08-02-09 Bolivia's energy minister said the country expects to boost oil and natural-gas investment to $ 530 mm this year as ventures with Russia and Venezuela fill a void left by private investors. Gazprom, Russia's natural-gas exporter, agreed to develop deposits in Bolivia's gas-rich eastern lowlands, Bolivian Hydrocarbon and Energy Minister Saul Avalos said on Feb. 4 at his La Paz office. Venezuela and Bolivia's state oil companies plan to invest $ 240 mm to explore in Bolivia.
"The amount of investment this year is higher than before the nationalization," Avalos said.

Investment in the Andean nation dropped almost 80 % since President Evo Morales bought out refining assets and raised taxes to nationalize the gas and oil industries in October 2006. Investment fell to $ 120 mm in 2006, Morales's first year in office, from a peak of $ 580.8 mm in 1999.
The energy industry had forecasted $ 332 mm of energy investments in 2008. Bolivia has the second-biggest natural-gas reserves in South America after Venezuela. Natural-gas output dropped last year as state oil company YPF Bolivianos diverted resources to produce liquefied petroleum to meet domestic demand, the energy minister said.

Domestic shortages
Bolivia's domestic supply of liquefied petroleum gases, known as LPGs, fell short by about 50 tons a day from May to August, the Ministry's 2008 National Hydrocarbon Strategy said in a report. The government was unable to import to compensate for the deficit because of "logistical problems," Avalos said.
"Foreign investors are unenthusiastic about Bolivia, and there's no domestic investment either," said Walter Bayly, chief operating officer of Peru's largest financial-services company, Credicorp, in Lima. "Bolivia faces problems in the medium term." Bolivia aims to boost natural-gas production to about 46 mm cmpd from 40 mm cm this year, he said.

A joint venture between Bolivia's state oil company, YPF Bolivianos, and Venezuela's Petroleos de Venezuela started Oct. 28. The venture,called Petroandina, is exploring in seven locations in northern Bolivia. Venezuela's oil company, known as PdVSA, holds a 40 % stake while the Bolivian company owns the rest.
The president of Bolivia's state oil company, Santos Ramirez, was fired by Morales on Jan. 31 after congress began to investigate corruption charges. Ramirez denied the allegations at a Jan. 30 news conference in La Paz.

Ramirez is being investigated after a contractor was murdered allegedly attempting to enter a home of Ramirez's in-laws with $ 450,000. The contractor's company, Catler Uniservice SRL, agreed with YPF Bolivianos in July to build an $ 86 mm natural-gas processing plant.
Ramirez's replacement, Carlos Villegas, reaffirmed the government's intention to invest $ 1 bn in the state oil and gas producer to compensate for the shortage of outside investment. The "billion dollars will be used with complete transparency," Villegas said Feb. 2 at company headquarters in La Paz.

An estimated $ 149.5 mm was invested in Bolivia's oil and gas projects in 2007, according to a report from the Bolivia Hydrocarbon Chamber.
Avalos is the third energy minister in Morales's 3 years as president; Villegas is the sixth chief executive officer of YPF Bolivianos.