BG Group Seeking Ways to Expand Ops in Bolivia
UK gas company BG Group (NYSE: BRG) plans to look for opportunities to expand operations in Bolivia, BG Southern Cone corporate affairs director Jose Ponte told BNamericas.
"We are in talks [with Bolivian authorities] and are looking for conditions that justify new investments," he said.
Talks aim to guarantee sufficient return for BG after Bolivia's May 1 nationalization decree, by which the government moved to expropriate hydrocarbons reserves and raise tax and royalty levels to a combined 82% from roughly 50%.
"We already have a draft agreement," Ponte said.
Bolivia's authorities have since May been auditing private companies and holding talks to determine the terms of new contracts to compensate investments made and determine an adequate return for companies. The decree set a six-month deadline for talks to finish.
BG's interest is to continue exploring for gas to supply neighboring Brazil and Argentina, where the company owns gas distribution assets Comgas and Metrogas respectively.
"We see Bolivia as having an important role in the region for fuel supply, he said.
BG Group holds some of the largest natural gas reserves in Bolivia through eight blocks and partners in two of the country's largest gas condensate fields: Margarita and Itau.
The company also holds a 25% stake in the 3,000km gas pipeline that transports Bolivian gas to Brazil, the region's largest market.
Bolivia's natural gas reserves are estimated at some 50 trillion cubic feet (1.4 trillion cubic meters). As such, the landlocked country is an important source of fuel in the region, especially to Brazil and Argentina.
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