Petrobras to Sign Agreement With Bolivia

RIO DE JANEIRO, Brazil – Brazil’s state-run oil company Petrobras said Friday it will sign a long-term natural gas agreement with Bolivia’s new leftist government.

Petroleo Brasileiro SA said in a statement that in the coming weeks it will sign an agreement on projects that will guarantee its long-term supply of natural gas and an expansion of its investments in Bolivia.

Brazil is Bolivia’s biggest natural gas client.

Petrobras said the agreement will cover cooperation in refining, oil and gas exploration and production, alternative fuels and gas distribution in Bolivia, which has the second largest natural gas reserves in South America after Venezuela.

It will also include the intent to build an industrial complex at the Brazil-Bolivia border, including a petrochemicals plant, a thermoelectric power plant and a fertilizer unit.

Bolivia’s new president Evo Morales has given mixed messages to the oil and gas industry that has invested $3.5 billion in the impoverished Andean country since 1996.

In early January, Morales told Brazil’s President Luiz Inacio Lula da Silva that he wanted to nationalize his country’s energy industry, without expropriating foreign oil firms. But on Tuesday, Morales said foreign energy multinationals were “conspiring to destabilize” his government.

In its statement Friday, Petrobras didn’t discuss the terms under which the company would operate in Bolivia in the future.

Petrobras also wants to help Bolivia use natural gas in its car fleet, increase the use of gas in households and train oil and gas technicians. With about 1 million cars, Brazil has the world’s second-largest fleet of cars that can run on vehicular natural gas.

Details of the agreement will be worked out in the coming weeks. Petrobras Chief Executive Sergio Gabrielli and Brazilian Mines and Energy Minister Silas Rondeau are slated to sign the agreement in La Paz in late February.