Oil and Gas

Bolivia says close to signing Gazprom natgas deal

* Bolivia says Gazprom interested in exploring two blocks

* Exploration work would require $900 mln

* Gazprom, Total could team up on one of the blocks

LA PAZ, June 17 (Reuters) - Russian energy giant Gazprom GAZP.MM is close to signing a deal to explore for natural gas in Bolivia, the head of the South American country's state-run energy company said on Thursday.

Carlos Villegas, president of Bolivia’s YPFB, declined to comment on how much Gazprom could invest in two blocks in eastern Bolivia, but the state-run firm has estimated in the past that nearly $900 million would be needed to explore the areas.

“Gazprom will come to Bolivia to explore the Azero block, and there is also the possibility that ... (they invest) in the Sunchal field,” Villegas said in a YPFB press release.

“We’re very close to ... (signing) a contract for the Azero field that would allow Gazprom to start exploration work immediately,” Villegas said.

According to YPFB's 2009-2015 development plan, Gazprom and France's Total TOTF.PA would invest $480 million in Azero, and the Russian company -- the world's largest natural gas producer -- would invest $402 million on its own in Sunchal.

Thursday’s press statement said executives at Gazprom and Total were still discussing the possibility of a joint venture.

Bolivia’s leftist President Evo Morales nationalized the energy sector in 2006, forcing foreign companies in the poor Andean country to pay higher taxes and sign new operating contracts giving YPFB control over their fields’ output.

Since then, Bolivia has struggled to attract investment to increase output, and it has had to postpone ambitious plans to expand exports to neighboring Argentina.

Analysts say foreign energy companies would only invest in landlocked Bolivia if the state found new markets for the fuel.[ID:nN24125054]

Gazprom -- which monopolizes natural gas exports from Russia, and has nearly total control over production -- signed a memorandum of understanding in early 2007 pledging to study a series of joint ventures with YPFB.

Brazil's Petrobras PETR4.SAPBR.N and Spain's Repsol REP.MC are the biggest investors in Bolivia's energy sector.

Bolivia has the second-largest natural gas reserves in South America after Venezuela and is the region’s top exporter of the fuel. The country produces about 40 million cubic meters of natural gas per day, exporting most of it to Brazil. (Reporting by Carlos Quiroga; Writing by Eduardo Garcia; Editing by Sofina Mirza-Reid)