Offshore staff
(Brazil)-In his weekly radio address, Brazil's President Luiz Inacio Lula da Silva said that Brazil will produce the same volume of natural gas that it now imports from Bolivia starting in 2008.
The announcement comes in response to Bolivia's recent decision to nationalize its energy resources, a move that is expected to increase the price of gas exported to Brazil by some 62%. Brazil currently consumes approximately 26 MMcm/d of Bolivian gas, which represents about 50% of the Brazilian gas market.
While Lula stressed the importance of putting into operation thermoelectric power stations that run on alcohol as a chief means of reducing reliance on imported gas, the start-up of new gas fields off the coast of Brazil is seen as another key strategy in reaching energy independence.
Brazil's Petrobras is investing heavily in offshore areas such as the Campos basin, and in the shallower waters of the Camamu-Almada basin, 10 km off the coast of the state of Bahia. It is there that Petrobras recently announced a potential increase in gas reserves in the Manati field.
Petrobras would like to pursue a diplomatic solution to its challenges with Bolivia, due mainly to its large investment in the country. The company has been operating in Bolivia for the past 10 years and has invested approximately $1.5 billion during that time. Petrobras will be seeking some measure of compensation, since the nationalization of hydrocarbons in Bolivia affects both the operations and assets of the company.
Bolivia has also taken a cue from the government of Venezuela and called for new operating contracts which would give a greater share of revenue to the government. Talks concerning new operating contracts between the Bolivian government and foreign energy companies including Petrobras will be put on hold for three months until an audit on companies' investments in Bolivia is completed.
Bolivian Energy Minister Andres Soliz Rada said that the audit was necessary because clarification was needed on the amount foreign firms spent in developing wells versus the amount actually reported to the government. "It's no secret that almost all energy companies engage in 'double counting' as a means of tax avoidance," Solis Rada said.
5/23/2006
