Magazine article Washington Report on the Hemisphere

Bolivia

Magazine article Washington Report on the Hemisphere

Bolivia

Article excerpt

Officials in La Paz reported that Petrobras, the Brazilian state-owned oil company, invested up to $2.057 billion USD to develop new natural gas fields in Bolivia's hydrocarbon rich Tarija district. As part of a 15-year plan, Petrobras will continue to invest additional development funds in exploration, production, transport, and storage in tandem with the Russian gas producer Gazprom and nationally operated Yacimientos Petrolíferos Fiscales Bolivianos (YPFB). Drilling prospections will begin in the Sunchal, San Telmo, and Astillero areas, which hold estimated gas reserves of 4.88TÍ3 (138Bm3). YPFB expects Petrobras to begin seismic data collection in the region around the end of this year, and to start production in San Telmo as soon as possible. YPFB chief executive, Guillermo Achá, said in a statement "the new areas will allow the Bolivian government to increase its reserves and consolidate the Tarija department as Bolivia's energy center." When asked about the imminent decline in natural gas output due the lack of recent discoveries, he affirmed that all activities only indicate an increase in gas production, not a decline.

This recent development comes as a surprise in the backdrop of falling hydrocarbon prices and the expectation of decreased investment in the natural gas exploration sector. Just last month, the energy consulting company Wood Mackenzie predicted that there would be a 30 percent reduction in global spending for oil and gas exploration this year. However, companies have continued investing in exploration despite this estimate, as a result of contracts that prevent companies from immediately modifying their budgets. Brazil also increased its oil and gas discoveries in the first quarter of 2015 by 33 percent, uncovering 24 new accumulations, 16 of which were located on blocks operated by Petrobras. Although Brazil is Bolivia's main importer of natural gas, Brazil's primary interest in Bolivian reserves becomes clear, as it seeks to increase its natural gas supply in order to meet the rising fuel demands for Brazilian thermoelectric power plants. …

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