Russia continues to spread its tentacles in Latin America by signing a gas deal with Bolivia with its state oil company Gasprom. Last Monday, Bolivian state-run petrol firm Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) and Gasprom have agreed to be partners in gas exploration in the Andean region. The deal is estimated to be around $2bn, and the exploration activities are expected to start from the gas-rich region of Tarija which is understood to have vast reserves.
Stanislav Tsygankov, the head of Gazprom’s international business department in Latin America stated that the country was under the radar of the company since sometime back, on account of considerable energy reserves. This deal would be a fillip to the Bolivian economy which is in desperate need of foreign investments. Bolivia with its large natural gas reserves, the business partnership, is believed to tide over the lower influx of foreign investments. Their left-wing president, Evo Morales is heavily betting on the pact because his decision to nationalize the hydro-carbon industry has substantially reduced foreign investments to the country.
The deal which is signed in the presence of Morales by Tsygankov and YPFB president Santos Ramirez hopes to meet the orders from Argentina and Brazil. Bolivia has the second largest gas reserves in South America after Venezuela, with proven reserves of 680 billion cubic meters. Brazil per day requires between 27 and 30 million cubic meters and Argentina needs about 10 million cu m.
The exploration is largely expected to produce more than the current orders and the excess could be utilized for the energy needs of the country. The pact is considered to be the first step towards Gasprom’s plan of executing the trans-continental pipeline project which passes through Bolivia, and includes Brazil, Argentina and Venezuela.