Bloomberg: Petrobras and Bolivia Plan Joint-Venture
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Petrobras and Bolivia Plan Joint-Venture Gas, Fuel Partnerships
Feb. 11 (Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, and Bolivia plan to create joint- ventures to increase Bolivia's control of its energy assets while securing Brazilian supplies of natural gas.
Rio de Janeiro-based Petrobras, the Bolivian Hydrocarbon Ministry and Yacimientos Petroliferos Fiscales Boliviano, Bolivia's state oil company expect to sign an agreement this month, Petrobras said in a statement sent by e-mail last night.
Bolivian President Evo Morales won election last year on a promise to force Petrobras and other foreign companies to cede control of energy assets and pay more for oil and natural gas. Petrobras, which has invested more than $1.5 billion in Bolivia since 1995, runs Bolivia's refineries. It also produces half of Brazil's natural gas in Bolivia, a supply that was cut during protests last year.
``The meetings with the Bolivian authorities confirm the chance that the two sides will reach an agreement that will lead to a way to live together in a mutually advantageous, sustainable and binding way,'' Petrobras President Jose Sergio Gabrielli said in the statement. The agreement would allow Petrobras to increase investment in Bolivia, he said.
Petrobras, Bolivia and YPF-B have agreed to negotiate joint venture agreements in refining and oil and gas exploration and development. They are also working on the development and use of ethanol and other fuels made from biomass and considering the installation of a petrochemical complex on the Brazil-Bolivia border and a natural gas distribution facility in Bolivia, for use in vehicles, according to the statement.
Morales's Plan
Petrobras already is engaged in most of these activities in Bolivia. Morales, following the lead of Venezuelan President Hugo Chavez, wants to convert most foreign oil company operations into joint ventures with YPF-B. A call today to Morales's offices in La Paz wasn't answered.
Brazil is in a good position to negotiate with Morales because Bolivia depends as much on Brazil as Petrobras and Brazil depend on Bolivia, Ildo Sauer, head of Petrobras' natural gas unit and a member of the team negotiating with Bolivia, said in an interview in Rio de Janeiro Feb. 7.
Petrobras, produces all of Bolivia's gasoline and 60 percent of its diesel fuel. Petrobras imports about 27 million cubic meters of natural gas a day from Bolivia. Brazil, though, is Bolivia's only major natural gas client.
Spain's Repsol YPF SA cut its reserves by 1.25 billion barrels, a quarter of its total, on Jan. 26 because of higher taxes in Bolivia and falling Argentine production. Repsol, which had the largest reserves in Bolivia is under the same pressure from Morales to renegotiate its operations in the country.
Petrobras shares fell 1.20 reais, or 2.8 percent, to 41.35 reais in trading yesterday in Sao Paulo.
To contact the reporter on this story:
Jeb Blount in Rio de Janeiro at jblount@bloomberg.net
Feb. 11 (Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, and Bolivia plan to create joint- ventures to increase Bolivia's control of its energy assets while securing Brazilian supplies of natural gas.
Rio de Janeiro-based Petrobras, the Bolivian Hydrocarbon Ministry and Yacimientos Petroliferos Fiscales Boliviano, Bolivia's state oil company expect to sign an agreement this month, Petrobras said in a statement sent by e-mail last night.
Bolivian President Evo Morales won election last year on a promise to force Petrobras and other foreign companies to cede control of energy assets and pay more for oil and natural gas. Petrobras, which has invested more than $1.5 billion in Bolivia since 1995, runs Bolivia's refineries. It also produces half of Brazil's natural gas in Bolivia, a supply that was cut during protests last year.
``The meetings with the Bolivian authorities confirm the chance that the two sides will reach an agreement that will lead to a way to live together in a mutually advantageous, sustainable and binding way,'' Petrobras President Jose Sergio Gabrielli said in the statement. The agreement would allow Petrobras to increase investment in Bolivia, he said.
Petrobras, Bolivia and YPF-B have agreed to negotiate joint venture agreements in refining and oil and gas exploration and development. They are also working on the development and use of ethanol and other fuels made from biomass and considering the installation of a petrochemical complex on the Brazil-Bolivia border and a natural gas distribution facility in Bolivia, for use in vehicles, according to the statement.
Morales's Plan
Petrobras already is engaged in most of these activities in Bolivia. Morales, following the lead of Venezuelan President Hugo Chavez, wants to convert most foreign oil company operations into joint ventures with YPF-B. A call today to Morales's offices in La Paz wasn't answered.
Brazil is in a good position to negotiate with Morales because Bolivia depends as much on Brazil as Petrobras and Brazil depend on Bolivia, Ildo Sauer, head of Petrobras' natural gas unit and a member of the team negotiating with Bolivia, said in an interview in Rio de Janeiro Feb. 7.
Petrobras, produces all of Bolivia's gasoline and 60 percent of its diesel fuel. Petrobras imports about 27 million cubic meters of natural gas a day from Bolivia. Brazil, though, is Bolivia's only major natural gas client.
Spain's Repsol YPF SA cut its reserves by 1.25 billion barrels, a quarter of its total, on Jan. 26 because of higher taxes in Bolivia and falling Argentine production. Repsol, which had the largest reserves in Bolivia is under the same pressure from Morales to renegotiate its operations in the country.
Petrobras shares fell 1.20 reais, or 2.8 percent, to 41.35 reais in trading yesterday in Sao Paulo.
To contact the reporter on this story:
Jeb Blount in Rio de Janeiro at jblount@bloomberg.net
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