Petrobras critical of Bolivia's hydrocarbon decree

Peter Howard Wertheim
OGJ Correspondent

RIO DE JANEIRO, Sept. 14 -- Brazil's state-owned Petroleo Brasileiro SA (Petrobras) has issued a statement vehemently criticizing Bolivia's Sept. 13 decree that consolidates state ownership of hydrocarbons sold in Bolivia's internal market.

The measure reduces Petrobras's profit margins at two refineries and gives Bolivian state-owned energy firm Yacimientos Petroliferos Fiscales (YPFB) powers to set domestic fuel prices.

"The establishment by Bolivia of new conditions for oil and liquefied petroleum gas production, transportation, refining, storage, and marketing, which encompass all of the byproduct price chain stages, is unacceptable," Petrobras protested.

The Brazilian company, disagreeing with the measure from legal, operational, and financial viewpoints, said the decree renders its refining business in Bolivia completely unviable.

Petrobras complained that the refining margins established by Bolivia's hydrocarbons superintendence in May 2005 were already insufficient to cover Petrobras's costs and that its requests to review these margins have not resulted in any changes by Bolivia.

Petrobras contends it was able to keep Bolivia's domestic market supplied—despite financial losses—only because of "the favorable conjuncture of the international price for exported products (gasoline and reconstituted oil)."

In its communiqué, Petrobras claims it achieved average gains of only $14 million for an initial investment of $105 million, values that contradict Bolivia's accusation that Petrobras had "extraordinary profits."

The Brazilian company also stated that Bolivia's new decisions "placed in jeopardy" the normal maintenance of Petrobras's activities in Bolivia.

Petrobras officials at the Rio Oil & Gas Expo in Rio de Janeiro said Petrobras might seek redress from an international court regarding Bolivia's latest decision. Brazil is heavily dependent on Bolivian gas imports of some 26 million cu m/day.

Petrobras and Bolivia have been negotiating compensations for the nationalization of Petrobras's two Bolivian refineries. The countries also were negotiating the price of Bolivian gas imported by Brazil. Bolivia sought to raise the gas price after it nationalized oil and gas reserves May 1.

Sources close to Brazil's Mines and Energy Minister Silas Rondeau said the minister's planned Sept. 15 trip to Bolivia with other Brazilian government officials may be canceled.

Related Articles

Western Australia taps Kimberley site for LNG hub

12/29/2008 Western Australia has chosen a site called James Price Point about 60 km north of Broome on the Kimberley coast to establish a proposed LNG hub for...

MMS chief hopes next president, Congress won't reinstate OCS bans

12/19/2008 US Minerals Management Service Director Randall B. Luthi said on Dec. 9 that he hopes the Obama administration and Congress seriously consider expa...

Pakistan plans $1 billion TAPI, IPI gas storage

12/17/2008 Pakistan says it will require $1 billion to build underground storage for gas to be imported from Iran and Turkmenistan, according to the country's...

MMS OCS Policy Committee plans first post-moratorium meeting

12/12/2008 The US Minerals Management Service's Outer Continental Shelf Policy Committee will hold its next meeting Dec. 9-10 at the Washington Dulles Crowne ...

BLM defends Utah lease sale as its state office defers more tracts

12/12/2008 The US Bureau of Land Management defended its scheduled Dec. 19 oil and gas lease sale in Utah on Dec. 2 as its state office deferred additional pa...

BLM Utah director defers lease parcels in response to Park Service concerns

12/12/2008 US Bureau of Land Management Utah State Director Selma Sierra agreed on Nov. 25 to defer from a Dec. 19 oil and gas lease sale all parcels of conce...

DOE appoints clean coal chief to lead fossil energy operations

11/28/2008 The US Department of Energy named Victor K. Der, a 35-year employee with DOE and its predecessors, as its new principal deputy assistant secretary ...

As BLM completes Utah resource plans, possible December lease sale draws fire

11/07/2008 New resource management plans for five of the US Bureau of Land Management's six Utah field offices received final approval on Oct. 31, while the s...

EPA diesel fuel emission reduction grants go to North, South Carolina

10/31/2008 The US Environmental Protection Agency presented grants of $295,320 each on Oct. 23 to North Carolina and South Carolina state agencies to establis...

White Papers

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

Available Webcasts



Global LNG: Adjusting to New Realties

When Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

When Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST



On Demand

The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected