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.

***

#LatAmNRG

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.

***

#LatAmNRG

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.

***

#LatAmNRG

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.

***

#LatAmNRG

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.

***

#LatAmNRG

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.

***

Energy Analytics Institute (EAI): #LatAmNRG

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.

***

Energy Analytics Institute (EAI): #LatAmNRG

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.

***

Energy Analytics Institute (EAI): #LatAmNRG

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.

***

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.

***

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.

***

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.

***

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.

***

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.

***

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.

***

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.

***

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).

***

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.
***

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 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.

***

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.”

***

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.

***

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.

***

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.

***

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.

***

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.’”

***