La Paz – The Bolivian government is studying hiking the price of the natural gas it sells to Brazil and Argentina by more than 30 percent, but it said that the increase must be negotiated with the authorities in those two countries, a La Paz daily reported on Sunday.
La Razon carried the remarks socialist Bolivian President Evo Morales made on the subject at a coca growers union meeting on Saturday in the central city of Cochabamba.
In his speech to the union members, Morales said that raising the price of 1 million BTUs of gas by $1.00 – to some $4.25 or so – could bring in “almost $300 million” per year in additional revenues to the state’s coffers, a sum that would allow his government to eliminate the country’s fiscal deficit.
The paper said that upon being asked about the possibility of increasing the gas price by $2.00 – to about $5.25 per million BTUs – Morales said that option would be reviewed by a technical committee.
“There are agreements that Bolivia has, particularly with Brazil, not as a firm but at a state,” Morales, saying that the 1999 gas contract with the Latin American giant could be reviewed because it has a clause allowing such a measure.
The document says that the contract must be renegotiated every five years, and Morales denounced the fact that previous Bolivian presidents had not wanted to do that.
“Fortunately, the leaders of Argentina and Brazil accept the review,” which will be the primary task of the Bolivian government after last Monday’s decree nationalizing the country’s energy sector, a move designed to increase La Paz’s portion of the profits from foreign firms’ exploitation of natural gas here, Morales added.
Bolivia has some 48.7 trillion cubic feet of gas reserves, South America’s second-largest deposits after Venezuela, which has known reserves about three times as large.
Meanwhile, the daily La Prensa reported Sunday that the Bolivian government intends to double the price of gas, using the $7 per million BTUs that Chile could pay for liquified natural gas from overseas.
The prices Bolivia charges to its two main foreign gas customers are currently $3.26 per million BTUs for Brazil and $3.19 for Argentina, La Prensa said.
Bolivia sells Brazil about 26 million cubic meters (916 million cubic feet) of gas per day, and Argentina buys 6 million cubic meters (211 million cubic feet) per day, but the governments of those nations are interested in substantially increasing their Bolivian gas imports over the next few years.
However, Brasilia and Buenos Aires have begun to change their opinion in the face of the potential price hike and Morales’ recent nationalization of the energy sector, a move that directly affects Petrobras, one of the multinationals operating in Bolivia.
Meanwhile, Brazilian presidential advisor Marco Aurelio Garcia said in an interview published Sunday in Folha de Sao Paulo that Bolivia “would be killing the hen laying the golden eggs” if a mutual agreement is not reached regarding gas purchases.
“They would also have serious technical problems” because if Brazil stops importing Bolivian gas “in the gas extraction process the liquid fuels are removed (and) if they don’t export (it), they will have to burn it and they don’t have the mechanisms for that,” he said.
Garcia said that Bolivia’s energy nationalization and a hike in gas prices – if they result in a falloff in Brazilian gas imports – would leave La Paz with few alternatives, since Brazil is its largest market.
“If we stop importing, Bolivia would have a gigantic problem,” he said, adding that Brasilia will not accept a unilateral gas price increase.
Brazil imports 70 percent of the natural gas it consumes from Bolivia, and Petrobras is the largest foreign investor in the neighboring country having ploughed in about $1.5 billion there.
The Brazilian government’s somewhat tepid reaction to Bolivia’s energy nationalization, meanwhile, has unleashed a flood of criticism by opponents of the socialist administration in Brasilia.
Energy experts and observers have called the Bolivian move a “slap in the face” which points up the political myopia of President Luiz Inacio Lula da Silva’s socialist administration, which they said thought that Morales’ “ideological affinity” and leftist populist agenda would not harm Brazilian interests. EFE
