BOLIVIA: Bolivia forced to reassess natural gas outlook as numbers on reserves fall

Record ID: 782978

  • Title: BOLIVIA: Bolivia forced to reassess natural gas outlook as numbers on reserves fall
  • Date: 16th April 2011
  • Summary: LA PAZ, BOLIVIA (APRIL 12, 2011) (REUTERS) VARIOUS OF GAS STATIONS VARIOUS OF WOMAN COOKING WITH NATURAL GAS IN THE STREET (SOUNDBITE) (Spanish) INCHAUSTE, SAYING: "The new [hydrocarbons] law has to adapt to the times we are living in, the current politics of the times. We can't cover our eyes and ignore it. There's been a nationalization and, at the same time, we have to confront the challenge that we're talking about 15 billion dollars of investment in YPFB in order to grow this multibillionaire industry between 2011 and 2015-- even without considering all the new, potential markets and without talking about an aggressive industrialization of gas in Bolivia. It's a lot of money."
  • Embargoed: 1st May 2011 13:00
  • Keywords:
  • Location: Bolivia, Plurinational State Of
  • Country: Bolivia
  • Topics: Domestic Politics,Energy
  • Reuters ID: LVABE25FAOOYQAF7J2CLFUIUZD9M
  • Story Text: Bolivia is reassessing their natural gas future after the government admitted proven gas reserves fell to 9.94 trillion cubic feet (TCF) as of December 2009, falling from 12.8 TCF that was reported four years earlier.
    The drop came from figures released by a reserves study by U.S. company Ryder Scott. The study found that the country's natural gas reserves, including probable and possible reserves, reached 19.92 TCF.
    According to the state oil company YPFB, the reduction will not put Bolivia's natural gas exports to Brazil or Argentina at risk.
    However, Cristian Inchauste, the head of YPFB's transportation department, said it will force Bolivia to take a closer look at its use of natural gas reserves.
    "This has been a grounding to reality in terms of how many reserves we have today. We are talking about reserves, probable and possible reserves, of 19.5 trillion cubic feet. When we look at our current demand - a contract with Brazil, Argentina, the domestic market, and development - we can supply the demand until 2026. So this has forced us to reflect on how we are using our gas reserves, what we are going to do if we find more natural gas, and what are we going to between now and then in the areas of exploration and production," Inchauste said.
    The presentation of the report had been delayed from the middle of last year when YPFB said that Ryder Scott's work would have to be analyzed before being released. In recent months a series of leaks indicated that the report would show that Bolivia's reserves had fallen.
    As part of his drive to 'refound' Bolivia in the name of its poor, indigenous majority, President Evo Morales nationalized the oil and gas industry in 2006. The move froze some international investments, and Inchauste said it's important to encourage investment as lawmakers hash out new parameters for a new bill.
    "The new [hydrocarbons] law has to adapt to the times we are living in, the current politics of the times. We can't cover our eyes and ignore it. There's been a nationalization and, at the same time, we have to confront the challenge that we're talking about 15 billion dollars of investment in YPFB in order to grow this multibillionaire industry between 2011 and 2015-- even without considering all the new, potential markets and without talking about an aggressive industrialization of gas in Bolivia. It's a lot of money," Inchauste added.
    Last month, the Morales administration said they would invest $6.5 million between now and 2015, and they hope international oil companies working in the country like Petrobras, Repsol, Total E&P and Canadian Energy will increase investments.
    Energy analyst Bernardo Prado said Bolivia needs to secure that it has a sufficient amount of natural gas.
    "I think it is an interesting idea to look at plans to transport gas through Peru, Brazil, Chile or wherever, but we first need to have the proven resources and the capacity to supply our own market, our commitments and potential new markets," he said.
    And Prado added that without the money, Bolivia could run dry.
    "Supposing that we only have these 9.94 trillion cubic feet and there is no investment, that will be the end of the story. The gas will run out and there will be no more replacement reserves. I am still waiting to see where we are going to get three billion dollars for our exports," he said.
    Exports of Bolivian natural gas to Brazil and Argentina increased 18.5 percent in 2010 to an average of 32 million cubic meters a day, YPFB said in February.
    Revenues from natural gas exports soared 42 percent to $2.8 billion in 2010, as the price of Bolivian natural gas rose last year in line with international fuels prices.
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