France’s Total and the British Gas Group (BG Group) confirmed their intentions to invest over $1b in geological exploration in Bolivia over the next three years. Bolivia’s President, Evo Morales, informed journalists of this at the end of his official visit to several European countries on 11 November.
In particular, Morales noted that the French energy company was planning to start commercial production in the Incahuasi field, which it is developing in the south of the country jointly with its Russian and Argentinian partners, in July 2016 and to bring gas production in the first stage to 6.7 million cubic metres a day.
In addition, E. Morales said that Total would invest about $800 mln in Bolivia’s oil and gas industry in the next three years.
According to Morales, the BG Group, in turn, intends to begin seismic surveys in the Huacareta block in the south-eastern part of the country in December of this year. Local media quoted the Bolivian president as saying that the British company was planning to invest a total of over $300mln in the geological exploration of several of the country’s oil and gas blocks by 2019.
The agreement on the expansion of the work programme and the continuation of British investments in the Bolivian energy sector was confirmed in a memorandum of understanding signed on 8 November by the Bolivian Minister of Hydrocarbons and Energy, Luis Alberto Sanchez, BG Group President Helge Lund, and the General Director of the company’s Bolivian division, Orlando Vaca.
Developing the oil and gas industry and increasing hydrocarbon reserves are among the strategic goals of the government of the Republic of Bolivia. The country actively encourages foreign investment, while also investing its own financial resources in the energy sector.
In early November, Luis Guillermo Acha, the head of Bolivia’s state oil and gas company, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), announced that by 2020 the state was planning to expand its natural gas reserves by 11 trillion cubic feet (over 310 billion m3) from the current 10.5 trillion m3 (297 billion m3). YPFB intends to invest nearly $5 billion in geological exploration works by 2021 for these purposes.
Gazprom is working with YPFB on the basis of a memorandum of understanding signed by the companies in 2007. Gazprom's interests in Bolivian projects are represented by Gazprom International, the sole specialised operator for the group's international upstream projects.
Along with its project partners, Gazprom International is jointly developing the Incahuasi field, which is located within the boundaries of the Ipati and Aquio blocks, and is also conducting geological exploration works in the Azero block in the country’s Central Pre-Andean Oil and Gas-Bearing Basin.
Bolivia is the third-largest producer of hydrocarbons in South America. Each year, the country produces more than 20 billion m3 of natural gas, and at the end of 2013 its proven reserves were estimated at 10.5 trillion cubic feet (297 billion m3), with oil and condensate estimated at 211.4 million barrels (28 million tonnes).