Petrobras, YPFB to Extend Gas Contract Talks 60 Days

Brazil's federal energy company Petrobras (NYSE: PBR) and Bolivia's state-controlled oil company YPFB will extend talks over a natural gas export agreement for another 60 days, Petrobras CFO Almir Barbassa said during a webcast.

The companies have been in talks in past months to revise parts of a 20-year contract through which Petrobras can import as much as 30 million cubic meters a day of Bolivian natural gas through the 3,000km gas pipeline linking the two countries. The contract expires in 2019.

Bolivia's government aims to increase the price of gas exports to Brazil as part of new hydrocarbons nationalization policies introduced by President Evo Morales.

The Morales administration says the export price to Brazil of US$3.6/MBTU is too low, while Petrobras says Brazilian consumers would not accept an increase.

Petrobras officials have indicated a middle-ground agreement likely will be reached. Officials from both companies are meeting for a round of talks in Rio de Janeiro this week.

Bolivia successfully concluded negotiations to increase the price of gas exports to Argentina some 50% to some US$5/MBTU.

The extension of talks is allowed for in contractual clauses.

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