Investments are needed to expand natural gas production and the capacity of the 3,000km Bolivia-Brazil natural gas pipeline (B2B) to increase supply, Agencia Estado news service quoted Brazil's mines and energy deputy minister Nelson Hubner as saying.
Bolivia exports some 24Mm3/d of gas to Brazil, or 80% of B2B capacity, and about 40% of current demand. By 2011, natural gas consumption is expected to top 100Mm3/d.
In addition, investment is needed in Bolivia to expand production, the paper quoted Brazil's federal energy company Petrobras CFO Almir Barbassa as saying.
Petrobras (NYSE: PBR) cancelled most of its investment plans in Bolivia including B2B expansion following the country's May 1 nationalization decree.
Bolivia's VP Alvaro Linera agreed new investments in production are needed to increase supply, including the extra 20Mm3/d increase in exports to Argentina that forms part of a new supply contract, Bolivia's state news agency ABI reported.
Linera called on companies to invest in new production and said demand for increased output is guaranteed. Investment has dropped since 2001 due to a lack of incentives by past governments in La Paz, ABI quoted Linera as saying.
Before nationalization, Petrobras was discussing a US$5bn investment program over several years to increase output, train personnel and boost Bolivian demand for natural gas.
Indeed, 2006 could experience a sharp decline in investments, according to the Bolivian chamber of hydrocarbons (CBH). Oil and gas industry investments are forecast to reach US$60mn-80mn this year, down as much as 70% from 2005.
E&P investments in Bolivia have been declining since 1998, when investments peaked at around US$600mn, according to CBH.
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