LA PAZ, Aug 21 (Reuters) - Bolivia plans a multi-billion dollar fund to lure new investment in oil and gas exploration in the Andean country which depends heavily on energy revenues to finance its budget, two local newspapers reported on Friday, citing the energy minister.
Natural gas accounts for roughly half of Bolivia’s total exports, but reserves have shrunk due to under-investment and a lack of new finds, raising questions over the country’s ability to honor export contracts and sustain high levels of domestic spending.
Energy Minister Luis Alberto Sanchez said the fund, which needs to be approved by Congress, would be worth $3.56 billion over the next decade, with an initial $988 million available for the 2015-2020 period, the local El Deber and La Razon dailies reported.
Bolivia forecasts total oil and gas revenues of $62 billion dollars in the ten years until 2025 but the provision of finances to incentivize exploration risks could lift this figure by up to a third, the minister said.
“Between 2015 and 2025, petroleum revenues will be about $62 billion. With an investment of about $3 billion to incentivize investments, by either (state-run) YPFB or private operators, revenues will increase by an additional $23 billion,” the newspapers quoted Sanchez as saying.
Sanchez made his comments in the provincial city of Santa Cruz on Thursday evening. He did not provide any details on the conditions under which the fund’s finances would be disbursed.
Guillermo Acha, the president of state energy company YPFB, in July forecast additional natural gas reserves of 30 trillion cubic feet (tcf) by 2025, compared with the current level of 10.5 tcf.
Socialist President Evo Morales nationalized the energy sector shortly after assuming power in 2006. Foreign companies are allowed a stake in YPFB projects. (Reporting by Daniel Ramos; Writing by Richard Lough; Editing by Meredith Mazzilli)