Petrobras Finds Possible Gas Field in Bolivia

RIO DE JANEIRO (Dow Jones Newswires), Jan. 29, 2009

Brazilian state-run energy giant Petroleo Brasileiro (PBR) discovered porous rocks believed to hold a large gas deposit in Bolivia, according to a report in Thursday's edition of local business daily Valor Economico.

The find was made at the Ingre block in Bolivia's Chuquisaca Department, the report said, citing a government official familiar with Petrobras' operations in Bolivia. A pioneer well discovered the porous rock layer at a depth of 5,100 meters, the official said.

Petrobras officials were not available to comment on the report when contacted by Dow Jones Newswires.

In a statement to Valor, Petrobras said that "at the moment, it's not possible to make any estimate about whether there exist hydrocarbons and, because of this, it's not possible to estimate volumes or production lead times."

According to the report, the find could be similar to the nearby San Antonio and San Alberto gas fields, which produce a majority of Bolivia's natural gas. The two fields are partially operated by Petrobras.

Brazil imported more than 30 million cubic meters of natural gas a day from Bolivia in 2008. That total, however, was reduced to about 24 million cubic meters a day in early January on slack demand and full reservoirs in Brazil's hydroelectric power system.

Brazil has sought to reduce its dependence on Bolivian natural gas in recent years, given recent supply disruptions and other headaches related to nationalization of the Andean country's gas reserves.

In September, Bolivian antigovernment protesters sabotaged a key pipeline transporting natural gas to Brazil. Damage to the pipeline briefly cut natural gas imports by half.

The Brazilian and Bolivian governments have tussled over Bolivian President Evo Morales' decision to nationalize the country's gas fields in 2006. Bolivia's government seized control of natural gas refineries and pipelines owned by Petrobras during the nationalization.

Bolivia also raised the price Brazil paid for imported natural gas.

For its part, Bolivia's economy depends heavily on exports of natural gas -- and the country is keen to increase production. But private companies have been reluctant to invest in Bolivia given uncertainties surrounding nationalization of Bolivia's natural resources.

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