.Sep.2018) — Bolivia’s President Evo Morales says natural gas production at the Incahuasi field, discovered in 2004, is currently eight million cubic meters per day (MMcm/d).

Production at the field is expected to increase to 11 MMcm/d over the short-term with additional investments and then to 20 MMcm/d with further investments over the medium-to-long-term, reported the Bolivian daily newspaper La Razón, citing the official.

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Bolivia’s Morales Says $165 Mln In Investments Planned for Incahuasi Field

(Energy Analytics Institute, Ian Silverman, 21.Sep.2018) — Bolivia’s President Evo Morales announced details of investments destined to boost natural gas production at the Incahuasi field, located in the municipality of Lagunillas, south of Santa Cruz.

The investments include the following:

$29.5 million for expansion of plant capacity;

$25.6 million for interconnection of well ICS3;

$62.5 million to drilling the ICS5 well; and

$47.4 million in other investments, reported the daily Bolivian newspaper La Razón.

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Bolivian Government Approves Bioethanol Made with New Blend of Additives

(Efe, 16.Sep.2018) — Bolivia gave the green light to the massive production of bioethanol to replace the importation of additives for gasoline and diesel fuel in accord with a law signed by President Evo Morales.

Morales signed the Law on Vegetable Derived Additives on Saturday during a ceremony in Minero, a city in the eastern region of Santa Cruz, attended by representatives of the main business and industrial unions, along with workers from the sugar cane sector.

The president emphasized that the promulgation of the measure is “something historic” because farmers and industry have waited 30 years for the project to come to fruition.

“Ethanol is not only for the sugar cane growers, ethanol is for everyone. We all win, the state, the agroindustrial sector and thus we’re building the new Bolivia with economic growth,” Morales said.

The law establishes the legal framework allowing production, storage, transport, marketing and mixing for additives of vegetable origin with an eye toward progressively replacing the importation of additives for fuels, thus guaranteeing the country’s food and energy security.

Calculations are that ethanol production will result in growth in the gross domestic product (GDP) of 0.90 percent in one year and 4.4 percent in the agricultural sector in particular, the president said.

The project will allow the government to save about $20 million the first year by reducing the subsidy for fuels and those savings will total $130 million by 2025, Morales said.

The president noted the investments made in several sugar mills before the promulgation of the law, a situation that – in his judgment – shows the confidence of the private sector in the government.

Last Thursday, Mariano Aguilera, the chairman of the board of the Guabira sugar mill, said in a press conference that he was pleased that the government was moving ahead to enact legislation for the production, sale and blending of vegetable-derived additives.

Aguilera said that once Morales signed the legislation into law, the mill could immediately enter into contracts with state energy company YPFB and start distributing bioethanol so domestic consumers could begin using fuels with the new blend.

YPFB has called on domestic sugar mills to produce some 80 million liters of bioethanol in the first year, Aguilera said, adding that that volume could increase steadily in subsequent years.

Located in Montero, a town in Santa Cruz, Guabira is made up of 1,670 shareholders (sugar cane entrepreneurs), 1,400 industrial workers and more than 1,526 cane growers.

Aguilera said the mill planned to invest $40 million over the next two years to take on the “great challenge” of bioethanol production.

The mill has already produced more than 6 million liters of ethanol that is in its warehouses and ready to be delivered to YPFB when required, he said.

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Bolivia’s Morales Says Electricity Rates Will Not Rise

(Energy Analytics Institute, Ian Silverman, 15.Sep.2018) — Read my lips. Well, it wasn’t exactly like that.

However, Bolivia’s President Evo Morales clarified that electricity tariffs in the small land-locked South American county would not rise.

Domestic consumption is around 1,500 megawatts, while supply is around 2,100 megawatts, reported the daily La Razón, citing Morales.

No further details were revealed by the daily.

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Argentina Owes Bolivia $250 Million for Natural Gas Sales

(Energy Analytics Institute, Ian Silverman, 14.Sep.2018) — Argentina owes Bolivia $250 million, which corresponds to two-months of natural gas sales.

“Hopefully they can honor the debt,” reported the daily newspaper La Razón, citing Bolivia’s Hydrocarbons Minister Luis Alberto Sánchez.

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Bolivian 3P Gas Reserves Reach 14.7 Tcf at YE:17

(Energy Analytics Institute, Jared Yamin, 3.Sep.2018) — Bolivia’s proved, probable and possible (3P) natural gas reserves rose to 14.7 trillion cubic feet (Tcf) at year-end 2017, according to a reserve report produced by Canadian company Sproule International Limited.

These proved (1P) reserve figures compared to 9.94 Tcf in 2009, when certified by Ryder Scott and 10.45 Tcf in 2013, when certified by Canadian company GLJ Petroleum Consultants, reported the daily newspaper La Razón.

Bolivia’s proved, probable and possible (3P) crude oil reserves were 376.1 million barrels at year-end 2017, according to the Sproule report.

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Companies to Invest Nearly $900 Mln in Iñiguazu

(Energy Analytics Institute, Jared Yamin, 12.Aug2018) – In Caraparí, in southern Bolivia, a law was enacted that paves the way for the exploration and exploitation of hydrocarbon resources in Iñiguazu.

Passage of the law is expected to attract investments of close to $900 million, reported the daily newspaper La Razón.

The Iñiguazu area has estimated reserve potential of 1.2 trillion cubic feet (Tcf) of natural gas and 43.9 million barrels of oil (MMbbls), according to the daily.

“Starting next week we will conduct engineering studies,” reported the daily, citing Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez. “Infrastructure related construction work is expected to commence next year,” he added.

The project involves drilling 8 producing wells, construction of collection lines, production facilities and a natural gas pipeline that will connect the Iñiguazu wells with the San Alberto Gas Plant. The pipeline is expected to transport initial production of 1.5 million cubic meters per day (MMcm/d) of natural gas by 2021, rising to 7.6 MMcm/d of natural gas at its peak in 2026.

Activities in Iñiguazu will be conducted by YPFB Andina S.A., YPFB Chaco SA, Repsol, Shell and PAE, according to the daily.

***

Bolivia Aims to Start Production of Bioethanol

(Efe, 5.Aug.2018) – Bolivia is on the verge of producing bioethanol at a mass scale in an effort to phase out the country’s reliance on imported gasoline and diesel additives, which are used to improve the performance of both fuels.

The project is mainly driven by the privately-owned Guabira sugar plantation, located in the city of Montero, near Santa Cruz, the county’s second city.

During a press conference organized by the Bolivian Foreign Trade Institute (IBCE), Guabira chairman of the board Mariano Aguilera told reporters that the mass production of ethanol will mean that the country will not need to import further fuel additives.

The company’s first 10,000 liters (2,642 gallons) of the fuel were tested on an assortment of vehicles – operating across a range of climates – yielding “optimal” results, Aguilera said.

“At this moment, we have five million liters (1.3 million gallons) to deliver to YPFB,” the businessman said.

In May, the government partnered up with Santa Cruz sugarcane producers to boost the production of the fuel.

To that end, the sector is set to receive an investment of some $1.5 billion, which is aimed to expand sugarcane crops from 151,000 hectares to 330,000 hectares (373,129 acres to 741,316 acres), the IBCE said.

***

Sproule To Publish Bolivian Reserve Report

(Energy Analytics Institute, Ian Silverman, 28.Jul.2018) – Sproule International Limited, the foreign consortium that will quantify and certify Bolivia’s hydrocarbon reserves, plans to publish its reserve report in late August 2018.

The consortium, which was awarded the project earlier this year for $750,000, had originally planned to publish the report in May, but has revised the date to late August, reported the daily newspaper La Razón, citing Yacimientos Petrolíferos Fiscales Bolivianos President Óscar Barriga.

***

Chuquisaca Signs Multi Billion Oil Deal

(Energy Analytics Institute, Ian Silverman, 28.Jul.2018) – The agreement, signed between the Bolivian government and authorities from the department of Chuquisaca provides for initiation of work in more than 8 areas.

Announcement of the planned investments came after meetings between the government, and authorities and representatives from different sectors of this southern region. The signed agreement pretends to “leave behind moments of conflict of past months,” reported the daily newspaper El Diario.

Per the agreement, the department of Chuquisaca will benefit from investments to be destined for exploration and promotion of the hydrocarbon sector.

Between 2018-2021, an amount of $1.290 billion will be destined to several hydrocarbon deposits in the region. The remaining investment will come from an agreement reached last month in Moscow with Gazprom, during an official visit by Bolivia’s President Evo Morales, and in which the Russian company announced plans to allocate 1.224 billion euros to a hydrocarbon field in Chuquisaca.

Recent Conflict

In May, the department of Chuquisaca was virtually paralyzed for two weeks as main avenues and roads that connect the capital with the rest of the country — including access to its airport — were blocked.

The conflict stemmed from a decision by the government that said an important natural gas deposit was located in the Santa Cruz region instead of Chuquisaca, as originally thought.

***

Bolivia To Start Work on Transmission Line to Argentina

(Energy Analytics Institute, Ian Silverman, 26.Jul.2018) – In two or three weeks, Bolivia expects to start work on an electrical transmission line that will allow it to export energy to Argentina.

The lines could be finished in 2019 and allow the small land-locked country to export between 80 and 120 megawatts of energy to Argentina, reported the daily newspaper La Razón.

Bolivia expects to have capacity to export 1,000 MW in about four years later or around 2023-2024.

***

YLB Expects Lithium Certification in December

(Energy Analytics Institute, Ian Silverman, 26.Jul.2018) – Bolivia announced the international certification for the country’s lithium reserves in Salar de Uyuni will be delivered in December of 2018.

The certification work is being carried out by a US company, reported the daily newspaper El Diario, citing Yacimientos de Lito Bolivianos or YLB Manager Juan Carlos Montenegro.

“We are in the process of certifying our reserves. With certainty by the end of this year we’ll confirm that the Salar de Uyuni is the largest lithium reservoir in the world,” announced Montenegro.

***

YPFB to Drill $35 Mln MYC-X1 Study Well

(Energy Analytics Institute, Ian Silverman, 23.Jul.2018) – Bolivia’s state oil company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) plans to drill the Mayaya Centro (MYC-X1) stratigraphic investigative well in 2019 with an estimated investment of $35 million.

The well — to be drilled to an approximate depth of 5,500 meters — is planned for the Lliquimuni area located in northern La Paz, and forms part of the mandate of the Bolivian government to convert the western department of the country into a producing region, reported the daily newspaper La Razon.

Evaluation work north of La Paz could allow the region to become a new hydrocarbon region, producing natural gas, condensates, and petroleum, and allow the government to collect additional royalties, reported the daily, citing Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez.

***

FDI in LAC Region Falls for Third Straight Year

(Energy Analytics Institute, Ian Silverman, 12.Jul.2018) – Foreign Direct Investment (FDI) in Latin America and the Caribbean fell for a third straight year in 2017, reported the Economic Commission for Latin America and the Caribbean or CEPAL by its Spanish acronym.

The details were revealed in CEPAL’s annual report titled “FDI in Latin America and the Caribbean 2018.”

***

Bolivia, Argentina to Meet Over Gas Volumes

(Energy Analytics Institute, Ian Silverman, 12.Jul.2018) – The Bolivian government is still analyzing Argentina’s request to increase natural gas export volumes during the winter season and reduce them in summer.

Meetings between officials from Bolivia and Argentina are expected in coming weeks to discuss the proposals, reported the daily newspaper La Razón, citing Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) President Óscar Barriga.

***

Bolivia’s Hydroelectric Potential 38,000 MW, CAF Says

(Energy Analytics Institute, Jared Yamin, 4.Jul.2018) – This figure is according to the most recent study results, and excludes protected areas.

The figure climbs to a bit over 60,000 megawatts if protected areas are included, reported the daily newspaper La Razón, citing Antonio Pinheiro, CAF Development Bank Corporate Vice President of Infrastructure.

***

ENDE to Investigate High Electricity Rates

(Energy Analytics Institute, Jared Yamin, 4.Jul.2018) – Citizens in the city of Trinidad, located in department of Beni, continue to protests elevated electricity rates.

As a result, the Beni Electricity Distributor (ENDE DELBENI S.A.M.), a subsidiary of the National Electricity Company (ENDE), plans to investigate complaints circulating of customers being charged electricity rates up to 300% higher in the city.

“There is a special situation here. People are complaining about their high invoices, and the task at hand now is to try to verify, inspect, and investigate what is happening,” reported the daily La Razón, citing company official Humberto Villegas.

***

Gazprom to Invest $1.2 Bln in Bolivia

(Energy Analytics Institute, Aaron Simonsky, 28.Jun.2018) – Gazprom confirmed it will invest $1.22 billion in the Bolivian petroleum sector.

The Russian company’s investments will be destined towards exploration activities at the Vitiacua field located in the department of Chuquisaca. Gazprom didn’t rule out financing rehabilitation projects for older Bolivian fields, reported the daily newspaper La Razon.

The announcement came during a ceremony in the presence of Bolivia’s President Evo Morales with Gazprom and the Russian fertilizer company Acron. Other meetings in Moscow included the presence of numerous authorities from the government of Russian President Vladimir Putin.

Bolivia and Russia also discussed deals related to geological cooperation on issues related to groundwater, the daily reported.

***

Luis Arce Named New Director at YPFB Transporte

(Energy Analytics Institute, Aaron Simonsky, 24.Jun.2018) – Bolivia has named as a new director at YPFB Transporte.

Luis Arce, who served as Bolivia’s Economic and Finance Minister from January 23, 2006 until June 24, 2017, when he left his post for medical reasons, will replace Evelio Harb Pedraza, reported the daily La Razón, citing details from Bolivia’s Bolivian Stock Exchange (BBV by its Spanish acronym).

Additionally, David Gutiérrez was named as trustee to the state entity, replacing Benjamín Galván.

With the changes, YPFB Transporte’s board is now conformed of the following executives: Oscar Barriga, Wilmer Saavedra, Wilson Zelaya, Luis Arce, Florencio López, William Morales and Víctor Saldías.
***

Gazprom Reiterates Interest in Bolivia

Luis Poma and Vitaly Markelov at signing ceremony. Source: Gazprom

(Energy Analytics Institute, Jared Yamin, 16.Jun.2018) – Russian oil giant Gazprom remains attracted to the hydrocarbon opportunity set in Bolivia in South America.

A working meeting between Gazprom Management Committee Chairman Alexey Miller and Bolivia’s President Evo Morales was held at Gazprom’s office in Moscow where various agreements were signed with the aim to expand cooperation between Gazprom and Bolivia in the petroleum sector.

Land-locked Bolivia is the third-largest hydrocarbon producer in South America, extracting over 20 billion cubic meters of natural gas per year. Bolivia’s gas production is initially destined for the domestic market, while excess gas supply is exported primarily to Argentina and Brazil.

Miller expressed appreciation for the ongoing implementation of joint projects in Bolivia and discussed the opportunities to increase output at Bolivia’s Incahuasi natural gas field. The Russian official placed emphasis on joint plans for geological exploration in the promising Vitiacua oil and gas block, reported Gazprom in an official statement on its website.

A summary of the signed agreements follows:

Gazprom Management Committee Deputy Chairman Vitaly Markelov and Yacimientos Petroliferos Fiscales Bolivianos (YPFB) Vice President for Contract Management and Supervision Luis Poma signed a strategic cooperation agreement that envisions joint efforts in a wide range of areas including but not limited to the following: geological exploration, gas production and hydrocarbon transportation across Bolivia, development of the national gas and oil transportation infrastructure and NGV market, exchange of experience and personnel training, and sci-tech collaboration.

Gazprom EP International B.V. Managing Director Andrey Fick and Luis Poma also signed a term sheet related to the contract for exploration and production in the Vitiacua oil and gas block that will allow the companies to start drafting the main design documentation.

Finally, Bolivia’s Hydrocarbons and Energy Minister Luis Alberto Sanchez and Alexey Tyupanov, the CEO of EXIAR — the Russian Agency for Export Credit and Investment Insurance, which was established in late 2011, becoming Russia’s first export credit agency — signed an agreement to secure financing for supplies of gas-fueled machinery and equipment produced by Russian manufacturers.

GAZPROM IN BOLIVIA

In Bolivia, Gazprom International B.V., a company that participates in hydrocarbon prospecting, exploration and development projects outside Russia, represents Gazprom’s interests in projects in the country.

Gazprom in partnership with France’s Total S.A. (operator, WI 50%), Tecpetrol S.A. (WI 20%), and YPFB (WI 10%) develops the promising Ipati and Aquio oil- and gas-bearing blocks, within which the Incahuasi field is located. Gazprom (WI 50%) and Total (WI 50%) also implement a hydrocarbon exploration project in the Azero block.

In 2016, Gazprom, Bolivia’s Ministry of Hydrocarbons and Energy, and YPFB established the means for implementing Bolivia-based projects for hydrocarbon exploration, production, and transportation, and updated the general scheme for development of the country’s gas industry through 2040. Gazprom and YPFB also cooperate in personnel training and retraining.

Finally, in 2016, Gazprom and YPFB signed an agreement to explore the promising La Ceiba, Vitiacua and Madidi blocks. The La Ceiba and Vitiacua blocks are situated in the Chaco oil- and gas-bearing basin in the southern part of Bolivia (Tarija and Chuquisaca departments).

***

Argentina to Export Natural Gas to Chile by YE:18

(Reuters, Luc Cohen, 14.Jun.2018) – Argentina will begin exporting natural gas to neighboring Chile before the end of the year, the energy ministers of both countries said on Thursday, as output from the Vaca Muerta shale field rises.

The two South American countries had previously signed deals allowing for the export of gas or electricity in emergency situations, but required that an equivalent amount be re-imported within twelve months.

Chilean companies are in talks to sign import deals and the first flow of gas across the Andes could come in October or November of this year, Chile energy minister Susana Jimenez said in an interview in Bariloche, Argentina at the G20 Meeting of Energy Ministers.

“We see a great opportunity for mutual benefit,” she said, adding that the gas could come both from the Neuquen basin, home to Vaca Muerta, and from the Austral basin in southern Argentina.

The gas could be used for electricity generation, replacing imports from elsewhere, or to heat homes in areas where families still depend on wood, a source of pollution in the center-south region, Jimenez said. Chile produces little hydrocarbons of its own.

The unrestricted exports would mark a turning point in energy trade in the region. Argentina was once a major supplier of natural gas to Chile, but triggered a diplomatic crisis in the mid-2000s by cutting off shipments when its own supplies ran low.

Argentina sits atop the world’s No. 2 shale gas reserves but is still a net energy importer. Since taking office in December 2015, President Mauricio Macri has sought to loosen labor rules and boost infrastructure to attract investment.

Rising output from Vaca Muerta could help the country export more than it imports by 2021, Argentina’s energy minister Juan Jose Aranguren said at a news conference. The country is set to import slightly more than 50 cargoes of liquefied natural gas (LNG) this year, down from 68 last year and 90 in 2015.

Argentina still needs the LNG imports to meet peak winter demand, but in the southern hemisphere summer months it could see a surplus, Aranguren said.

“This summer we will start to sign permits for exporting natural gas to Chile without any restrictions,” he said.
***

Bolivia, Russia Consolidate Energy Partnership

(Efe, 13.Jun.2018) – Bolivia’s President Evo Morales met with his Russian counterpart, Vladimir Putin, as part of a two-day visit to Moscow aimed at consolidating the countries’ bilateral energy partnership.

While receiving Morales at the Kremlin, Putin expressed Moscow’s willingness to expand its cooperation with the South American country in the hydrocarbons area.

“Gazprom (the state-owned Russian natural gas producer) is working at two (Bolivian) fields where it extracts 2.5 billion cubic meters of gas. It’s now studying expanding production, which could be doubled,” Putin said at the start of talks with Morales.

A consortium in which the Bolivian unit of French oil major Total is the operator with a 50 percent stake, Gazprom and Bolivia’s TecPetrol each have a 20 percent interest and a unit of Bolivian state energy company YPFB has a 10 percent stake participates in exploration projects at the Aquio and Ipati gas and oil blocks, where the Incahuasi gas and condensate field is being developed.

Gazprom and Total also are carrying out an exploration project at the Azero block, which like Aquio and Ipati is located in southern Bolivia.

Putin also noted that Rosatom, Russia’s federal agency on atomic energy, was developing a nuclear research center in Bolivia.

“So I’m very pleased to confirm that our relations are growing, and today we’ll issue a joint declaration documenting all areas of our interaction,” he added.

For his part, Morales underscored the countries’ shared values, particularly in terms of “respect for nature, for Mother Earth.”

Bolivia’s president expressed his country’s interest in cooperating with the Eurasian Economic Union, which is made up of the post-Soviet states of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.

Morales on Thursday will visit Gazprom’s headquarters, where he is expected to sign several agreements locking in roughly $1 billion in Russian investment in Bolivia’s hydrocarbons sector.
***

Energy, Education, and Learning Through NRG ED

(Energy Analytics Institute, Aaron Simonsky, 24.May.2018) – Energy Analytics Institute, formerly LatinPetroleum Inc., continues to promote its “Energy Education Initiative” in the Americas, also known as “NRG ED.”

NRG ED is structured to work with K-12 schools, community colleges, four-year colleges and universities, workforce training programs, communities and businesses, and aims to promote reduction of non-renewable energy usage in favor of renewable energies. However, the core of the initiative is education, without which the NRG ED initiative would not be.

“At its core the initiative is really focused on education,” said Chad Archey, Editor-in-Chief at Energy Analytics Institute from Atlanta, Georgia.

EAI views basic education as most important in the overall learning process and also promotes educational initiatives and research from grade school to the professional level related to the energy sector. EAI aims to foment constructive dialogue regarding energy usage as well as ways to reduce the carbon footprint left by non-renewable energy resources through the following: 1) educational consultancy, 2) development and distribution of educational and training materials, and 3) promotion of debate and discussion regarding renewable energy alternatives.

Energy Analytics Institute (EAI), formerly LatinPetroleum Inc. (dba LatinPetroleum.com), is a Houston-based independent company focused on producing non-biased news, updates and special reports for investors interested in the Latin America and Caribbean petroleum sectors.
***

Solar Power Lights Up Rural Bolivia

(World Bank, 11.May.2018) – How do you turn on a light at night when you’ve left the power grid far, far behind? In Bolivia, the solution is solar power. This is one of several case studies in the upcoming State of Energy Access Report, supported by the World Bank’s Energy Sector Management Assistance Program (ESMAP).

Bolivia Looks to Build Gas Liquefaction Plant in Ilo

(Energy Analytics Institute, Jared Yamin, 5.May.2018) – Bolivia plans to construct a gas liquefaction plant in the Peruvian port of Ilo in order to consolidate LNG exports.

The decision, announced by Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez, was made without taking into account certified natural gas reserves or decline rates at the giant Tarija field, reported the daily El Diario.
***

Bolivia Shifts Gas Investment Plans Amid Protests

(Efe, 4.May.2018) – Bolivia announced on Friday it was halting plans to spend $683 million on natural gas exploration work in an area of the southern province of Tarija due to environmental protests, saying that money would instead be invested elsewhere in the Andean nation.

La Paz said the two fields targeted for exploration had potential reserves of more than 4.21 trillion cubic feet and could have generated some $9 billion in revenue, $1.8 billion of which would have been allocated to that southern province.

In a press conference, Hydrocarbons Minister Luis Alberto Sanchez said some sectors in Tarija did not want the national government to invest there.

On April 7, Bolivia’s government enacted two laws authorizing natural gas exploration and production work at the Astillero and San Telmo fields, located in Tarija’s Tariquia Flora and Fauna National Reserve.

Sanchez said those funds would be allocated to “other places where the state’s work is appreciated.”

The minister said some non-governmental organizations, Tarija’s provincial government and that province’s civic committee were responsible for drumming up resistance to the gas project.

Public opposition to the planned exploratory drilling has become more vehement in recent days, prompting the government to reverse course.

Sanchez said, however, that work at both fields would have had a minimal impact on the national reserve’s 247,000-hectare (950-sq.-mile) area.

Brazilian state-controlled oil giant Petrobras and Bolivian state energy company YPFB’s Chaco and Andina units were to have carried out the work at Astillero and San Telmo.
***

Bolivia’s YLB and ACI Systems to Build $1.3 Bln Lithium Plant

(Energy Analytics Institute, Jared Yamin, 3.May.2018) – Bolivia’s Yacimientos de Litio Bolivianos (YLB) selected ACI Systems GmbH as its partner to create a joint venture company in charge of industrialization of the Bolivia’s lithium, reported the daily La Razón. The companies plan to build a lithium battery plant in Potosí that has an estimated price tag of $1.328 billion. Construction of the lithium hydroxide plant, the first of its kind in Latin America, is expected to conclude after 24 months.
***

ECLAC Ssays Venezuela’s Economic Activity to Fall 8.5% in 2018

(Energy Analytics Institute, Aaron Simonsky, 1.May.2018) – The United Nations Economic Commission for Latin America and the Caribbean, also known as ECLAC or CEPAL by its Spanish acronym, projects economic activity in troubled Venezuela will contract 8.5% in 2018.

Gross domestic product or (GDP) estimates for other important countries and regions follows:

TABLE 1: ECLAC GDP ESTIMATES FOR 2018

Country/Region —————————- GDP (Est.)

Argentina ———————————— 2.5%
Bolivia ————————————— 4.0%
Brazil —————————————- 2.2%
Chile —————————————– 3.3%
Colombia ———————————— 2.6%
Ecuador ————————————– 2.0%
Paraguay ————————————- 4.0%
Uruguay ————————————– 3.0%
Venezuela ———————————– (8.5%)

Latin America and Caribbean (LAC) —- 2.2%
South America —————————— 2.0%
Central America and Mexico ————- 2.6%
Central America —————————- 3.6%
Latin America ——————————- 2.2%
Caribbean ———————————— 1.4%

Source: ECLAC, April 2018
***

Bolivian Govt Expects $90 Mln Return from New Gas Well

(Efe, 30.Apr.2018) – A new natural gas well that began production Monday in the southern region of Tarija is expected to contribute $90 million to the public coffers over the next seven years, Bolivian officials said.

President Evo Morales traveled to Villamontes, Tarija, for the inauguration of the Sabalo 6 well, operated by Brazil’s Petrobras.

The well will produce 28 million cu. ft. per day of natural gas, according to state petroleum company YPFB.

“Production continues increasing, that guarantees not only our internal market, but also our export commitments,” Morales said.

Sabalo 6 will generate $20 million in royalties, taxes and profit-participation for the Bolivian treasury in its first full year of production, YPFB chief executive Oscar Barriga said.

Drilling at the site began in April 2016 and production testing started a year later.

***

Bolivia, Denmark Invest $193.9 Mln in Santa Cruz Projects

(Energy Analytics Institute, Ian Silverman, 30.Apr.2018) – Bolivia and Denmark plan to invest $193.9 million on wind complexes in Warnes, San Julián and El Dorado in Bolivia’s Santa Cruz department. Bolivia and Denmark will front $66.8 million and $24 million, respectively, of the total investment. The difference or $103.1 million will be come via a credit, reported the daily La Razón, without providing details. In total, the three complexes will generate 108 megawatts of energy, according to the daily.

The projects comprise a greater initiative by the Bolivian government to generate sufficient energy to cover demand in the domestic market, and also export surplus energy to neighbors such as Argentina and Brazil.
***

Bolivia Seeks Investors to Power Up Lagging Lithium Output

(Reuters, Alexandra Alper, 27.Dec.2017) — Bolivia hopes surging global lithium demand can lure foreign investors to the country where nearly a decade of state-led development has left output far short of goals for the metal, coveted by makers of batteries for devices from laptops to electric cars.

The poor South American nation boasts nearly a quarter of the world’s known resources of the world’s lightest metal. Still, production lags far behind neighboring Chile and Argentina. Bolivia hopes to sign a deal with at least one foreign partner to invest up to $750 million in factories to meet rising demand from China and other countries for lithium-ion batteries.

The country is eager to cash in on tightening supplies of lithium. Experts say spot prices have more than doubled to around $25,000 per ton from below $10,000 in 2015.

Rain and other natural challenges, along with execution hiccups, have hampered state-run operations. Foreign companies with more expertise may be spooked by the left-leaning government of President Evo Morales, whose interventionist policies in other sectors have riled some big corporations and made others hesitant to invest, analysts said.

Bolivia had hoped its project at Uyuni, the world’s largest salt flat, would produce 40 tonnes per month of lithium carbonate by 2011. Nine years and $450 million into the project, it is producing just 10 tonnes per month.

Elsewhere in South America’s Lithium Triangle, Chile produces 70,000 tonnes a year and Argentina 30,000. Total global production is about 230,000 tonnes. Bolivia has sold exports at far below market prices; an employee of state-run lithium company YLB said it was trying to secure market share.

YLB CEO Juan Carlos Montenegro dismissed concerns about slow production.

“That criticism does not hurt us or interest us,” he said. “The important thing for us is … the results we are going to see in 2018 and 2019.”

He said Bolivia was talking with potential partners it hopes will invest up to $750 million. He declined to name them but said a deal could be awarded this month for a 49 percent stake in a major expansion that could include up to seven new plants for cathodes, batteries and more.

Next month, bids are due to build an industrial lithium carbonate facility designed by Germany’s K-UTEC. That plant, which was slated to produce 30,000 tonnes per year in 2017, is now expected to produce half that in 2019.

However, critics doubt whether foreign industry heavyweights such as Albemarle Corp (ALB.N) and Chile’s SQM (SQMa.SN) will risk their capital in Bolivia. Morales has expropriated a series of foreign holdings since taking office in 2006.

Last year, Swiss-based mining and trading firm Glencore Plc (GLEN.L) said it would begin arbitration against Bolivia over nationalization of some assets. (reut.rs/2CezVbK)

Foreign companies with the right expertise, including one from Korea, have turned down the opportunity to operate in Bolivia, said Robert Baylis, managing director at Roskill Information Services Ltd, a consultancy.

“They felt either the risk that they would be nationalized or they would face a lot of problems,” he said, adding that no one has yet completed a study that shows Bolivian resources could be extracted economically.

JIGSAW PUZZLE

The lithium market is ripe for new entrants. The niche market for electric vehicles is gearing up for substantial growth as regulators globally tighten limits on greenhouse gas emissions.

China, the world’s largest auto market, has pledged to make electric and plug-in hybrid vehicles a fifth of auto sales by 2025. Britain and France have pledged to ban sales of combustion engine cars starting in 2040.

Suppliers like Japan’s Panasonic Corp (6752.T) and Korea’s LG Chem (051910.KS), and U.S. electric car maker Tesla Inc (TSLA.O), which makes its own batteries, are eager to secure long-term lithium supplies.

At Bolivia’s Uyuni project, lithium-infused brine lies beneath 10,000 square kilometers of shining white salt, the remains of a vast prehistoric lake on a high Andean plateau that draws thousands of tourists each year.

In a corner of the salt flat, turquoise-colored brine slowly evaporates in rows of vast square pools, leaving behind lithium crystals. These are transferred to a pilot plant and turned into lithium carbonate.

Over a hundred miles east, nestled in the arid mountains that ring the historic silver-mining town of Potosi, another pilot plant in an abandoned Russian tin facility turns the lithium carbonate into cathodes. A third plant next door makes these into simple batteries.

The project was designed to show the Bolivian state could exploit its own lithium, unlike top producers Australia, Chile and Argentina where private firms extract the lion’s share of the metal.

Rains often flood the salt flats, lengthening the extraction process. Evaporation, Bolivia’s chosen technique, leaves around half the lithium in the brine. Also, the ratio of magnesium to lithium at Uyuni is four times greater than in Chile’s Atacama desert, making extraction harder.

Marcelo Castro, leader of the Uyuni efforts from 2007 to 2016, said workers went weeks without washing their hair to conserve water in the project’s early days, before water and electricity supplies were set up in the inhospitable landscape. He recalled watching evaporation pools near the salt flat fail, contaminated by dirt carried on the wind.

Castro said he had not planned to spend a decade at the Uyuni project, “but when the needs are urgent you stay.”

The project aimed to create an integrated supply chain, helping free Bolivia from overreliance on the whims of volatile commodity markets. Yet the battery plant was built in 2013, four years before the cathode plant. Chinese companies still supply the battery plant with cathodes from abroad.

None of the nearly 3,000 batteries sitting in storage has been sold, according to the plant production manager. Bolivia plans to use at least some of these for rural electrification.

Few outside analysts see a clear path for Bolivia to become a major player in the booming industry.

“It is a puzzle with so many missing pieces. Who can put it together?” said Juan Carlos Zuleta, a Bolivian lithium analyst, who called the project “disastrous.” “It’s a bad use of our scarce resources.”

***

Bolivia Seeks Investors To Power Up Lagging Lithium Output

(Reuters, Alexandra Alper, 27.Dec.2017) — Bolivia hopes surging global lithium demand can lure foreign investors to the country where nearly a decade of state-led development has left output far short of goals for the metal, coveted by makers of batteries for devices from laptops to electric cars.

The poor South American nation boasts nearly a quarter of the world’s known resources of the world’s lightest metal. Still, production lags far behind neighboring Chile and Argentina. Bolivia hopes to sign a deal with at least one foreign partner to invest up to $750 million in factories to meet rising demand from China and other countries for lithium-ion batteries.

The country is eager to cash in on tightening supplies of lithium. Experts say spot prices have more than doubled to around $25,000 per ton from below $10,000 in 2015.

Rain and other natural challenges, along with execution hiccups, have hampered state-run operations. Foreign companies with more expertise may be spooked by the left-leaning government of President Evo Morales, whose interventionist policies in other sectors have riled some big corporations and made others hesitant to invest, analysts said.

Bolivia had hoped its project at Uyuni, the world’s largest salt flat, would produce 40 tonnes per month of lithium carbonate by 2011. Nine years and $450 million into the project, it is producing just 10 tonnes per month.

Elsewhere in South America’s Lithium Triangle, Chile produces 70,000 tonnes a year and Argentina 30,000. Total global production is about 230,000 tonnes. Bolivia has sold exports at far below market prices; an employee of state-run lithium company YLB said it was trying to secure market share.

YLB CEO Juan Carlos Montenegro dismissed concerns about slow production.

“That criticism does not hurt us or interest us,” he said. “The important thing for us is … the results we are going to see in 2018 and 2019.”

He said Bolivia was talking with potential partners it hopes will invest up to $750 million. He declined to name them but said a deal could be awarded this month for a 49 percent stake in a major expansion that could include up to seven new plants for cathodes, batteries and more.

Next month, bids are due to build an industrial lithium carbonate facility designed by Germany’s K-UTEC. That plant, which was slated to produce 30,000 tonnes per year in 2017, is now expected to produce half that in 2019.

However, critics doubt whether foreign industry heavyweights such as Albemarle Corp (ALB.N) and Chile’s SQM (SQMa.SN) will risk their capital in Bolivia. Morales has expropriated a series of foreign holdings since taking office in 2006.

Last year, Swiss-based mining and trading firm Glencore Plc (GLEN.L) said it would begin arbitration against Bolivia over nationalization of some assets. (reut.rs/2CezVbK)

Foreign companies with the right expertise, including one from Korea, have turned down the opportunity to operate in Bolivia, said Robert Baylis, managing director at Roskill Information Services Ltd, a consultancy.

“They felt either the risk that they would be nationalized or they would face a lot of problems,” he said, adding that no one has yet completed a study that shows Bolivian resources could be extracted economically.

JIGSAW PUZZLE

The lithium market is ripe for new entrants. The niche market for electric vehicles is gearing up for substantial growth as regulators globally tighten limits on greenhouse gas emissions.

China, the world’s largest auto market, has pledged to make electric and plug-in hybrid vehicles a fifth of auto sales by 2025. Britain and France have pledged to ban sales of combustion engine cars starting in 2040.

Suppliers like Japan’s Panasonic Corp (6752.T) and Korea’s LG Chem (051910.KS), and U.S. electric car maker Tesla Inc (TSLA.O), which makes its own batteries, are eager to secure long-term lithium supplies.

At Bolivia’s Uyuni project, lithium-infused brine lies beneath 10,000 square kilometers of shining white salt, the remains of a vast prehistoric lake on a high Andean plateau that draws thousands of tourists each year.

In a corner of the salt flat, turquoise-colored brine slowly evaporates in rows of vast square pools, leaving behind lithium crystals. These are transferred to a pilot plant and turned into lithium carbonate.

Over a hundred miles east, nestled in the arid mountains that ring the historic silver-mining town of Potosi, another pilot plant in an abandoned Russian tin facility turns the lithium carbonate into cathodes. A third plant next door makes these into simple batteries.

The project was designed to show the Bolivian state could exploit its own lithium, unlike top producers Australia, Chile and Argentina where private firms extract the lion’s share of the metal.

Rains often flood the salt flats, lengthening the extraction process. Evaporation, Bolivia’s chosen technique, leaves around half the lithium in the brine. Also, the ratio of magnesium to lithium at Uyuni is four times greater than in Chile’s Atacama desert, making extraction harder.

Marcelo Castro, leader of the Uyuni efforts from 2007 to 2016, said workers went weeks without washing their hair to conserve water in the project’s early days, before water and electricity supplies were set up in the inhospitable landscape. He recalled watching evaporation pools near the salt flat fail, contaminated by dirt carried on the wind.

Castro said he had not planned to spend a decade at the Uyuni project, “but when the needs are urgent you stay.”

The project aimed to create an integrated supply chain, helping free Bolivia from overreliance on the whims of volatile commodity markets. Yet the battery plant was built in 2013, four years before the cathode plant. Chinese companies still supply the battery plant with cathodes from abroad.

None of the nearly 3,000 batteries sitting in storage has been sold, according to the plant production manager. Bolivia plans to use at least some of these for rural electrification.

Few outside analysts see a clear path for Bolivia to become a major player in the booming industry.

“It is a puzzle with so many missing pieces. Who can put it together?” said Juan Carlos Zuleta, a Bolivian lithium analyst, who called the project “disastrous.” “It’s a bad use of our scarce resources.”

***

Bolivia Says El Alto to Have Gas in 2018

(Energy Analytics Institute, Jared Yamin, 10.Mar.2017) – The entire population of the city El Alto will have access to domestic gas service in 2018.

Bolivia’s state oil company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) has invested an estimated $195 million in El Alto since 2006 and to-date has achieved an 80 percent completion rate for the project, reported the daily newspaper La Razón, citing Bolivia’s Vice President García Linera. YPFB plans to invest an additional $7.87 million in the project to reach its projected goal by 2018, reported the daily.

El Alto has an estimated 191,000 installed connections and this year the plan is to connect another 9,509 installations.

***

Resilience: Actions of the Gas and Oil Industry

(Energy Analytics Institute, Jared Yamin, 11.Jul.2016) – The 6th version of the congress will take place from July 12-13, 2016 at the Los Tajibos Hotel in Santa Cruz de la Sierra, Bolivia and include the following themes:

1) global perspectives and hydrocarbon strategies in the current scenario,and

2) current and future challenges for the gas, oil and petrochemical industry.

***

YPFB, Gazprom to Evaluate Potential of 3 Areas

(Energy Analytics Institute, Jared Yamin, 17.Jun.2016) – YPFB and Gazprom signed an agreement for the evaluation of the hydrocarbon potential of three areas reserved for YPFB.

The agreement was signed by YPFB President Guillermo Acha and GP Exploration and Production S.L. legal representative Andrey Stepanovich Fick for the Vitiacua, La Ceiba and Madidi areas, reported the daily newspaper La Razón.

Gazprom, YPFB and Bolivia’s Hydrocarbon and Energy Ministry signed an Action Plan on February 18, 2016 in which the entities agreed to evaluate the hydrocarbon potential of areas reserved for YPFB. Gazprom E&P plans to invest an estimated $370 million to develop the areas in the case a discovery has commercial potential.

Vitiacua is located between Santa Cruz and Chuquisaca departments and covers an extension of 73,875 hectares. La Ceiba has an extension of 47,500 hectares and is located in Tarija department. Both areas are located in what are known as a traditional area. Madidi covers an extension of 690,000 hectares in a non-traditional area in the La Paz department.

***

YPFB, PetroPar and LPG Distributors Discuss Contracts

(Energy Analytics Institute, Jared Yamin, 11.Jun.2016) – Officials from YPFB and its Paraguayan counterpart PetroPar meet with LPG distributors in Paraguay to evaluate the expansion of sales and purchase agreements.

“Actually, YPFB has contracts with Paraguayan LPG distributors that expire in August,” reported the daily newspaper La Razón, citing YPFB President Guillermo Achá. “The contracts guarantee 100 percent of the demand for the fuel in this country through production which comes from Bolivia’s Río Grande Separation Plant and the Gran Chaco Plant.”

Bolivia uses Mont Belvieu as its benchmark for establishing the price of its LPG, said Achá.

YPFB and PetroPar executives established a two-month work timetable — starting July 1, 2016 — in which to establish topographic work in four cities in Paraguay, establish a final design for a gas network and supply Bolivian LPG to Paraguay for use among domestic and industrial users.

***

Shell Announces Return to Bolivia

(Energy Analytics Institute, Jared Yamin, 8.Jun.2016) – Royal Dutch Shell, which ceased to operate in Bolivia in June of 2008, has laid out exploration and exploitation plans for the small land-locked South American country.

Shell, via BG Bolivia, announced plans to invest millions to focus on exploration activities at the Huacareta field located in Tarija department and exploitation activities the Caipipendi block in the Margarita-Huacaya department between the Chuquisaca and Tarija departments, reported the daily newspaper La Razón. Exact amounts to be invested were not revealed.

Bolivia contains large resources and has legal security, which makes it attractive for companies such as Shell to work with the country, reported the daily, citing Bolivia’s Hydrocarbon and Energy Minister Luis Sánchez.

“The principal objective of Shell in Bolivia is to continue with exploration activities in the Huacareta area,” reported the daily, citing Shell Executive Vice President De la Rey Venter.

“The presence and return of Shell to Bolivia justifies” what minister Sánchez has said about Bolivia, said Venter.

***

Bolivia to Invest $21.4 Bln in Hydro-Electric Projects

(Energy Analytics Institute, Jared Yamin, 7.Jun.2016) – Bolivia plans investments of $21.350 billion on hydroelectric projects that have potential to generate an estimated 8,575 megawatts (MW) of energy.

Bolivia is living an “energy revolution,” reported the daily newspaper La Razón, citing the country’s Hydrocarbons and Energy Minister Luis Sánchez. The investments will be carried out by Bolivia’s National Electricity Company (ENDE by its Spanish acronym), including basic studies, construction, studies and the final design of hydrocarbon projects, said Sánchez.

Some of the projects include, but are not limited to:

Misicuni (120 MW; $139 million investment);

Miguillas (200 MW, $447 million investment);

San José (124 MW);

Rositas (400 MW);

Ivirizu (253 MW);

Banda Azul (93 MW);

Huacata (6 MW);

Carrizal (347 MW); and

Molineros (132 MW).

Additionally, projects in the basic study phase and with potential to generate 1,500 megawatts include: Icona; Ambrosía; El Pescado; Aguas Calientes II; El Bala; the Río Grande Hydroelectric Complex; and Binacional with Brasil Río Madera.

***

Central Bank Approves Funding Plant in Yacuiba

(Energy Analytics Institute, Jared Yamin, 7.Jun.2016) – Bolivia’s Central Bank approved a credit for YPFB for 12,858.26 million Bolivian bolivianos to finance construction of a propylene and polypropylene plant in Yacuiba in Tarija department, reported the daily newspaper La Razón.

***

YPFB to Sign Contracts with YPF and Petrobras

(Energy Analytics Institute, Jared Yamin, 7.Jun.2016) – YPFB plans to sign exploration contracts with its Argentine and Brazilian counterparts in July.

YPFB will sign exploration agreements with its Argentine counterpart YPF for the Charagua, Abapó and Yuchan areas and agreements with its Brazilian counterpart Petrobras for the San Telmo and Astillero áreas, reported the daily newspaper La Razón, citing YPFB President Guillermo Achá.

The San Telmo and Astilleros areas cover an extension of close to 210 hectares, reported the daily.

***

YPFB Has Capacity to Produce 61 MMcm/d

(Energy Analytics Institute, Jared Yamin, 6.Jun.2016) – Bolivia has the capacity to produce 61 million cubic meters per day of natural gas to cover demand in the internal market and for export.

Natural gas supply to cover demand in Bolivia as well as agreements with Brazil and Argentina totals 56 million cubic meters per day, reported the daily La Razón, citing Bolivia Hydrocarbon and Energy Minister Luis Alberto Sánchez.

Supply to Brazil is actually 24 million cubic meters per day — the minimum established under a gas supply agreement between Bolivia and Brazil — while supply to Argentina is 19.9, reported the daily, citing YPFB President Guillermo Achá.

“We could reach 60 or 61 million cubic meters per day to supply our two export markets as well as domestic demand,”said Achá. “We are trying to optimize the supply to Argentina, considering the transport capacity that the country has.”

***

Bolivia Has 40,000 MW Hydroelectric Capacity

(Energy Analytics Institute, Jared Yamin, 5.Jun.2016) – Bolivia has capacity to generate 40,000 megawatts of energy from hydroelectric projects.

“According to studies from international organizations Bolivia has capacity to generate 40,000 megawatts of energy from its hydroelectric plants,” reported the daily La Razón, citing Bolivia’s President Evo Morales.

Bolivia plans investments of $21.350 billion to generate 8,575 megawatts of hydroelectric energy through 2025. The country expects to have an excess of 10,000 megawatts that can be destined for export markets, according to Morales.

***

YPFB Guarantees LPG Supply in Santa Cruz

(Energy Analytics Institute, Jared Yamin, 2.Jun.2016) – YPFB plans to increase the number of LPG cylinders in Santa Cruz to 45,000 per day from 37,000 per day in order to satisfy demand in Santa Cruz, reported the daily newspaper La Razón, citing YPFB President Guillermo Achá.

“During the colder months demand increases, this is normal,” said Achá. “That is why we are taking precautions with the increase in LPG cylinders to 45,000 from 37,000 per day.”

***

YPFB to Boost LPG Supply During Winter Period

(Energy Analytics Institute, Jared Yamin, 25.May.2016) – YPFB will increase the supply of LPG cylinders to an average 158,000 per day from 130,000 per day to guarantee supply of the product during the winter period which runs through August and potentially September.

The priority is to supply the internal market first, reported the daily newspaper La Razón, citing YPFB President Guillermo Achá.

YPFB plans to supply LPG to the following regions: La Paz (45,000 per day), Cochabamba (29,000), Santa Cruz (48,000), Oruro (8,100), Potosí (8,000), Chuquisaca (8,000), Tarija (7,500), Beni (3,500) and Pando (900).

***

Value of Bolivian Gas Exports Up 867%

(Energy Analytics Institute, Jared Yamin, 23.May.2016) – Bolivia’s natural gas exports reached $3.771 billion in 2015, up 867 percent compared to just $390 million in 2003, reported the daily newspaper El Diario, citing data from a report published by Bolivia’s Foreign Commerce Institute (IBCE by is Spanish acronym).

Gas export revenues – principally to Brazil and Argentina — reached a peak value of $6.113 billion in 2013, up 1,567 percent compared to 2003, according to the daily. Exports to Brazil have represented an average 79 percent of the total exports during 2003-2015, with the remaining 21 percent belonging to Argentina.

***

Bolivia to Send Energy from Santa Cruz to Beni

(Energy Analytics Institute, Jared Yamin, 23.May.2016) – Bolivia’s National Electricity Company plans to send energy from Santa Cruz to Marbán del Beni to benefit communities in the area.

Energy from Santa Cruz will benefit 15 communities such as Remanso del Paraíso, San Pedro, San Isidro, 15 de Octubre, among others.

The long-term plan is to provide energy to more communities in the future, reported the daily La Razón, citing Socialist Movement lawmaker Walter Roque.

***

Enarsa to Import Gas From Chile

(Energy Analytics Institute, Jared Yamin, 23.May.2016) – Argentina’s state oil company Enarsa signed a contract to purchase natural gas from Chile at a price 53 percent higher than the LNG that arrives to Chile on tankers and 128 percent higher than what is pays for imports from Bolivia, reported the daily El Diario.

“Bolivia sends gas to Brazil and Argentina but does not have any more,” reported the daily La Razón, citing Energy Minister Juan José Aranguren. “Today, Argentina imports gas from Bolivia at $3/MMbtu, but will import gas from Chile at $7/MMbtu.”

The purchase of gas from Chile at $7/MMbtu will allow Argentina to save $46 million through the displacement of gasoil that it would have to buy at $10/MMbtu to generate electricity, said the minister.

Argentina will commence importing gas from Chile using the same gas pipelines that it used until 2006 to export gas to Chile, reported La Razón.

“We are replacing a product that costs us $10/MMbtu with another that costs us $7/MMbtu,” said Aranguren. “Obviously it is more than $3/MMbtu but there is not enough (Bolivian) gas.”

***

Lawmaker Wants Investigation into Brazil-Bolivia Deals

(Energy Analytics Institute, Jared Yamin, 23.May.2016) – Brazil’s Vice President of Foreign Affairs and Deputy in the Brazil National Defense Chamber of Brazil Luis Carlos Auli announced he wants an investigation into contracts signed between Bolivia and Brazil’s Working Party under presidents Luis Inácio Lula Da Silva and Dilma Rousseff.

The lawmaker also wants an investigation into former Bolivian Senator Roger Pinto, reported the daily newspaper El Diario.

***

Bolivia Exported 24 MMcm/d to Brazil

(Energy Analytics Institute, Jared Yamin, 19.May.2016) – Bolivian exports to Brazil reached 24 million cubic meters per day on May 12, 2016 compared to 30 million cubic meters per day on May 8, 2016 while exports to Argentina reached 19 million cubic meters per day, up compared to 14 million cubic meters per day, respectively, reported the daily newspaper El Diario.

***

Rousseff Issues Will Not Affect Gas Deals

(Energy Analytics Institute, Jared Yamin, 18.May.2016) – The political situation that is affecting Brazil with the suspension of its President Dilma Rousseff will not affect negotiations with Bolivia regarding a natural gas sales and purchase agreement.

“Brazil has a need to supply its market with Bolivian gas and over time it’s foreseeable that we will maintain our agreements,” reported the daily newspaper La Razón, citing YPFB President Guillermo Achá.

Bolivia is concentrating efforts on additional exploration projects to continue fulfilling its contracts with Argentina and Brazil after fulfilling demand in the domestic market, said Achá.

A sales and purchase agreement — which expires in 2019 – establishes that Bolivia supply up to 31.5 million cubic meters per day of natural gas to Brazil.

***

YPF to Participate In Two Areas in Bolivia

(Energy Analytics Institute, Jared Yamin, 9.May.2016) – YPF has plans to participate in the Boyuibe and Ibibobo areas in Bolivia, reported the daily newspaper La Razón, citing Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez. The company is close to closing deals related to these activities.

***

Repsol Visits Bolivia to Discuss Investments

(Energy Analytics Institute, Jared Yamin, 9.May.2016) – Repsol President Antonio Brufau visited Bolivia to discuss overall investments in the small landlocked country with officials from YPFB and investments in three areas with similar potential as that in the Margarita field.

The three areas include Boyuy, Ipaguazu and Boycobo and contain an estimated 4 Tcf of natural gas, reported the daily newspaper La Razón, citing Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez.

***

Total to Boost Output in Bolivia by 6.7 MMcm/d

(Energy Analytics Institute, Jared Yamin, 9.May.2016) – France’s Total plans to boost natural gas production by 6.7 million cubic meters per day at Aquio Incahuasi.

The French company also plans to take part in the second phase of activities at the field whereby it plans to boost output there by another 6.7 million cubic meters per day, reported the daily newspaper La Razón, citing Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez.

***

Ende, Siemens Sign $397.5 Mln Contract in Bolivia

(Energy Analytics Institute, Jared Yamin, 9.May.2016) – Bolivia’s National Electricity Company signed a contract with Siemens AG for $397.5 million to boost energy production in Termoeléctrica del Sur to 480 megawatts from 160 megawatts.

The project includes purchase of four gas turbines and four steam turbines with the addition of an estimated 320 megawatts with the idea to reach 480 megawatts at completion, reported the daily newspaper La Razón.

Recently, ENDE and Siemens signed a contract on May 5, 2016 for the Entre Ríos thermoelectric plant with the idea to boost output from 100 megawatts to 480 megawatts over two years with an investment of $378 million.

On April 28, 2016, ENDE and Siemens signed a contract for $392.5 million to boost output at the Warnes thermoelectric plant from 200 megawatts to 480 megawatts over two years.

Bolivia has announced plans to boost output at three thermoelectric plants – Termoeléctrica del Sur, Entre Ríos and Warnes – with an anticipated investment of $1.168 billion to produce 1,440 megawatts of energy.

***

Bolivia to Invest $2.4 Bln in 86 Projects

(Energy Analytics Institute, Jared Yamin, 4.May.2016) – YPFB is planning activities in 86 exploration projects in 63 areas which will require an estimated investment of $2.4 billion, reported the daily newspaper La Razón, citing Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez.

***

YPFB Corp. Reports 72% Drop in Profits

(Energy Analytics Institute, Jared Yamin, 4.May.2016) – YPFB Corporation reported profits of $364.1 million in 2015, down 72 percent compared to $1,299.5 million in 2014, reported the daily newspaper La Razón, citing YPFB data.

Table 1: YPFB Corp. Profits 2016-2020 ($ Mlns)

Year —- Profits

2006 —- $214.8

2007 —- $419.2

2008 —- $1,062.4

2009 —- $521.0

2010 —- $771.8

2011 —- $858.8

2012 —- $1,212.5

2013 —- $1,373.2

2014 —- $1,299.5

2015 —- $364.1

Source: YPFB

During 2006-2015, YPFB profits peaked at $1,373.2 million in 2013 and reached a low of $214.8 million in 2006, according to the data.

***

Bolivia Hydrocarbon Sector Investments 2016-2020

(Energy Analytics Institute, Jared Yamin, 4.May.2016) – With oil prices below $50 per barrel, YPFB plans investments of $12.681 billion during 2016-2020 under its Economic and Social Development Plan (PDES by its Spanish acronym) with assistance from private operators.

The majority of the investments, $7.2 billion or 57 percent of the total, will be destined for exploration and production activities in a move to boost production, reported the daily newspaper La Razón, citing an interview the daily conduced with YPFB President Guillermo Achá.

Potential

“Bolivia has important reserve potential with more than 60 Tcf of natural gas,” said Achá.

Table 1: Bolivia Hydrocarbon Sector Investments 2006-2015 ($ Mlns)

Year —- Investment

2006 —— $273

2007 —— $299

2008 —— $384

2009 —— $612

2010 —— $782

2011 —— $1,292

2012 —— $1,593

2013 —— $1,835

2014 —— $2,111

2015 —— $1,945

Source: YPFB

Bolivia’s earnings in the hydrocarbon sector are based on operating contracts whereby the state’s take away is an average 75-80 percent with the remaining 20-25 percent going to private companies, said the official.

“In many contracts that average is above 80 percent for the state,” said Achá.

***

Bolivia Starts Warnes Thermoelectric Plant

(Energy Analytics Institute, 9.Oct.2015) – The Warnes Thermoelectric Plant, located in Bolivia’s Santa Cruz department, will provide 200 megawatts (MW) of energy to the country’s electric grid during its first phase of operations, according to a statement posted on the website of Bolivia’s Vice Presidency.

To-date, $171 million has been invested in the plant and another $400 million is planned to be invested in it in the future.

The plant, which will consume 50 million cubic feet per day (MMcf/d) of natural gas, will reach a capacity of 480 MW after the four planned phases of development are finalized.

***

Lliquimuni Well Results by November 2015

(El Diario, 17.Sep.2015) – Results from the Lliquimuni exploration well are expected to be ready in late-October or early-November, reported the daily newspaper El Diario, citing Bolivia’s energy minister Luis Alberto Sánchez.

Investments in the well — to be drilled to a total depth of approximately 3,200 meters — are expected to approximate $47.5 million while the reserve potential is estimated at 50 million barrels (MMbbls) of oil and 1 trillion cubic feet (Tcf) of gas.

***

Argentina Seeks to Import 200MW from Bolivia

(Energy Analytics Institute, Ian Silverman, 24.Mar.2015) – Argentina is considering importing 200 megawatts of energy from Bolivia in 2015, announced Bolivia’s President Evo Morales.

The official also announced Brazil was also requesting more energy, without providing details, reported the daily newspaper La Razón.

“Perhaps this year we are going to start to export those 100 to 200 megawatts that Argentina is requesting,” said Morales during a visit to Cochabamba.

Bolivia has the capacity to export 100 megawatts of energy to Argentina and could slowly increase this capacity as projects come online, said Bolivia’s Hydrocarbon Minister Juan José Sosa Soruco on September 8, 2014.

“At this moment we cannot put our generation system at risk, so we can only consider 100 megawatts this year,” said Sosa. “By 2020 it is possible that we could be exporting 1,000 megawatts.”

Bolivia’s energy reserves are expected to increase this year from 300 megawatts to 500 megawatts with the Warnes thermo-electric plant in Santa Cruz department, according to a March 2, 2015 report from National Electricity Company (ENDE Corporación) President Eduardo Paz.

At the moment maximum electricity demand is 1,298 megawatts while the installed generating capacity on the National Interconnected System (SIN) or electricity grid is 1,600 megawatts, which leaves about 300 megawatts available, according to Paz.

“Our available resources for export are 300 megawatts now but with the addition of the Warnes plant his figure will increase to 500 megawatts,” said Paz. With the addition of the 200 megawatts from the Warnes project, Bolivia will be able to increase the capacity on the SIN to 1,800 megawatts.

During Morales’ nine year tenure as president, the capacity on the SIN has increased to 1,200 megawatts from 700 to 800 megawatts when he first entered office, the official said from Cochabamba.

Bolivia is working on the Yacuiba-Tartagal (Bolivia-Argentina) transmission line whereby it will be able to export excess energy to Argentina, said Morales.

***

Bolivia Aims to Export Energy to Brazil, Peru

(Energy Analytics Institute, Ian Silverman, 24.Mar.2015) – Bolivia is considering exporting energy to Brazil and Peru, reported the daily newspaper La Razón, citing National Electricity Company (ENDE Corporación) National and Export Development Stratgies Manager Roberto Peredo.

***

Bolivia Wants to Build Relations with the USA

(Energy Analytics Institute, Ian Silverman, 15.Mar.2015) – We want to build relations with the United States based on respect, announced Bolivia’s Vice President Alvaro García Linera.

“When we got into to power, we had open relations with the United States which were friendly and based on confidence. We would like to return to this relationship. In the last 10 years Bolivia has increased commercial relations with the United States, but we have not seen such activity with diplomats. Until the United States shows us respect, we will continue to maintain a hard line with them,” reported the daily newspaper El Pais, citing the official.

***

LatAmNRG: Heard on the Street 3Q:13

(Energy Analytics Institute, 30.Sep.2013) – Information in this section, provided by Energy Analytics Institute editors and reporters, is hearsay and thus should be treated as such.

The names of our many sources have been withheld to protect their identities and family members in Venezuela.

COMBUSTIBLES
  • A number of gasoline stations along VenezuelaColombia border remain closed due to a lack of supply. [El Universal]
CORPORATE SUITE
  • Venezuelan Oil Minister and PDVSA President Rafael Ramirez was named as Venezuela’s Economic Vice President by President Nicolas Maduro. [EAI]
CROSS BORDER DEALS
  • T&T and Venezuela signed a cross border natural gas deal. Deal signed by Venezuelan Oil Minister Rafael Ramirez and Trinidad Energy Minister Kevin Ramnarine. [EAI]
  • Trinidad Energy Minister Kevin Ramnarine was been under pressure in Trinidad for recent agreements reached with Venezuela regarding cross-border commercialization deals for the Loran-Manatee gas fields. [EAI]
  • Central American energy connection could reduce prices from Guatemala to Panama. [El Espectador]
DISCOVERIES
  • Colombia’s state oil company Ecopetrol announces new oil discovery at Guainiez-1 well in Guaroa. [EAI]
DIVESTMENTS
  • Chile’s ENAP sells 49% interest in Primax Peru and Primax Ecuador for $312 mln. [El Universo]
ELECTRIC SECTOR
  • YPFB Corp. completed 23,141 domestic gas connections in May.2013. [La Razon]
  • Interconexión Eléctrica S.A (ISA) wins bid for design, financing, construction, operation and maintenance of Encuentro-Lagunas project in Chile. [Portafolio.co]
  • Peru’s Energy and Mining Ministry has identified hydrocarbon and electric sector projects worth $26,530 mln thru YE:20. [El Comercio.pe]
  • Electric consumption in Uruguay reaches 1,808 MW on Jun.20.2013 up from record of 1,745 MW achieved on Jul.4.2011. [El Pais]
EXPLORATION & PRODUCTION
  • Bolivian officials search for hydrocarbon investments and technology at Russian Gas Forum [La Razon]
  • Gas output in Bolivia reached 57.08 MMcm/d in the 1Q:13, up 24.2% compared with 45.94 MMcm/d in the 1Q:12. [La Razon]
  • Bolivia’s average production was 56.2 MMcm/d in the first five months of 2013. [El Espectador]
  • YPFB plans investments of $8,406 mln during 2013-2016. [La Razon]
  • YPFB Petroandina SAM President Jaime Arancibia announced the Lliquimuni block could contain 1 Tcf. [La Razon]
  • France’s Total announced plans to develop the 3 Tcf Incahuasi field in Bolivia, after drilling the ICS-2 exploration well. [La Razon]
  • Russia’s Rosneft is interested in investing in exploration and development activities in Bolivia. [La Razon]
  • Repsol’s oil production in Bolivia rose to 3,400 b/d from 2,600 b/d. [La Razon]
  • Ecuador’s Hydrocarbon Secretariat expects oil production to average 518,503 b/d in 2013, up from 503,610 b/d in 2012. [EAI]
  • Ecuador’s Hydrocarbon Secretariat expects the country’s petroleum sector will realize investments of $3.6 bln in 2013, up from $2 bln in 2012. [EAI]
  • Extraction of oil in the Yasuni National Park will utilize new technologies, Wilson Pastor said on state television. [EAI]
  • Ecuador gov’t cancels $34.5 mln committed by Germany for the protection of the Yasuni National Park. [EAI]
  • Mexico’s state oil company Pemex creates company to search for oil deep offshore and shale gas in the USA.
  • Venezuela’s Oil Minister Rafael Ramirez said during an interview on Venezuelan state television or VTV that the decision to stop sending oil to the US had to be taken by Venezuelan President Nicolas Maduro. [EAI]
ENERGY REFORMS
  • Mexico’s left is betting on more autonomy for Pemex without changing the constitution.
EXPORT-IMPORT
  • Venezuela is looking for additional partner(s) for the Mariscal Sucre gas project offshore, Venezuelan Oil Minister Rafael Ramirez says. [EAI]
  • Spanish gov’t requests legal security and respect for the rules of the game in Argentina. [La Nacion]
  • Venezuelan imports of electricity from Colombia continue to increase. [El Universal]
  • Gas imported by Argentina and Brazil up 56.95% and 20.26%, respectively, in the 1Q:13 compared with the 1Q:12 [La Razon]
  • Argentina imported 14.63 MMcm/d from Bolivia in the 1Q:13 compared with 9.32 MMcm/d in the 1Q:12 [La Razon]
  • Brazil imported 32.01 MMcm/d from Bolivia in the 1Q:13 compared with 26.62 MMcm/d in the 1Q:12 [La Razon]
  • Bolivia exported an average 14.1 MMcm/d of gas to Argentina in the first five months of 2013. [El Espectador]
  • Bolivia exported an average 31.3 MMcm/d of gas to Brazil in the first five months of 2013. [El Espectador]
  • Enarsa owes YPFB $180 mln for gas deliveries made in Mar.2013 [La Razon]
  • PDVSA currently exports 330,000 b/d to India but plans to increase this figure to 400,000 b/d, PDVSA President Rafael Ramirez said. The official said PDVSA is also exporting 630,000 b/d to China. [EAI]
  • PDVSA owed $270 mln by Paraguay’s Petropar according to Paraguayan News Portal. [EAI]
FINANCE / EQUITY AND DEBT OFFERINGS

Colombia:

  • Ecopetrol $900 mln bond issue was oversubscribed by 3.1 times. [El Espectador]
  • Ecopetrol road show was led by Bank of America and visited fixed income investors in Singapore, London, Hong Kong, Chile and Peru. [El Espectador]
  • Ecopetrol road show led by Bank of America visited the following US cities: New York, Chicago, Los Angeles and Boston. [El Espectador]

Venezuela:

  • Venezuela’s Central Bank (BCV) holds auction for $330mm with PDVSA bonds.

Venezuelan Debt to China:

  • China has loaned Venezuela nearly $40 bln to date, excluding new agreements signed recently between the countries, of which $20 bln has been paid back. [EAI]
  • Venezuela currently owes $20 bln to China, which represents almost 2.4 months of PDVSA’s revenues assuming oil prices above $100/bbl. [EAI]
  • Assuming China were to lend Venezuela another $44 bln, the country would owe the Chinese nearly $64 bln, which is about 6 months of PDVSA revenue with oil prices above $100/bbl. [EAI]
  • Venezuelan debt of $64 bln to China would represent almost 7.7 months of PDVSA’s revenues assuming oil prices above $100/bbl. [EAI]

Peru:

  • Investments in energy projects in Peru to fall 50% by YE:20. [El Comercio.pe]

Ecuador:

  • China’s Industrial and Commercial Bank (ICBC) could finance 70% of Pacific Coast refinery project. [El Comercio]
GENERAL
  • Colombia’s National Hydrocarbon Agency (ANH) said the country’s oil reserves were 2,377 MMbbls at YE:12. [Portafolio.co]
  • S&P and Fitch raise rating on Emgesa ISA to BBB from BBB-. [Portafolio.co]
  • Chinese executives with LinYi Cake Trade Co. visited Bolivia to inspect the construction process and advances at a pilot lithium battery plant in La Palca in Potosi. [La Razon]
HEAVY OIL
  • Peru to prioritize $1,500 mln in investments for the integration of heavy oil lots in the northern amazon region [El Comercio.pe]
  • PDVSA has 15,000 workers in the Orinoco Heavy Oil Belt of Faja but plans to increase this figure to 40,000, PDVSA President Rafael Ramirez says. [EAI]
  • PDVSA, Cupet (Cuba) and Sonangol (Angola) agree to create JV to produce 20,000 b/d in the Faja. [El Nacional]
  • PDVSA reports in 10.Oct.2013 press release that it has a 71% interest in PetroCarabobo 1 Faja project, meaning the company assumed Petronas’ 11% interest. Partners in the PetroCarabobo 1 project now include PDVSA (WI 71%), OVL (WI 11%), OIL (WI 3.5%), OIC (WI 3.5%) and Repsol (WI 11%). [EAI]
  • Rising drilling costs in the Faja are just one of many issues companies are confronting today. [EAI]
  • Russia’s Lukoil announced plans to exit the Junin Block 6 project in the Faja.

EDITOR’S NOTE: Smaller Russian companies are starting to exit the Faja, ceding more control to Rosneft or other Russian entities; a signal that something could definitely be wrong in Venezuela and the Faja. [EAI]

  • PDVSA announced during the HOLA 2013 conference that it was looking to utilize its heavy oil techniques in Mexico. [EAI]
LAWSUITS
  • Repsol turns down $5,000 mln offer from Argentine gov’t regarding 51% interest expropriated in 2012. [La Nacion]
  • Ecuador’s President Rafael Correa says on Ecuadorian state television that US-based Chevron Corp. is an enemy of Ecuador. [EAI]
LNG
  • By 2015 Uruguay’s ANCAP expects to be exporting 5 MMcm/d of gas from the Puntos de Sayago regasification plant in Uruguay to Argentina’s YPF. [LaRed21]
PETROCHEMICALS
  • Peru to prioritize $3,500 mln in investments for the petrochemical industry. [El Comercio.pe]
PIPELINES
  • Peru to prioritize $3,500 mln in investments for the southern gas pipeline. [El Comercio.pe]
PROTESTS / STRIKES
  • About 50 workers with Petrocedeno JV in Venezuela demand that PDVSA respect their benefits [El Universal]
REFINERIES
  • Peru to prioritize $3,514 mln in investments for the modernization of the Talara refinery. [El Comercio.pe]

Venezuela:

PDVSA’s participation in Abreu e Lima Refinery in Brazil:

  • PDVSA President Rafael Ramirez says co. and Petrobras officials continue to discuss JV prospects regarding the Abreu e Lima refinery. [EAI]
  • From an operational and strategic business plan point of view, PDVSA’s participation in the Abreu e Lima refinery does not make sense. [EAI]
  • Abreu e Lima refinery in Pernambuco could easily source sufficient oil from the Brazil’s offshore pre-salt region w/o having to look to Venezuela for heavy oil. [EAI]
  • Any decision PDVSA President Rafael Ramirez takes regarding the company’s participation in Abreu e Lima refinery w/Petrobras will be politically based. [EAI]

Comments regarding Amuay Refinery explosion on 25.Aug.2012:

  • PDVSA President Rafael Ramirez says explosion at Amuay refinery was sabotage. Amuay refinery explosion was caused by gas leak at Block B23. As a result of the explosion, 42 persons were killed, 5 are still missing, 150+ were seriously injured. published by the Energy Orientation Center (COENER). [EAI]
  • Amuay refinery explosion to cost PDVSA an estimated $1.8 bln, according to COENER. The refinery is processing 645,000 b/d nearly 10 months after major explosion. [Ultimas Noticias]
  • PDVSA to spend an estimated $585 mln on maintenance activities at the Amuay and Cardon refineries, PDVSA President Rafael Ramirez says. [EAI]
SOCIAL
  • CITGO Corp. donates 625,000 energy saving light bulbs to families in 21 cities in the USA [PDVSA

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GTLI to Return Areas to YPFB

(Energy Analytics Institute, Ian Silverman, 11.Sep.2013) – Gas To Liquid International (GTLI) is in the process of returning four exploration areas to Yacimientos Petrolíferos Fiscales Bolivianos (YPFB).

There are 104 areas reserved for YPFB, reported La Razon, citing YPFB President Carlos Villegas. Of these areas, 53 have been designated for exploration activities while 51 are available for new contracts. Of the 104 areas, 76% have potential less than or equal to 0.5 Tcf, 17% have potential between 0.5-1 Tcf, and 7% have potential above 1 Tcf, YPFB said.

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Bolivia’s Nationalization of Oil and Gas

(Council on Foreign Relations, Carin Zissis, 12.May.2006) — In a region seen as turning leftward, forging alliances would seem a natural course of events. But Bolivian President Evo Morales’ decision to nationalize the oil and gas industry is exposing tensions, causing experts to say there is more diffusion than alliance-building in Latin America.

Introduction

On his hundredth day in office, Bolivian President Evo Morales moved to nationalize his nation’s oil and gas reserves, ordering the military to occupy Bolivia’s gas fields and giving foreign investors a six-month deadline to comply with demands or leave. The May 1 directive set off tensions in the region and beyond, particularly for foreign investors in Brazil, Spain, and Argentina. Morales’ nationalization agenda has been described as another chapter in Latin America’s turn to the left, and fears are rising that the Bolivian leader has fallen into the fold of Venezuela’s Hugo Chávez and Cuba’s Fidel Castro. But some experts emphasize there may be more infighting than cohesion overall in the region.

Why did Morales nationalize Bolivia’s hydrocarbon industry?

Morales, a former coca farmer and union leader, won a resounding victory in the December 2005 elections. As the Movement to Socialism (MAS) candidate, he campaigned in favor of nationalizing, among other sectors of the economy, the gas and oil industries with the cooperation of foreign investors. Experts say that, given such promises, the nationalization was no surprise. But Peter DeShazo, director of the Center for Strategic and International Studies’ Americas Program, says the move to occupy the gas fields with military forces lent a dramatic effect. “The confrontational nature of his move was certainly intended to get people’s attention,” he says, adding that Morales may be looking to garner votes in July elections for a constituent assembly that will redraft Bolivia’s constitution.

Nouriel Roubini, a professor of economics and international business at New York University, says one explanation for nationalization is ill will over encroachment on Bolivia’s territory by its neighbors. Since gaining independence in 1825, the Andean nation lost ocean access to Chile, as well as land to Brazil, Paraguay, and Peru. “There is this kind of historical resentment,” Roubini says, adding that Bolivians “are giving a slap in the face to Brazilians and Spaniards.” Morales echoed this sentiment at a May 11 summit of Latin American and European leaders, where he reaffirmed his energy-nationalization plans and signaled his government would seize large land holdings. Experts say this could also affect Brazil, whose farmers have major land holdings in Bolivia.

In spite of having the region’s second largest natural-gas reserves after Venezuela, Bolivia is among Latin America’s poorest nations. The landlocked country has also been marked by political instability; six presidents have held office in as many years, and one of them, Gonzalo “Goni” Sánchez de Lozada, was forced to resign in 2003 after protests against plans to export Bolivian gas turned violent. Among the free trader’s opponents was Morales, who said foreign investors received too much in gas-sale profits based on the hydrocarbons law in place at the time.

How will the nationalization plan work?

Morales’ May 1 decree states that foreign companies, which have invested almost $4 billion since Bolivia opened up its energy sector in the late 1990s, must hand majority control over to state-owned Yacimientos Petrolíferos Fiscales Bolivianos (YPFB). Firms have 180 days to renegotiate energy contracts with the Bolivian state, which experts say will likely lead to price increases. During that time, the companies which own the two largest oil fields will absorb a 32 percent hike (82 percent total) in royalties and taxes. Bolivia, which has 55 trillion cubic feet of natural gas, is expected to see a jump from $320 million to $780 million in annual oil-related revenues, and has installed new directors representing YPFB on the boards of foreign firms’ local subsidiaries. While negotiations occur, Bolivia will conduct an audit of the foreign companies. Morales recently warned foreign companies they will not be compensated if they have recovered their original investments.

Who stands to lose from the nationalization policy?

The firms with the largest holdings in Bolivia’s energy industry are the Spanish-Argentine venture Repsol YPF and Brazil’s Petrólio Brasileiro (Petrobras). Britain’s British Petroleum (BP) and France’s Total also have large investments. Repsol YPF has invested some $1.2 billion in Bolivia’s energy industry, and Argentina’s President Nestor Kirchner, whose country faces double-digit inflation rates, is concerned about rising gas prices jeopardizing Argentina’s economic recovery. But Brazil is under the greatest pressure if prices go up, as Bolivia provides it with about half of its gas. In the populous economic center of Sao Paolo that figure is closer to 75 percent. Petrobras has invested $1 billion in Bolivia’s natural-gas industry. Morales’ move has put Brazilian President Luiz Inácio Lula da Silva in a vulnerable position in the months leading up to his October reelection bid.

What are the reactions to Morales’ plan?

While foreign companies said they hope for cooperation, Repsol YPF has said it will act to protect its investments and take legal action if necessary. Petrobras has made similar threats and frozen investments. Experts say Bolivia needs investors such as Petrobras, which accounts for roughly 20 percent of the country’s gross domestic product (GDP) and 24 percent of its tax revenue. John Williamson, senior fellow at the Institute for International Economics, says Bolivia may see short-term gains but in the long term, it’s going to lead to less foreign investment. He also cautions that Morales’ move could cause divisions in the region.

Is Bolivia’s nationalization testing regional alliances?

Yes, say some experts. CFR Senior Fellow Julia Sweig says that Lula has been more silent in coming out against the nationalization than Spain’s President José Luis Rodríguez Zapatero because Lula—a former trade union leader like his Bolivian counterpart—is “sympathetic” to Morales’ intentions. Diego von Vacano, assistant professor of political science at Texas A&M University and a Bolivian national, says, “Lula wants to prevent a sort of face-off with Morales” because he “doesn’t want to destabilize the region.”

Yet, not all Latin American leaders who are leaning to the left are the same, experts say. “On one side, you have a number of administrations that are committed to moderate economic reform,” says Roubini. “On the other, you’ve had something of a backlash against the Washington Consensus [a set of liberal economic policies that Washington-based institutions urged Latin American countries to follow, including privatization, trade liberalization and fiscal discipline] and some emergence of populist leaders.” Among the latter group is Venezuela’s Chávez, an outspoken opponent of the Bush administration; DeShazo of CSIS calls Chávez Latin America’s “high priest” of economic nationalism.

What is Morales’ relationship with Chávez?

Just before the May 1 decree, Morales met with Chávez and Castro in Havana to sign a socialist trade agreement that made Morales a member of the Bolivarian Alternative for the Americas. The three are now calling it the “Axis of Good,” a pact originally signed by Chávez and Castro last year. Morales and Chávez threatened to pull out of the Andean Community if Colombia, Peru, and Ecuador sign free trade agreements with the United States. Castro and Chávez also said they would become Bolivia’s primary soybean importers. This plan may affect Brazil, because Morales has set a May 31 deadline for land redistribution in the Santa Cruz region, where Brazilian farmers grow more than a third of Bolivia’s soybeans and have invested heavily in land and agriculture.

But experts caution that it is not yet clear where Morales’ alliance falls. Sweig says “the embrace he’s getting from Chavez is getting harder and harder to resist,” but he also “understands that he has to function in a global context and not just an Andean one.” Sweig adds, “Bolivia is going to tack one way one day and one way the other.” There are also signs of infighting rather than a growth in alliances in the region. The Andean Community is not the only trading bloc with members threatening to bow out; in April, Uruguay warned it may leave Mercosur, the Southern Cone trading bloc, and suggested Paraguay is a partner on this. Williamson says the region “is more divided than I’ve ever seen it.” Sweig echoed this, saying, “I just don’t see the kind of diplomatic skill and institutional capacity to do alliance building. It’s not like the EU.”

What is the U.S. role in Bolivia and in the region?

Experts say the United States has paid less attention to Latin America after September 11, 2001, particularly as events have heated up in the Middle East. Meanwhile, Roubini says the situation in the region is “developing in such a way that is actually dangerous to U.S. interests.” According to Von Vacano, this period of crisis diplomacy between countries in the region would be a good time to become more engaged, and that the United States is “missing a chance to be a kind of broker, to get involved in South America without being heavy-handed.” Williamson says the United States should maintain an open hand to negotiate free trade agreements but “any U.S. influence is resented so much that it is counterproductive.” Sweig says the United States should tread carefully because intentions to influence outcomes can backfire. She points to Bolivia’s 2002 election, when the U.S. Ambassador Manuel Rocha urged Bolivians not to vote for Morales, who then surged in the polls and almost defeated Sánchez. The problem, Sweig says, “is when we say ’democracy,’ Latin Americans hear ’imperialism.’”

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