LA PAZ – Brazilian state-controlled oil giant Petrobras signed a memorandum of understanding on Tuesday with Bolivian state energy firm YPFB, a step toward future natural gas exploration in three areas of the southern region of Tarija.
Petrobras’s representative in Bolivia, Erick Portela, and YPFB chief Guillermo Acha signed the contract in a ceremony in the city of Tarija.
The MOU is a prelude to an eventual contract for the San Telmo, Sunchal, and Astillero blocks, whose natural gas potential is estimated at 4.9 trillion cubic feet, Acha said.
The contract paves the way for investment of up to $2.06 billion in the areas of exploration, transportation and plant construction at the three blocks, he added.
“These new areas will allow us to increase our reserves and consolidate Tarija province as Bolivia’s energy hub,” the YPFB chief said, referring to the area of the country that holds as much as 85 percent of the nation’s natural gas reserves.
In addition to an estimated 4.9 trillion cubic feet of gas, exploratory drilling is expected to confirm the presence of more than 100 million barrels of liquids in those three blocks, YPFB said in a statement.
YPFB and Bolivia’s Hydrocarbons Ministry also signed a separate MOU with Russian state-controlled energy giant Gazprom aimed at “updating the general framework for developing Bolivia’s gas sector through 2030.”
The latest study of Bolivia’s proven natural gas reserves showed they amounted to 10.45 trillion cubic feet.
Bolivia has drawn up plans for intense exploration aimed at boosting natural gas reserves, which YPFB says will last until 2023. Some analysts critical of President Evo Morales’ leftist government, however, say the country’s gas reserves will run out in 2017.
The Andean nation’s natural gas exports to Brazil and Argentina are its main source of hard currency.