Petrobras Says Bolivia Operations Normal 'So Far'

Reuters ^ | June 9, 2005

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RIO DE JANEIRO, Brazil (Reuters) - Brazil's state oil company Petrobras (PETR4.SA: Quote, Profile, Research) (PBR.N: Quote, Profile, Research) said on Wednesday its operations in Bolivia had not been hurt so far by civil unrest in the neighboring Andean country.

Its two refineries and the production and export of natural gas in Bolivia -- its biggest investment in the country -- are operating under normal conditions, the company's press office said.

Nevertheless, it later said protesters had occupied a terminal owned by a another company, Transrede, where it stores liquified gas from the San Alberto and San Antonio gas fields in the province of Santa Cruz. Petrobras said production had not been interrupted but could be in the future if the occupation continues.

Brazil's Mining and Energy Ministry also said it was preparing a contingency plan in case natural gas supplies to Brazil are interrupted by the Bolivian crisis.

Petrobras has invested $1.5 billion in Bolivia and is currently the country's largest company and a major investor. Among others, it operates the San Alberto and San Antonio fields, which have an estimated 22 trillion cubic meters of gas reserves, or about 40 percent of Bolivia's total reserves.

Security at the company's units in Santa Cruz de La Sierra and Cochabamba was reinforced last month after a car bomb exploded near one facility on May 13.

"There is no violence in those two cities and, as such, there has been no need to remove our employees," a Petrobras spokeswoman said.

Most of the turmoil in Bolivia has occurred in the capital, La Paz, where peasant and indigenous groups are protesting to demand nationalization of the country's energy resources. President Carlos Mesa volunteered to resign late Monday to quell the chaos.

On Wednesday, shares of Spanish oil and gas company Repsol YPF (REP.MC: Quote, Profile, Research) fell as investors worried the political and social instability would affect the company's investments.

But analysts said Petrobras' stock price should not suffer as much from the Bolivian crisis because the company's business there does not account for a large part of its reserves.

Last month, Petrobras announced it would reduce investments in Bolivia after the country's Congress approved a sharp tax hike on hydrocarbons.

[Erik Latranyi]

Environmentalists and communists unite to destroy the stability of South America.

The continued Castro-Chavez alliance will lead to great turmoil over the next decade in this growing region of the world, especially since so much of the world's oil now comes from South America.

[ncountylee]

Much of South and Central America strives to adopt the sub-Saharan national model. Best of luck guys.

[E Rocc]

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Most of the turmoil in Bolivia has occurred in the capital, La Paz, where peasant and indigenous communist groups are protesting to demand nationalization theft of the country's energy resources.

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-Eric