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Falling investment threatens Bolivian gas supply: producer group
AFP
Rio de Janeiro
Petroleumworld.com 09 27 06
Plunging energy investment in Bolivia threatens domestic supply and
exports of natural gas, after the terms of the country's May 1 energy
nationalization halted new exploration efforts, Bolivia's Hydrocarbons
Chamber, a private sector group representing oil companies, said Monday.The chamber said in a report that it expected gas sector investments in
the country to fall to between $60 million to $80 million this year, down from
around $200 million last year.This year's investments will likely be only "maintenance" spending to
keep current gas production flowing, according to data from the group, which
monitors energy investment in the country.Bolivia already faces a deficit in gas supply to cover its domestic and
export markets.Bolivia has been obliged to cut gas supply to Argentina to as little as 1
to 1.5 million cubic meters/day from an earlier 5 million cu m/d, since Brazil
has begun to buy at least 30 million cu m/d from Bolivia, up from average
amounts this year of around 25 million cu m/d.Brazil's contract to take up to 30 million cu m/d from Bolivia takes
precedence over Argentina's contract to buy up to 7.7 million cu m/d of
Bolivian gas, which is "subject to availability" of those volumes for export,
industry sources told Platts last week.Brazil is buying more gas to fuel its gas-fired electricity generation
facilities in the southern region during a dry season in which hydroelectric
power becomes less reliable.The falling investment levels place in danger Bolivia's plans to boost
its gas exports, the Hydrocarbons Chamber said.Argentina has plans to buy up to 27.7 million cu m/d gas from Bolivia
within two to three years, but that would require major exploration
investments in the Andean country first.Bolivia's government this month is seeking to negotiate new contracts
with oil majors operating in the country. The tax and royalty burden on
operators at Bolivia's largest gas fields has surged since May to 82%, up from
as little as 18% less than three years ago.--Joshua Schneyer, newsdesk@platts.com
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Platts 26 09 06
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