Bolivia's State-owned Company To Pen Deal With Russia's Acron

Bolivian Minister of Hydrocarbons Luis Sanchez released a statement announcing an upcoming deal between Bolivia’s state oil company and Russia’s Acron for joint management of a petrochemical plant in southeast Brazil.

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"We are concluding negotiations and signing agreements with Acron in the coming days, which are not only to provide gas to the petrochemical industry but also to be partners in that industry," Sanchez said on behalf of Yacimientos Petroliferos Fiscales Bolivianos (YPFB) in a statement released by his office.

The deal between Acron and YPFB originates from a set of bilateral agreements struck between Russia and Bolivia during a state visit by President Evo Morales to Russian President Vladimir Putin in June 2018.

The agreement stipulates that YPFB will sell four million cubic meters of natural gas to the Tres Lagunas complex in Mato Grosso do Sul in Brazil. The Bolivian copmany owns a stake of 30 percent in the complex.  

The sale is also part of a plan by Brazil’s government to dismantle the Petrobras’ monopoly in the Brazilian hydrocarbon market.

This forced YPFB, of which Petrobras was the sole buyer of natural gas in Brazil, to seek agreements with states and private companies in neighboring countries to compensate for the loss of sales by the non-state Brazilian company. In 2018, they bought 15 million cubic meters per day, half the average of the previous decade.

Sanchez predicted a "very significant" benefit for YPFB from the Acron agreement saying, "it will make some of its profits from a product with added value, such as urea, in addition to the traditional profits from the sale of raw materials."

"The (hydrocarbon) market is very important, it is an opportunity for YPFB to negotiate new prices and to become not only a seller, but also a marketer and distributor," said Sanchez.

The minister added that the Brazilian states of Mato Grosso and Mato Grosso do Sul, with which Bolivia signed integration agreements in recent days, add an annual demand of four million tons of urea, which could be covered by the production of Tres Lagunas and the Bolivian urea factory in Bulo Bulo, located in the center of the country.