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The Brazilian Energy Company (Petrobras) has signed an agreement with the Bolivian Gas Company (YFPB), which will guarantee Brazil with the supply of natural gas for a natural gas-fired power plant located in Mato Grosso, Brazil until December 2016. The current contract will expire at the end of this month.
According to the Bolivian President Evo Morales, the agreements are the result of arduous meetings between the two entities, which will be in the interests of both parties.
Negotiations are always the most difficult thing: Evo Morales.
"It is not easy to agree upon new contracts between companies. Negotiations are always the most difficult thing,” Morales stated.
Another important outcome of the discussions was providing Petrobras with preferential rights to natural gas in the areas assigned to the Brazilian energy company in Bolivia, which will enable increased levels of production and exports.
According to the Economic Commission for Latin America and the Caribbean, Petrobras of Brazil has been the primary partner of YPFB, winning a bid in 2013 that is estimated to require an investment of more than US$800 million.
The deal follows a recent announcement by YPFB on Friday which revealed that that US$3 billion is currently being invested in nearly 50 exploration projects in the Andean nation with oil, gas and condensate potential, of which 61 percent will be contributed by state-owned company YPFB and the rest will come from private firms such as Repsol and Petrobras.
In 2013, the Bolivian government collected close to US$2.1 billion from hydrocarbon revenues and estimates that it will increase state hydrocarbon revenues by 10.6 percent in 2014.
Due to increased revenues and gas exports, Bolivian President Evo Morales announced August 8 that the government will create a fund to finance the expansion of the country's military.
The gas royalities will be allocated toward the construction of barracks and border control points, as well as improving border security.
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