Page 10 - LatAmOil Week 48 2019

LatAmOil BRAZIL/BOLIVIA LatAmOil
Bolivia halts drilling by Brazil’s Petrobras
BOLIVIA’S new government has ordered the Brazilian national oil company (NOC) Petro- bras to stop exploring for oil and gas in a key national reserve in the face of strong opposition from locals.
Bolivia’s oil and gas minister Víctor Hugo Zamora instructed the company to stop drill- ing activity in the San Telmo Norte and Astil- lero blocks, according to local reports. Both blocks lie within the Tariquía national ora and fauna reserve, on Bolivia’s southern border with Argentina
“Tariquía has not been touched and that is our mission inside the oil and gas ministry,” Zamora was quoted as saying by the Bolivian daily Correo del Sur.
“It is not easy because they are established contracts, but the rst decision we have made is the stoppage of exploratory activities within the protected area,” he added.
YPFB, Bolivia’s NOC, created two joint ventures with Petrobras in 2017 to explore and develop San Telmo Norte and Astillero, which have potential reserves of 2-4tn cubic feet (56.6- 133.3bn cubic metres) of natural gas. At the time, the partners were hoping to bring the sites
online in 2022.
e Brazilian major was due to invest around
$675mn in the two projects, in which it served as operator and owned a 60% share. YPFB held the remaining 40%.
Bolivia’s former President Evo Morales, who resigned last month amid electoral fraud alle- gations, legislated in favour of exploration of the country’s oil and gas reserves in 2015. Since then, however, exploration has been hampered by intermittent protests by locals, who oppose the opening of the reserve to drilling. Opposi- tion intensi ed in the run-up to the controver- sial elections last month.
Natural gas accounts for roughly half of Bolivia’s exports. e Andean nation currently has around 11 tcf (312 bcm) of gas reserves, according to YPFB gures. e Tarija region is one of the country’s biggest sources of gas, accounting for more than 70% of current gas production.
Bolivia is an important supplier of gas in South America, shipping a part of its production via pipeline to both neighbouring Argentina and Brazil. It exports nearly 70% of its output to those two countries. ™
ARGENTINA
Argentina: Investment in Vaca Muerta could reach $9.5bn per year
ARGENTINA could attract signi cantly more investment in its oil and gas sector by the end of the next decade, including up to $9.5bn of investment each year in the Vaca Muerta shale formation, according to outgoing government o cials.
e formation, one of the largest shale depos- its in the world, could see yearly investment of $8.5-9.5bn, local press agencies reported, citing a new study from outgoing President Mauricio Macri’s Energy Ministry.
So far this year, the formation has drawn investments of around $3.6bn in total.
Vaca Muerta, which is located in Neuquén Province in the central part of Argentina’s remote Patagonia region, contains around 308tn cubic feet (8.722tn cubic metres) of shale gas and 16.2bn barrels of shale oil, according to the US Energy Information Administration (EIA).
In 2017, the Argentine government signed a landmark deal with a group of companies that included state-run YPF and foreign majors Chevron (US), Total (France), Royal Dutch Shell (UK/Netherlands) and Pan American Energy,
a unit of BP (UK), to invest in the project. e companies agreed collectively to invest $5bn in the formation in 2017 and $15bn a year begin- ning in 2018.
However, Argentina’s unsteady economy has long been a barrier to progress at Vaca Muerta, particularly a er the government expropriation of Spanish oil major Repsol’s subsidiary YPF in 2012. e country’s incoming administration, which is facing the short-term risk of default and major political and economic uncertainty, is hoping that Vaca Muerta will usher in a new period of growth and prosperity, attracting greater foreign income into the country.
Argentina’s new president-elect, Alberto Fernández, has pledged to protect the shale for- mation from new policies such as price freezes and capital controls, which have been intro- duced elsewhere, to try to stabilise the econ- omy. His team have reportedly been working on a new Vaca Muerta law that would give those companies working at the formation a num- ber of tax bene ts and other business-friendly incentives. ™
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w w w . N E W S B A S E . c o m Week 48 05•December•2019