South America: Bolivia

SOUTH AMERICA

Stuart Wilkinson, Contributing Editor

Bolivia

In 1999, the country moved to austere economic policies that have controlled the fiscal deficit and set the stage for improved economic growth this year. However, social unrest has erupted. Spending cuts will continue throughout this year and 2001. Growth for 2000 is estimated at between 4% and 5%.

Exploration. TotalFinaElf (operator, 41%), Mobil (34%) and TESORO Bolivia (25%) confirmed a significant gas discovery with their Itau X1A well, located in Block XX West near the Argentine border and close to the Bolivia-Brazil gas pipeline. Plans are to ship the gas mainly to Brazil, but also to the Southern Cone.

In the August 1999, annual exploration round, Argentina’s Pluspetrol was the only participant. The company made a $3.6-million bid for the Candua Block in the southern Chuqusaca region. The fourth exploration tender should be held by August 2000.

Repsol-YPF announced that the company and partners, British Gas and ARCO, made an oil and gas discovery in the Caipipendi Block in southern Bolivia. Located near the Bolivia-Brazil gas pipeline, the well flowed nearly 71 MMcfgd and 2,300 bopd. Estimated reserves are more than 300 million boe.

Gas development. Bolivia is moving toward being the gas hub for the Southern Cone. The country should have little trouble increasing its gas sales to Brazil, filling the Bolivia-Brazil gas pipeline to its 1.06-Bcfd capacity by 2004. Petrobrás has exercised its option as a preferred customer – against third parties – to supply additional gas coming from new Bolivian discoveries.

Production. In 1999, direct foreign investment in the country’s hydrocarbon sector rose 20.9%, to $629.8 million, from the previous year. This sector captured over two-thirds of direct foreign investment in the country. Recent discoveries of gas deposits in Tarija, near the Argentine border, prompted this increase.