Tuesday, May 24, 2005

Bolivia and Brazil, Pipeline and Investment

This article Natural Gas Pipelines In The Southern Cone, By David Mares, from the Program on Energy and Sustainable Development at Stanford, shows what a pain in the neck it was for Bolivia's government to get Brazil and Petrobas onboard for the construction of the pipeline, and for the contracts to sell the gas. Also worth note it shows how Brazilian investment stimulated an increase in exploration and investment in Bolivia's Natural Gas resources:

Construction of the giant GASBOL pipeline began in 1997 and was completed in 1999. The Petrobrás-guaranteed market for Bolivian natural gas (along with the
privatization of the sector) encouraged massive investments in exploration and pipeline construction in Bolivia, which in turn produced certified (proven and probable) natural gas reserves that increased from a level around 170 bcm before 1997 to 1,481 bcm by January 2001 (IEA 2003). Since natural gas and petroleum are often found together, petroleum reserves also increased dramatically from 200 million barrels in 1997 to 892 million barrels by January 2001. During the construction of the GASBOL project, new reserves were discovered by a number of companies, such as Chaco, a subsidiary of BP Amoco (UK), Perez Companc (recently purchased by Petrobrás), Pluspetrol and Andina (both Argentina), Maxus, a subsidiary of YPF (now controlled by Repsol of Spain), Petrobrás, Total (France), Mobil Oil and Tesoro (both US). Bolivia now has the second gas largestreserves in Latin America after Venezuela and the most non-associated gas (ESMAP 2003;Andersen and Faris 2002; IEA 2003). Bolivia’s proven reserves now make it possible to exceed the volumes that can be shipped via the GASBOL pipeline.