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  HOME | Bolivia

Bolivia, Spain’s Repsol Hail Strategic Partnership
Bolivian President Evo Morales and the chairman and CEO of Spanish energy giant Repsol, Antonio Brufau, joined executives of British Gas and Argentina’s Pan American Energy for the inauguration a gas-processing plant at the large Margarita gas field in southern Bolivia, a facility that will enable increased exports to Argentina

By Javier Aliaga

MARGARITA GAS FIELD, Bolivia – Bolivian President Evo Morales and the chairman and CEO of Spanish energy giant Repsol, Antonio Brufau, praised one another as strategic partners during a ceremony held just hours after La Paz nationalized an electricity distributor owned by Spanish utility REE.

Morales and Brufau joined executives of British Gas and Argentina’s Pan American Energy Tuesday for the inauguration a gas-processing plant at the large Margarita gas field in southern Bolivia, a facility that will enable increased exports to Argentina.

“I want to salute Repsol’s CEO. His presence, his effort, his work, as partners,” Morales, who had arrived two hours late after announcing the nationalization of Transportadora de Electricidad during a May Day event in La Paz, told those attending the ceremony.

“I recognize and we recognize the leadership of Repsol, one of the world’s largest international companies, and its investments always will be respected as a partner,” Morales added to applause.

Bolivia needs investment and partners, “but not owners of our natural resources, nor owners of our basic services,” the leftist president said, reiterating remarks he has made since coming to power more than six years ago.

Brufau, for his part, said he was pleased to deliver the new plant, which is located in the southern province of Tarija and will process more natural gas bound for Argentina.

He added that the inauguration of the facility is a concrete sign of the consolidation of Repsol’s relationship with Bolivian state energy firm YPFB and with the Bolivian government, which he described as a “strategic partner.”

Bolivia exports around 7 million cubic meters per day (245 million cubic feet per day) to Argentina and that total will climb to 11.6 million cmd thanks to the new plant.

The present contract covering Bolivian gas exports to Argentina stipulates that the volume should increase to 27.7 million cmd by 2017.

Brufau said the new plant will enable production at the Margarita field to increase from 3 million cmd to 9 million cmd, adding that a third plant will later be built with the goal of lifting output to 15 million cmd by 2014.

Repsol and its partners invested $600 million in the plant’s current phase and plan to invest another $660 million in a second phase.

Brufau did not allude to the ongoing dispute over the Argentine government’s decision last month to expropriate a controlling stake in oil firm YPF from Repsol, nor to the Bolivian government’s move to nationalize REE’s 99.94 percent stake in Transportadora de Electricidad and send in the military to take over TDE’s facilities.

Morales used the same justification in seizing TDE as President Cristina Fernandez did in grabbing a controlling stake in YPF, with both leaders citing inadequate investment by the Spanish company in question.

The inauguration of the Margarita field’s second processing plant had been scheduled prior to Argentina’s April 16 announcement of its decision to nationalize YPF.

Margarita and the neighboring Huacaya field make up the Caipipendi block, which Repsol operates with a 37.5 percent stake and whose other partners include BG and Pan American Energy with 37.5 percent and 25 percent interests, respectively.

The Margarita field is located in Bolivia’s Chaco region, where temperatures can soar to as high as 50 C (122 F), although they climbed only slightly above 20 C (68 F) on Tuesday.

One of Bolivia’s largest natural gas fields, Margarita has 3 trillion cubic feet of proven reserves.

In November 2011, Brufau informed Morales during another visit to that same field that Repsol planned to invest $640 million in Bolivia in the 2010-2014 period.

Shortly after taking office, Morales pushed through a takeover of Bolivia’s natural gas sector on May Day 2006, a move that involved requiring foreign energy companies – including Repsol and Brazil’s Petrobras – to become minority partners in joint ventures with state-owned YPFB.

Some local media have commented that that “nationalization” decree enjoyed the support of most Bolivians and the country’s labor unions, while six years later May Day was observed at a Repsol-owned plant while workers protested against the government in the street.

Doctors and public health workers have clashed with police in recent days during protests over an increase in their work day from six to eight hours, while marches by miners and public school teachers also have been held to demand higher pay raises.

Hundreds of Amazon Indians, meanwhile, are marching to La Paz to demand that Morales permanently abandon plans to build a Brazil-funded highway in the Tipnis national park. EFE
 

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