Bolivia's YPBF is considering entering the natural gas retail distribution market in Brazil, which is opening the sector to competition, an executive at the Bolivian state-run gas company said on Friday. Brazilian state-controlled oil company Petroleo Brasileiro's plans to limit its natural gas transport operations, selling assets such as pipelines in a bid to reduce the heaviest debt load of any energy company in the world.
"To the extent that Petrobras ceases to be the main actor in gas sales, we are obviously going to fight to reach the final customer," YPBF CEO Oscar Javier Barriga said on the sidelines of a gas exporting countries' summit in Santa Cruz, Bolivia. "We aren't just going to sell, and try to sell to various clients; YPFB is going to set up shop in Brazil to be able to sell directly too," he added.
Bolivia believes it could sell as much as 45 million cubic meters per day in Brazil, Barriga said. Rising gas production in Brazil means that Petrobras, which currently buys gas from Bolivia and then distributes it through its own network, is not using as much as it could contractually from Bolivia. But that contract, which expires in 2019, has been under renegotiation for six months, Barriga said, adding that Petrobras has until the end of the year to declare its interest in renewing it.
"That will be the moment when we make decisions about what volume will go to Petrobras and which will go to new clients," he said. Nevertheless, YPFB, a long-time supplier to Brazil, has seen its reserves plunge by 57 percent over the last decade, raising questions about its ability to ramp up Brazilian supplies.
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