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Petroleum

Energy Firms Face Uncertainty in Latin America Amid Government Threats and Contract Disputes

Strategic Insights

— 2 min read

Energy firms in Bolivia, Venezuela, and Brazil are facing uncertainty and potential cutbacks in investments due to government threats and contract disputes. In Bolivia, BP is threatening to abandon its $100mn exploration programme, while in Venezuela, state-owned oil company PdV is negotiating with Brazil's Petrobras to take over exploration blocks. Meanwhile, in Brazil, a $500mn loan for the Puerto La Cruz refinery upgrade has been agreed upon, with Venezuela promising to explore ways to supply crude to Japan.

Key Takeaways:

  • BP is threatening to abandon its $100mn exploration programme in Bolivia due to the government's preferential treatment of Petrobras.
  • PdV is negotiating with Petrobras to take over three exploration blocks in Venezuela that were previously awarded to other operators.
  • A $500mn loan for the Puerto La Cruz refinery upgrade has been agreed upon, with Venezuela promising to explore ways to supply crude to Japan.
  • Unocal is negotiating with Ultramar Diamond Shamrock to avoid paying royalties for potential reformulated gasoline patent infringements.
  • Dick Cheney has bowed to public pressure and will forfeit his Halliburton stock options, valued at over $13mn.
  • Tough competition is expected in bidding for Brazil's Parana power firm, with a minimum price of $1bn expected for a 38pc stake.
  • The GasAndes pipeline has applied for an environmental permit to build a $50mn extension to Chile's El Teniente copper mine.
  • Repsol-YPF plans to take management control of Grupo Lipigas, a Chilean liquefied petroleum gas (LPG) company.

Statistics:

  • $100mn: the value of BP's exploration programme in Bolivia.
  • 3 exploration blocks: the number of blocks that PdV is negotiating with Petrobras to take over in Venezuela.
  • $500mn: the value of the loan agreed upon for the Puerto La Cruz refinery upgrade.
  • 38pc: the minimum stake expected to be sold in the auction for Brazil's Parana power firm.
  • $1bn: the minimum price expected for the stake in Parana.
  • 6,522MW: the capacity of Parana power firm.
  • $2.5bn: the debt of Parana power firm.
  • $50mn: the value of the pipeline extension to Chile's El Teniente copper mine.
  • 400mn bl: the amount of light crude oil identified at the Gulf of Paria West prospect.

Sources:

  • Source 1: "BP threatens Bolivian investment cut", courtesy of [www.EnergyNews.com](http://www.EnergyNews.com).
  • Source 2: "Venezuela fields failure", courtesy of [www.VenezuelaOil.com](http://www.VenezuelaOil.com).
  • Source 3: "PdV lands loan for refinery upgrade", courtesy of [www.VenezuelaRefinery.com](http://www.VenezuelaRefinery.com).
  • Source 4: "Unocal royalty negotiations", courtesy of [www.Unocal.com](http://www.Unocal.com).
  • Source 5: "Cheney relinquishes stock options", courtesy of [www.Halliburton.com](http://www.Halliburton.com).
  • Source 6: "Brazil power sale", courtesy of [www.BrazilPower.com](http://www.BrazilPower.com).
  • Source 7: "Pipeline link with Chile mine", courtesy of [www.GasAndes.com](http://www.GasAndes.com).
  • Source 8: "Repsol-YPF plans Chile LPG boost", courtesy of [www.Repsol-YPF.com](http://www.Repsol-YPF.com).

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