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Learn more about the activities of Petrobras in Bolivia
Activities mapPetroleumworld
CARACAS
Petroleumworld.com 05 03 06
Highlights:
- Petrobras accounts for 24% of the tax collection, 18% of the GDP, and 20% of the direct investments in Bolivia.
- Petrobras operates 75% of the gas exports to Brazil, 46% of the natural gas reserves, 95% of the refining capacity, and 23% of byproduct distribution in Bolivia.
- The investments the Company and its partners made in Bolivia, from 1994 to 2005, add up to $1.5 billion, of which $1 billion were made by Petrobras alone.
- Petrobras produces 100% of the gasoline and 60% of the diesel fuel the country consumes.
Activities in Bolivia
Created in late 1995, Petrobras Bolivia commenced its operations in Bolivia in 1996 and, in less than a decade, it became the country's largest company. Petrobras' performance in Bolivia has a relevant participation in integrating the Southern Cone's natural gas and energy markets, as provided for by in the Company's Strategic Plan.
The total investments the Company and its partners have made in projects that have participation in Bolivia reached some $1.5 billion in the 1996/2005 period. Petrobras' participation in the Bolivian GDP is some 18%, while in tax collection it was 24%. From 1994 to 2005, Petrobras was responsible for some 20% of the direct investments made in Bolivia.
One of the important steps for Petrobras' international recognition was the construction, from 1997 to 2000, of the Bolivia-Brazil pipeline, beginning with the Letter of Intentions for the Bolivia-Brazil Energetic Integration, signed in 1991. With this, an integration flow was established for the Bolivian natural gas production Petrobras operates in the Bolivian territory, with the product being made available to the consumer market in Brazil. Meanwhile, Petrobras started Exploration and Production actions in the Bolivian mountains. Starting with these initiatives, the Company started operating in the entire gas production and commercial chain: production, procurement, and sales.
The emphasis placed on natural gas is justified internationally, considering it already totals 52.5% of Petrobras' new international discoveries and reserves abroad. Most of these reserves are currently located in Bolivia (158.39 billion cubic meters according to the SEC (Securities and Exchange Commission), or 46.6 billion cubic meters based on the SPE (Society of Petroleum Engineers) criteria.
The force of natural gas
Petrobras' business in Bolivia includes everything from natural gas Exploration, Production, and Marketing through the transportation system per Pipelines; Natural Gas processing units; Lubricant units; and byproduct Distribution.
Exploratory activities, in search of new oil and gas reserves, are undertaken in six of the nine Bolivian states (Tarija, Chuquisaca, Cochabamba, Beni, La Paz, and Santa Cruz de La Sierra). Petrobras Bolivia is also in charge of production at the giant San Alberto e San Antonio natural gas fields, in southern Bolivia.
Furthermore, the Company operates part of the natural gas transportation systems from Bolivia to Brazil and to the border between the two countries. It participates in the Transierra S.A. corporation, which operates the Yacuiba-Río Grande (GASYRG) pipeline, which, in connection with the Bolivia-Brazil Pipeline, ensures the natural gas production flow from the San Alberto and San Antonio fields, at current volumes of some 17 million cubic meters a day, of which some 6 million cubic meters a day belong to Petrobras. Petrobras ensures local gas supply at the Puerto Suarez border region through the pipeline that belongs to Transportadora Transmarcos S.A., which belongs to the Company.
Important in refining and distribution
Petrobras Bolivia is also in charge of operating two of Bolivia's largest refineries - Gualberto Villaroel, in Cochabamba, and Guillermo Elder Bell, in Santa Cruz de La Sierra - through its controlled company in Bolivia Petrobras Bolivia Refinación S.A. (PBR). Together, the two refineries process an average of 40,000 barrels of oil a day. This production supplies Bolivia's entire demand for special and Podium gasoline, 100% of the aviation fuel and kerosene demand, and it is in charge of upwards of 70% of the diesel fuel demand, rendering it the leader in the country's fuel market.
In addition to this strong presence in refining, Petrobras performs in Distribution via Petrobras Bolivia Distribución S.A. (PEBD). In Bolivia, it also markets the fuels processed at the two refineries and the Lubrax lubricant line products, produced in Cochabamba, at a lubricant plant that also belongs to the PBR. Lubrax has been increasing its participation in the total sales volume in the Bolivian market in this segment and, additionally, Petrobras uses the YPFB brand in Bolivia, the Bolivian market's lubricant leader. The Company also markets asphalt and paraffin in the country.
The company started placing the Petrobras brand on it chain of service stations in Bolivia in 2001. As a result, it revolutionized the country's supply system, introducing the Petrobras service station quality there. Up to that time, the Bolivia stations had no special attractions. With the service stations, sales reached 500,000 to 800,000 liters of gasoline a month, and the Petrobras brand established its market image and boosted its acceptance even further. In total, the Petrobras network in Bolivia corresponds to more than 100 of the country's 400 service stations.
Quality is the priority
Petrobras' performance in Bolivia also counts on international recognition for its operational quality and socio-environmental commitments. This primacy is due to the projects that have been developed and improved the productive processes; the use of new technologies, and the emphasis placed on efficiency, quality, and operation optimization; its employees' qualifications, currently adding up to approximately 750 people, among whom Brazilians, Argentines, Colombians, Bolivians, Ecuadorians, Dutch, and Uruguayans; the constant operational improvement; and the deployment of the Process Security Program (PSP). The company also has an important social role in Bolivia, supporting populations living in the needy Bolivian territory regions, in addition to sponsoring several socio-cultural and sports programs.
In the San Alberto and San Antonio natural gas fields, since July 30 2004, Petrobras Bolivia holds the international SA 8000 certification, a Social Responsibility norm for the fulfillment of ethical, labor and safety, environment, and health legislation requirements, obtaining the recommendation of the traditional TÜV Rheinland Group certifier. And it is the only Bolivian company to hold this certification. The company's other assets in the country already have the ISO 14001 (environment), OHSAS 18001 or BS 8800 (occupational safety and health) certifications. Meanwhile, PBR has held the ISO 9001 certification for the quality of the operations at the Gualberto Villaroel and Guillermo Elder Bell Refineries since 2001.
Activities in Bolivia in 2005
Petrobras' main focus in Bolivia is on natural gas exploration and production for exports, as part of the integration strategy for the Southern Cone markets. Bolivian production is fundamentally important to increase natural gas' participation in the Brazilian energetic matrix and Petrobras produces 25% of the total gas Bolivia exports to Brazil.
In 2005, while Petrobras' oil production in the country was 8.500 bpd, the natural gas production reached 7.75 million cubic meters a day, or 54,100 boed. Exports to Brazil, through the Bolivia-Brazil Pipeline, reached a total of 22.9 million cubic meters a day of gas, 6.1 million cubic meters of which marketed by Petrobras, in addition to 0.9 million cubic meters a day to Argentina.
Petrobras is associated with seven production blocks in Bolivia, and is the operator of six of them. When the new Hydrocarbons Law went into effect, in May 2005, the current concession agreements will be subject to operational changes. They still depend on regulation in order for the oil companies to be able to adjust to the new terms of the legislation the Congress approved.
The most important financial impact the new law has is the institution of the Direct Tax on Hydrocarbons, which taxes the product "at the well" at a 32% aliquot. Since royalties and other government participations already added up to 18%, the tax burden increased to 50%. The increase will have an important effect on the Company's exploration and production operations in the country.
Petrobras Bolivia is Bolivia's biggest company. Its operations were commenced in 1996, and it has significant participation in the Bolivian GDP and tax collections. It is acknowledged both for its operational quality and for its commitments to socio-environmental matters.
Source: Petrobras web
Petroleumworld 05 02 06
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