Thursday, February 16, 2006

Bolivia: 5 Billion From Petrobras? Not So Fas..t

Much has been made of the initial announcement by Petrobras' international director, Nestor Cuñat Servero that the company stood to invest five billion dollars over the next five years in Bolivia, reality again intrudes on the party.

In a tersely worded statement from its headquarters, the Brazilian oil and gas giant "clarified" what was said:

"It is not correct to state that Petrobras will invest 5,000 million dollars in projects in Bolivia." The sum mentioned by its international director is an estimate of the total investments needed for the proposed projects. And that those proposed expenditures, will be by Petrobras, its partners and YFPB, the Bolivian National Oil Company.

Lastly, and perhaps more importantly, those proposed projects must be commercially viable, which is the criteria used by the company in all of its dealings.

The article from El Diario here.
Basically this could be seen as a carrot and stick approach in the on-going negotiations. Lula tries talking some sense into Evo, then the company comes in and offers continued (and larger) investment in the Bolivian gas fields. But then the company, says that it will adhere to its normal standards, which essentially means that Bolivia will have to make guarantees and concessions on protecting the company's investments. One can almost assume that means continuing with some variation of the current regulatory regime, that is not as drastic as envisioned by the MAS types.