Royal Dutch Shell Plc  .com Rotating Header Image

UpstreamOnline: Bolivia investors ‘waiting for clarity’

EXTRACT: Total is one of a handful of foreign companies with investments on the line in Bolivia. Others include Spain’s Repsol YPF , Anglo-Dutch supermajor Shell and Brazil’s state-run energy giant Petrobras, the largest foreign investor in Bolivia.

By Upstream staff

Bolivia probably has more natural gas deposits than believed but it needs to provide clear investment guidelines before foreign energy companies will resume exploration investment there, a senior executive of France’s Total said today.

With production running near capacity, Bolivia needs to invest heavily in exploration to meet growing demand for natural gas in South America, especially in neighbouring Brazil and Argentina.

But the future of Bolivia’s vast natural gas deposits has been in limbo since the left-wing government of President Evo Morales nationalised the country’s energy sector a year ago. The government has also raised taxes and royalties for foreign energy companies, discouraging future investment.

“There’s probably a lot more gas in Bolivia than what has been announced,” Jerome Ferrier, who runs Total’s gas and electricity unit in the Southern Cone, told Reuters on the sidelines of the Latin America Gas Summit in Sao Paulo.

“Right now we’re in talks with the government about what conditions are needed to develop Bolivia’s reserves … But it’s necessary to wait for details before moving forward.”

Total is one of a handful of foreign companies with investments on the line in Bolivia. Others include Spain’s Repsol YPF , Anglo-Dutch supermajor Shell and Brazil’s state-run energy giant Petrobras, the largest foreign investor in Bolivia.

Petrobras has also put all future investments there on hold until the government offers a clear regulatory framework.

Bolivian officials say the nationalisations are necessary to bring in extra revenue to bankroll much-needed social programmes, and often portray foreign investors as rapacious predators exploiting the country’s natural resources.

Despite that rhetoric, Ferrier said the government has shown signs it will negotiate.

“I think the government is in a reflection phase, discussing with the companies just what are the limits so that they can start deciding on future investments,” he said.

http://www.upstreamonline.com/live/article133982.ece

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “UpstreamOnline: Bolivia investors ‘waiting for clarity’”

Leave a Comment

%d bloggers like this: