Page 10 - LatAmOil Week 10 2020

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 Gas flaring is a wasteful practice, but it persists because of a variety of technical, regulatory and economic constraints.
Around the globe, flaring increased by 5% year on year to reach 145bn cubic metres in 2018.
This is equivalent to the total annual gas consumption of Central and South America, according to the World Bank.
Last year, Venezuela flared or lost 3.4bn cubic feet (96.28mn cubic metres) per day of associated gas, up by 70% on the 2010 figure of 2 bcf (56.64 mcm) per day in 2010, according to figures from the Gas Energy Latin America
consultancy. During the same period, crude oil output fell by 56% to 1mn barrels per day (bpd) in 2019.
Last month, Colombia’s state-owned oil and gas company Ecopetrol said it had joined a World Bank-led global initiative to stop routine gas flaring at its operations.
The initiative, called “Zero Routine Flaring by 2030,” aims to eliminate the routine flaring of gas at new and existing fields within a dec- ade. At least 32 governments, 15 development institutions and 37 oil and gas companies have signed on to the initiative since it was introduced in 2015. ™
BRAZIL
Petrobras amends Bolivian gas deal
The state-owned Brazilian company will reduce Bolivian gas imports by about a third, leaving more room in the pipeline for deliveries to private-sector buyers
BRAZIL’S national oil company (NOC) Petro- bras said last week that it had successfully amended an existing natural gas supply contract with its Bolivian counterpart YPFB.
In a statement dated March 6, the company said that the amendments allowed Petrobras to reduce the volume of Bolivian gas slated for delivery from 30.08mn cubic metres per day to 30 mcm per day. This, in turn, will allow YPFB to use the extra space in the supply pipeline to offer gas to other buyers in Brazil, it said.
Petrobras did not say whether any potential buyers had expressed interest in the surplus Bolivian volumes. It did note, though, that the NOC had taken this step in order to uphold an agreement it had signed with CADE, Brazil’s national anti-monopoly agency, in June 2019.
“The execution of this amendment reaffirms Petrobras’ commitment to the opening of the Brazilian natural gas market, stimulating its competition by encouraging new agents to enter the market,” the company said in its statement.
YPFB began delivering gas to Petrobras in 1999, after the parties signed a 20-year supply contract. Prior to the ouster of former President Evo Morales last year, Bolivia’s government indi- cated that it was keen to renew the deal, which helped establish the country as an exporter of gas.
The two sides were not able to come to terms by the time Morales departed Bolivia amid widespread civil unrest. Indeed, they suspended negotiations late year.
Since then, though, the parties have come back to the table. This represents a change of course for Petrobras, which had been reluctant to seek another deal.
The NOC took this stance partly because it
preferred to focus on developing domestic gas reserves and partly because it had little confi- dence in YPFB’s ability to guarantee the delivery of even the minimum volumes stipulated in the old deal – 24 mcm per day. Indeed, Petrobras pointed out that the Bolivian company had incurred contractual penalties in nine out of all 12 months of the year in 2018 because it had failed to supply at least that much gas.
YPFB responded to this criticism by com- plaining that Petrobras had not upheld its end of the deal. It noted that the Brazilian side had been importing only 12 mcm per day since March 2019, even though the 1999 contract between the parties had included “take or pay” clauses that call for shipments of at least 24 mcm per day. Oscar Barriga, then serving as president of YPFB, said this gap meant that the Brazilian NOC should also incur penalties. ™
Brazil imports Bolivian gas via overland pipeline (Image: ECEN.com)
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