SANTA CRUZ, Bolivia (Reuters) - Bolivia’s government on Tuesday signed natural gas development deals with Spain’s Repsol, Brazil’s Petrobras, Royal Dutch Shell and Pan American Energy that are expected to draw $1.6 billion (£1.21 billion) in investment and boost output.
The deals cover blocks in the Iniguazu, San Telmo Norte and Astillero gas areas. Repsol, Shell and Pan American Energy will participate in the Iniguazu consortium, while Petrobras will be a partner in the other two. Several units of Bolivia’s state-run YPFB will participate in all the projects.
“We are very confident and we have hope,” Bolivia President Evo Morales said the signing ceremony at the Gas Exporting Countries Forum (GECF) that started on Tuesday in Santa Cruz. “We are committed to secure transparent contracts.”
Bolivia’s declining gas production is seen by analysts as an obstacle for boosting exports to key customers in Argentina and Brazil. The country finished 2016 with reserves of 0.3 trillion cubic meters, the same as 2015, and production of 19.7 billion cubic meters, a drop of 3 percent, according to BP’s statistical review.
Morales said the projects with foreign partners could add about 21 million cubic feet per day of output, with early production coming on line as early as 2020 or 2021.
Repsol Chief Executive Antonio Brufau said at the ceremony that he expected the Iniguazu project to go well: “As there is existing infrastructure (near Iniguazu), if the exploration phase succeeds, we will be able to supply gas to the market very fast.”
Morales said he expected that project alone to bring in $900 million of investments.
Repsol, Shell, Pan American and YPFB last year extended a previous contract to produce gas at the Capipendi fields for 15 more years until 2046, involving a $980 million investment. The blocks produce some 8.6 million cubic meters per day of gas.
Writing by Richard Valdmanis; Editing by Cynthia Osterman and Richard Chang