Bolivia renegotiates gas supply deal with Brazil to avoid penalties

Bolivian state oil company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) has ended a complicated negotiation with Petrobras to avoid fines and improve its revenue from daily gas exports to Brazil.

In June, Bolivia reduced its daily gas supplies to Brazil to increase supplies to Argentina at a lower price, exposing itself to sanctions even though the cuts were agreed upon with the Brazilian state-owned company.

The company said in a statement that a new addendum avoids potential fines and improves the weighted price for exported gas, providing more certainty for both the state-owned company and Petrobras. The new agreement is more flexible and provides certainty on gas volumes, said Armin Dorgathen, president of Bolivia’s state oil company.

After minerals, gas is Bolivia’s most important export, with revenues reaching US$2.249 billion last year.

The main markets are Brazil and Argentina, but stagnant production in recent years has made it difficult for the country to reach combined volumes, which are up to 20 million cubic meters per day in the case of Brazil and 14 million in the case of Argentina.

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