Oil companies in Bolivia call 2004 "a lost year"

Dec 19, 2004 01:00 AM

Oil companies operating in Bolivia are calling 2004 a lost year for investments in exploration and new projects because of "political ups and downs" but, in contrast, they noted the upswing in sales, which are expected to surpass $ 600 mm.
The Bolivian Hydrocarbons Chamber (CBH), which represents multinational firms like Petrobras, Repsol-YPF, British Gas and British Petroleum, reported that $ 190 mm was invested in the sector over the year, although initial plans had forecast the number at $ 255 mm. Some $ 281 mm was invested in 2003.
"That means that 2004 was the lowest investment year since 1997," the CBH said.

Oil companies believe the market was poorly influenced by the July 18 referendum on gas, and by possible amendments to the 1996 Hydrocarbon Law being debated in Congress.
One positive aspect to the year's activities in the sector, the CBH said, was increased energy exports to Brazil and the reopening of the Argentine market. Gas exports increased from a daily average of 15 to 22 mm cm (529 to 775 mm cf) between 2003 and 2004. However, Bolivia exported 26 mm cm (916 mm cf) per day in November, 4 mm cm (141 mm cf) of which were sent to northern Argentina.

According to the CBH, the value of natural gas exports will surpass $ 600 mm by the end of the year, compared to $ 380 mm in 2003. Taxes paid to the state are expected to be $ 450 mm this year, compared to $ 331 mm last year.
The daily production of oil and gasoline also grew by 18 %, to some 46,000 barrels in total, while total daily natural gas production increased 21 %, to about 34 mm cm (1.2 bn cf).

The CBH highlighted the possible gas deposit discovered in Santa Cruz province by French giant TotalFinaElf, but the entity noted that the deposit's exploitable potential remains subject to "good judicial conditions and acceptable legislation." Only four drilling companies are currently at work in Bolivia, although 30 were active two years ago. The CBH contrasted the situation with Argentina's Neuquen province, where more than 100 companies are drilling.
The oil sector is also less than optimistic when it comes to what 2005 may hold.
"It will be a difficult year to convince investors about new projects," the CBH said, because debates about legal reform will continue and a Constitutional Assembly will be summoned to propose additional changes in the sector.

Projects that are awaiting the new legal parameters include the exportation of gas to Argentina's future Gasoducto del Noreste Argentino, the establishment of firms near the Brazilian border to process the fuel and promoting an increase consumption in the auto sector, the CBH said. The national legislature will resume the debate next year on the hydrocarbons law, which has been criticized by the energy multinationals and even by the Bolivian administration.
On Nov. 17, Bolivia's lower house of Congress approved legislation providing for the unilateral modification of existing contracts with oil and gas companies. The bill provides for extracted oil and gas to be sold to the government at a price to be set principally by the state. Under current legislation and the companies' contracts, they sell the extracted products as they see fit.

If approved by the Senate, President Carlos Mesa has the option of signing the bill into law, vetoing it or sending it back to Congress with amendments. The government has argued that passage of the law as it now stands will result in a string of breach-of-contract lawsuits against Bolivia.
The Chamber of Industry and Commerce, based in the gas-rich eastern province of Santa Cruz, denounced the lower house's decision, with chamber director Oscar Ortiz saying that the measure "greatly complicates" Bolivia's role in the international community.
The bill has also met with staunch opposition from civic groups in the provinces of Santa Cruz and Tarija, both of which contain gas and oil fields.

Source: EFE via COMTEX
Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« November 2019 »
November
MoTuWeThFrSaSu
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30

Register to announce Your Event

View All Events