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Gazprom Joint Venture in Bolivia
Gazprom will form its first joint venture in South America with the Bolivian Yacimientos Petroliferos Fiscales Bolivianos and the French company Total for the exploration and production of natural gas in the southeast of Bolivia. Bolivian authorities are promising Gazprom and Total 49 percent of the proceeds from the new company. Other foreigners working in the country only have received only 18 percent of the income from gas sales since President Evo Morales came to power in 2005. In exchange, Gazprom and Total will invest $4.5 billion in the project and will own 24.5 percent in it. The project is expected to raise the country’s annual gas production from 8.5 billion cu. m. to 18 billion cu. m.
Gazprom and YFPB signed a memorandum of understanding in February 2007. Under that document, Gazprom will also be able to participate in the construction of gas liquefaction plants and distribution networks. Gazprom has chosen Sunchal, Acero and Carohuaicho blocs in the Subandino Sur basin with reserves of 300 billion cu. m.
The generous terms for the new joint venture are probably a response to political instability in Bolivia. Last month, Morales announced a referendum would be held in the country on dividing income to favor poor regions of the country more strongly. The prosperous Santa Cruz, Beni and Pando Districts, where the gas fields are located, quickly announced their own referendum on autonomy. Gazprom has no agreements with local authorities there. The project will not be highly profitable. Gas at the Bolivian-Argentinean border costs about half as much as it does at the Russian-EU border.
www.kommersant.com
All the Article in Russian as of Sep. 22, 2008
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