Bolivia: Petrobras could return to oil production and help YPFB restructure

Energy Minister Marcelo Blanco announced on Thursday that Bolivia would begin technical discussions next week with Brazil’s state-owned oil?firm Petrobras about its possible return to exploration?and production in the country. The company is also willing help restructure the state?energy?firm YPFB.

After years of falling gas production, the government of?President Rodrigo Paz wants to open Bolivia up to energy investments and to revive trade with important partners like Brazil. Years ago, declining gas output had drained hard currency reserves and turned a once-energy exporter country into one that was hit by frequent fuel shortages.

Blanco, a Petrobras spokesperson, told reporters that the company was willing to support YPFB in its restructuring, given their past experience with crisis management.

Blanco stated that the two parties agreed, after a meeting held on Wednesday, to establish technical working groups to begin next week in order to evaluate Petrobras renewed participation throughout the sector.

He did not give any investment numbers or timeline.

I will not?give numbers. I won't?be irresponsible. Blanco added that he never gave exact dates or amounts.

YPFB president Sebastian Daroca said that a firm would be expected to present its final report on Bolivia's gas and oil reserves at the end of last season next week.

He said that the government planned to use these figures to discuss ways to boost production in the coming years.

Analysts and industry groups are closely watching the report because Bolivia has been criticised for its long-standing delays in publishing updated reserves data, which have left uncertainty about the size of the remaining oil and natural gas resources.

Petrobras stopped investing in Bolivia when former President Evo morales nationalized this sector?in 2006. Petrobras hasn't completely abandoned the Bolivian gas business. It has still been allowed to import Bolivian gas through the border crossing points between the two countries.

Paz stated in March that Bolivia wanted to restart its relationship to Petrobras under new and more clear energy regulations to attract foreign capital to the country.

(source: Reuters)