The Bolivian Minister of Hydrocarbons and Energy, Franklin Molina, considered that the agreement reached during the Government of Jeanine Áñez is not favorable for his country. The Brazilian president had been annoyed by saying that “everything is orchestrated”
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A worker makes an adjustment in a compressed natural gas storage module (REUTERS/Marcos Brindicci/File)
The Bolivian government assured that it is seeking to renegotiate the contract it has with the Brazilian state-owned company Petrobras to improve the price for the natural gas it sells to that market..
The Minister of Hydrocarbons and Energies, Franklin Molina, considered that the price agreed in the addendum signed during the interim government of Jeanine Áñez is not favorable for Bolivia and is causing alleged damage to the state-owned Bolivian Fiscal Petroleum Deposits (YPFB), according to a press release from his office.
“It is a duty to renegotiate the conditions of said addendum , because the one who signed it was a de facto government that did not care about the interests of the State (…) Bolivia is looking for a better price for its natural gas, better conditions and a better market”, he maintained. Molina, quoted in the press release.
When the extension of the contract for the sale of natural gas to Brazil was signed in March 2020, the Bolivian interim government indicated that expected to achieve an income of at least about 4,000 million dollars until 2026, for shipments of between 14 and 20 million cubic meters of hydrocarbon per day.
According to Molina, under the current terms of that addendum, even with the rise in the cost of gas, Brazil reaches to pay between 6 and 7 dollars per million British thermal units (BTU, in English), the statement indicates.
Bolivian President Luis Arce ; and his Argentine counterpart, Alberto Fernández (REUTERS/Agustin Marcarian/Archivo)
The minister pointed out that there was a “formal” attempt to request a renegotiation of the contract and that the president of YPFB, Armin Dorgathen, was in Brazil looking for “better conditions” for the sale of gas to that market.
“The response has not been what was expected, and in this situation, we We have focused on the contract, where one of its clauses states that if one of its parties is not satisfied with the price, that party can seek renegotiation,” Molina said.
He also assured that there are currently private companies in Brazil interested in buying Bolivian gas with prices between 15 and 18 dollars per million BTU.
In his opinion, another “mistake” of the interim government was accepting that YPFB cover the cost of shipping to the point of delivery, something that previously corresponded to Petrobras and that now it represents a loss of some 70 million dollars per year for the Bolivian state company.
Natural gas has been Bolivia’s main export product and the main source of support for the Bolivian economy in the last two decades, with its main markets in Argentina and Brazil.
In recent years there has been a decrease in production and income generated by the sale of hydrocarbons due to fluctuations in prices in foreign markets.
Jair Bolsonaro’s Statements About The Sale Of Gas From Bolivia To Argentina
Bolsonaro’s anger
The president of Brazil, Jair Bolsonaro, He was upset this week because Bolivia reduced the 30% delivery of gas to the South American giant to sell the fuel to Argentina and denounced that “everything is orchestrated“.
“Bolivia cut off 30% of our gas to deliver it to Argentina. How did Petrobras act in this matter? It seems that everything is orchestrated. If you have to buy gas elsewhere, it is five times more expensive. Who’s going to pay the bill? Who will be responsible? It is a business that seems to me orchestrated to favor you know who”, said the head of state, referring to Lula da Silva, his main competitor in the upcoming elections.
The video of Bolsonaro’s statements was published on the president’s social networks.
Petrobras had reported last week that the amount of gas sent by Bolivia had been reduced as of May. “Such a reduction of the order of 30% was not foreseen and implies the need to import additional volumes of liquid natural gas to meet the supply needs of Petrobras“, indicated the company’s text.
Meanwhile, Bolivia and Argentina signed a new natural gas purchase agreement in larger volumes and at a better price last April.
According to the local newspaper La Razón, La Paz -with this treaty- expects to receive an additional USD 100 million from Argentina in a conservative scenario and much more in the best case scenario.