Senate postpones exploration contracts and puts the country's energy supply at risk

This MHE release was published using machine translation.

UCOM MHE 10-12-2023.- The Senate postponed the approval of three hydrocarbon exploration contracts in the departments of Chuquisaca, Tarija and Santa Cruz, which endangers the supply of energy in the domestic market and generates country risk. affect the execution of foreign direct investment, stated the Minister of Hydrocarbons and Energy, Franklin Molina Ortiz.

“With this decision, it postpones the execution of investments for $us 504.5 million, an estimated oil income of $us 1,514 million, in the event that they are successful, and logically there is the Direct Tax on Hydrocarbons (IDH), the royalties departmental benefits and all the benefits that the State requires,” said the authority when regretting that determination.

Last year, the Plurinational Legislative Assembly approved these contracts after extensive explanation and debate in the chambers of Deputies and Senators. A little over a month ago, bills 320, 321 and 322, related to oil services contracts signed between Yacimientos Petrolófilos Fiscales Bolivianos (YPFB) and the company Vintage Petroleum Boliviana Ltd., were approved without problems. Now it was the Senate's turn to comply with the formality, but it decided to postpone it.

“I don't want to think that this is a political attitude because we are talking about three oil contracts where YPFB does not assume risk, since the resources correspond to direct foreign investment,” stated Molina, who also pointed out that there is another additional element referring to the need that The country must increase reserves and production to reverse the decline in gas and liquids.

The first contract refers to the Sayurenda area, located in the department of Tarija, signed on January 20, 2023. This project foresees an investment of $us 57.4 million; 35.5 billion cubic feet (BCF) of recoverable resources and 2.8 million barrels (MMBBL); and $us 162.3 million from oil revenue.

The second contract will be developed in the Caraidanti area, located in the departments of Chuquisaca, Tarija and SantaCruz, signed on January 20, 2023, where Vintage will execute $194 million of investment; It projects 163.1 BCF and 10.9 MMBBL in recoverable resources, in addition to an oil income of US$650.9 million.

The third contract corresponds to the Yuarenda area, located in the department of Tarija, signed on January 20, 2023, where an investment of $us 252 million is expected; 171.3 BCF and 12.80 MMBBL of recoverable resources. Likewise, an oil income of $701.1 million is estimated.

The contracts make investments viable for the activities established in the Upstream Plan (exploration and exploitation) in the search for new hydrocarbon resources to increase production and increase reserves.