Oil report

Brazil says trims cut in Bolivian nat gas imports

BRASILIA, Jan 9 (Reuters) - Brazil's state-run oil company Petrobras PETR4.SAPBR.N will increase its natural gas imports from Bolivia to 23 to 24 million cubic meters a day, Energy Minister Edison Lobao said late Friday, only days after cutting imports to 19 million cubic meters.

Joao Souto, deputy secretary at the Energy Ministry’s Natural Gas and Renewable Fuels department, told Reuters on Wednesday that Petrobras cut Bolivian gas imports by 11 million cubic meters a day from 30 million cubic meters previously from the start of 2009.

Lobao’s announcement comes after a meeting in Brasilia with a Bolivian mission led by Planning Minister Carlos Villegas, Hydrocarbons Minister Saul Avalos and Defense Minister Walter San Miguel on Friday.

The Bolivia mission complained that it was not informed of Brazil’s unilateral decision to cut gas imports, the main source of trade revenues for the poor neighbor.

Lobao said the decision to increase the volume of gas imported from Bolivia from what was announced on Wednesday was purely a technical decision and not a political one.

The increase in natural gas imports will be used by the two gas-fired thermoelectric plants in Araucaria, Parana, and Canoas in Rio Grande do Sul, both owned by the state-run Petrobras.

“The scenario changed from the morning to the evening today,” Lobao said. “This morning, there was no need for the thermoelectric plants.”

Lobao said that the company will begin importing 23-24 million cubic meters starting Saturday.

Seasonal rains boosted water levels in hydroelectric dams in Brazil, which allows several, more expensive, gas-fired thermoelectric plants to go off-line and hydroelectric plants to generate more of the country’s energy needs.

Most of Brazil’s gas-fired thermoelectric plants are used as emergency backup generators to lighten demand on hydroelectric dams during the dry season.

Brazil, the biggest buyer of Bolivian gas and also the biggest foreign investor in the neighboring country, has held up investments after Bolivia nationalized its gas fields in 2006 and seized Petrobras assets.

Souto said the Bolivian gas price will fall about 20 percent in February to align it with the drop in oil prices, as stated in the contract. Lobao said the price for now has not changed.

Brazil’s energy outlook has drastically improved since early 2008, when rains were late, hydroelectric reservoirs were low and analysts feared power rationing.

Now, Brazil’s reservoirs are high enough to make the risk of energy rationing practically nil. Petrobras is about to bring on new gas production from offshore wells, and two new LNG regasification terminals are coming online in 2009. (Reporting by Ana Paula Paiva; Writing by Reese Ewing)