Bolivia is aiming for $ 11.3 bn in oil and gas investments over next 5 years

Bolivia's government now wants $ 11.3 bn investment in the country's oil and gas sector over the next five years, boosting production to 74 mm cmpd, the head of the state oil company, Yacimientos Petroliferos Fiscales Bolivianos, or YPFB, has said. Of that total, YPFB will invest around $ 7 bn, from a variety of different sources, Carlos Villegas has told.
YPFB's subsidiaries will reinvest profits and will also take on debt in local and international markets, Villegas said. There will also be inter-government transfers, such as the $ 1 bn recently lent by the central bank, he said.

With supply and transport running at about capacity, the challenge is to develop the production and infrastructure to be able to supply another 21.7 mm cmpd which has been committed to Argentina, Villegas said.
Bolivia is currently producing nearly 43 mm cmpd, of which 6 mm cmpd are consumed in Bolivia and a similar amount is exported to Argentina. The remaining 30 mm cmpd is exported to Brazil.

Talks with Argentina have been on and off for a number of years, but Villegas said he met with Argentine Planning Minister Julio de Vido and they agreed to resolve the remaining issues within the next few weeks.
To upgrade the connection to Argentina, both countries need to invest in two relatively small pipelines. Bolivia has to build a 20 km pipeline at a cost of about $ 34 mm to link Margarita to Madrejones on the border, Villegas said, adding that construction should begin in December. Argentina must build a 40 km pipeline from Madrejones to the Refinor refinery in Campo Duran, he said.

On the production side, a number of investment projects have been announced to up Bolivia's output to be able to supply the Argentine contract. The three companies operating the Caipipendi block, Spain's Repsol-YPF, Argentina's Pan American Energy and BG, will invest $ 1.6 bn through 2014 to increase production, Villegas said.
The Itau field, operated by France's Total, Brazil's Petroleo Brasileiro (Petrobras) and BG, is scheduled to start producing 1.4 mm cmpd from mid-2010. Villegas said that will rise to 2 mm cm initially and eventually to 7 mm.

It's a relatively simple start-up process because Itau production will be transported using existing infrastructure on the neighbouring San Alberto gas field, operated by Petrobras.
The investment program covers the entire chain, from exploration to processing, Villegas said. To be able to extract as much value from Bolivia's mammoth natural gas reserves before it's shipped abroad, Bolivia is planning to build a natural gas refinery, a gas-to-liquids plant and a urea production plant. YPFB plans to tender the engineering projects for the three plants in early January, Villegas said.

Bolivia is also planning to undertake a major exploration program over the next few years to be able to add reserves and increase production. YPFB is looking for partners for 16 exploration blocks, and is in the process of inviting companies, Villegas said. Companies including China National Petroleum Corporation and PetroVietnam have expressed an interest in investing in Bolivia, he said.
Petroleos de Venezuela, or PdVSA, is already exploring one oil block and two gas blocks through its Petroandina unit, Villegas said.

YPFB is also planning to establish a joint venture with Russia's Gazprom and Total to explore the Azero block, Villegas said.
By mid-November the partners could start putting the new company together for work to begin sometime in 2010, he said.