WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Rotate device for more commodity prices

Argentina, Bolivia Seal Gas Exploration Deal

Bolivia Argentina gas deal

The state-owned companies of Argentina and Bolivia, YPF and YPFB, respectively, have signed an oil services agreement that will see the two partner in the exploration of the Charagua block in hopes to strike commercially viable reserves of natural gas.

The block, spanning 99,250 hectares in eastern Bolivia’s Santa Cruz department, is estimated to contain 2.7 trillion cu ft of gas. According to YPFB, if the partners make a commercial find, they will then proceed to form a consortium and invest over US$1.1 billion in the development of the deposit, with daily output estimated at 10.2 million cubic meters.

The Bolivian company will hold 51 percent in the consortium and YPF will have the remainder. The contract signed on Monday has duration of 40 years, suggesting this is how long the productive life of the deposit has been calculated at. Additional revenue for the Bolivian budget from oil extracted at the deposit is seen at US$12.36 billion over the lifetime of the project.

For Argentina, the development of Charagua will help tackle a deficit of natural gas on its domestic market. Last year, between January and November, the country imported around 30.8 million cubic meters of gas on a daily basis, some of it from Bolivia, and some from overseas in the form of LNG. It needed more than this, Platts notes, but it has no sufficient regasification capacity to process imported LNG. Another problem for Argentina was the slower than expected growth in gas production in Bolivia.

According to last year’s estimates of the Bolivian Ministry of Hydrocarbons and Energy, the country’s gas reserves stand at 62 trillion cubic ft, or 1.75 trillion cubic meters. Of this, Santa Cruz accounts for around 350 billion cubic meters, which makes it last among the three largest areas where Bolivia’s gas reserves are concentrated. Tarija holds some 500 billion cubic meters, and La Paz, the largest, holds an estimated 560 billion cubic meters of natural gas.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News