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MarketWatch: Minister says Shell may start exploring for oil, gas in Bolivia

By Bernd Radowitz
Last Update: 10:55 AM ET Jun 1, 2007

Royal Dutch Shell Plc may start to explore for oil and gas in Bolivia, the country’s hydrocarbons ministry said in a release late Thursday.

“The main executive of Shell talked to (Bolivian) President Evo Morales and proposed participation in the phase of exploration and production,” Hydrocarbons Minister Carlos Villegas was quoted as saying. “We will start a conversation with the company about its entry (in exploration) in the country in coming days.”

The statement by the Bolivian hydrocarbons minister comes only three days after news that Shell had given up its gas transport activities in Bolivia.

Houston-based energy company Ashmore Energy International, or AEI, Tuesday said it has agreed to buy out Shell’s stakes in energy businesses in Brazil and Bolivia, including part of the Bolivia-Brazil natural gas pipeline.

AEI also agreed to buy out Shell’s 25% in Bolivia’s largest natural gas transport company, Transredes Transporte de Hidrocarburos SA, increasing its overall stake to 50%.

In 2006, the Bolivian government took over the other 50% of Transredes, which had been in the hands of Bolivian pension funds. As part of its drive to nationalize the hydrocarbons industry, the government has said it wants to own at least 50% plus one share of Transredes.

Shell had given up its Bolivian transport activities due to its “scarce experience in that business,” the Bolivian hydrocarbons ministry said in its release, while the company nevertheless is interested to invest in other activities in Bolivia.

Despite Ashmore’s purchase of Shell’s transport assets in Bolivia, Ashmore still recognizes Bolivia’s hydrocarbons nationalization, the ministry added.

“We will continue negotiations. They (Ashmore) will come from Brazil in coming hours, and we will continue to talk,” Villegas is quoted as saying.

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