Bolivia signs gas deal with Gazprom

By Andres Schipani in La Paz

Gazprom, the Russian gas group, and YPFB, Bolivia’s state-owned energy company, on Monday signed a deal for the “exploration and exploitation” of gas reserves in the Andean country.
In its initial phase, the contract will mean a “strategic alliance” between both companies to start research in large areas – mostly in the gas-rich region of Tarija – that are thought to promise considerable reserves.

Although no official figure for the deal was issued, a Bolivian government official last year told the Financial Times the contract could amount to $2bn (€1.3bn, £1bn).
“Due to its large gas reserves, Bolivia is the country that most interests us in the region. I consider it will be the region’s leader in gas terms and our objective is to go as far as to exploit as much as we can,” Stanislav Tsygankov, the head of Gazprom’s international business department in Latin America told the Financial Times.
Bolivia has the largest reserves of natural gas in South America but is in desperate need of foreign investment in order to be able to produce and deliver gas. “We are doing the [preliminary work] that will lead us to [be able to announce] a clear volume of investments, but I can tell you that we are considering an investment of billions of dollars,” Mr Tsygankov said, without specifying an amount.
Evo Morales, Bolivia’s left-wing president, nationalised Bolivia’s hydrocarbons industry in May 2006, and fears of political instability and of the seizure of assets have been seen by many analysts as a reason for declining foreign investment in the industry. Mr Morales on Monday committed himself to respect every deal with the Russian company.
“We want good partners but not patrons; [by] following this path, today we are subscribing to an important agreement,” Santos Ramírez Valverde, interim president of YPFB, said. “Gazprom will be our partner.”