UPDATE 2-Petrobras to invest up to $1 bln in Bolivia

(Recasts, adds details on accords, quotes from presidents)

By Helen Popper

LA PAZ, Dec 17 (Reuters) - Brazil's state energy firm Petrobras (PETR4.SA) (PBR.N) announced plans on Monday to invest up to $1 billion in Bolivia to increase natural gas production and look for new reserves of the fuel.

The plan marks a turning point in strained relations between the leftist government of Bolivian President Evo Morales and Petrobras, which criticized Morales' energy nationalization last year and froze planned investments.

The two countries signed a series of energy cooperation deals during a two-day visit by Brazilian President Luiz Inacio Lula da Silva that aimed to secure Brazil's supplies of natural gas and patch up ties with its poorer neighbor.

"I want to tell Petrobras's president that although there was a certain lack of trust after the changes to our energy policies, we've never sought to harm any company," Morales said in a speech at the presidential palace in La Paz.

"Every investor should recover their investment, not just recover it, but also have a right to the profits. We'll always guarantee that," said Morales, a close ally of Venezuela's fiery left-wing president, Hugo Chavez.

A text of the Petrobras investment accord said the firm envisioned spending between $750 million and $1 billion to increase gas output.

The other energy agreements include a plan by Brazilian petrochemical firm Braskem (BRKM5.SA)(BAK.N) to study a joint venture with Bolivia's state energy company YPFB to build a methane plant.

Petrobras employees will also give technical and commercial training to their counterparts in YPFB.

GAS SHORTAGE

Brazil is Bolivia's biggest natural gas customer and a gas shortage in Rio de Janeiro in October reminded the wealthier country how much it relies on its smaller neighbor for supplies of the fuel.

Economic expansion in Brazil, Chile and Argentina has increased demand for energy across the region and Bolivia has South America's second-biggest gas reserves after Venezuela.

However, Lula's visit was not confined to energy issues. He also signed accords to give loans for farm machinery and increase cooperation between the countries' universities.

Diplomats in Brasilia have said Lula wants to win back Brazil's influence in Bolivia from Venezuela's Chavez, and he sought on Monday to draw a line under the spat over the energy nationalization.

"In the end, Evo Morales and Lula didn't fight like some people wanted us to fight. We didn't become adversaries ... we became comrades," Lula said.

The trip was well-timed for Morales, who is facing fierce resistance to his leftist reform plans from rightist opponents. They frequently attack his close relationship with Chavez, but the more moderate Lula is a less controversial ally. (Editing by Christian Wiessner)