FOREIGN PROJECTS

Bolivia

Gazprom contributes to the development of the Bolivian fuel and energy sector

Strategy

As a global energy company, Gazprom follows a development strategy aimed at building the entire value chain from production to sale of hydrocarbons in new markets by using production capacities outside Russia.

As part of this strategy, the Company contributes to the development of the Bolivian fuel and energy sector.

Cooperation

In 2007, Gazprom and the Bolivian state-owned petroleum company Yacimientos Petroliferos Fiscales Bolivianos (YPFB) signed a Memorandum of Understanding providing for cooperation in hydrocarbon exploration and development within Bolivia, possible participation in infrastructure projects, including for the purposes of LNG production, and advanced training and education of oil and gas professionals.

Gazprom's interests in Bolivian projects are represented by Gazprom International, a specialized company aimed at implementing hydrocarbon prospecting, exploration and development projects outside Russia.

Since 2008, Gazprom, YPFB, and Total have been running a hydrocarbon exploration project in the Azero block.

In 2010, Gazprom joined a hydrocarbon development project in the Ipati and Aquio blocks. The project’s shareholding structure is as follows: Gazprom – 20 per cent, Total – 50 per cent, Tecpetrol – 20 per cent, and YPFB – 10 per cent.

A number of documents were signed in June 2018.

In June 2018, Gazprom and Yacimientos Petroliferos Fiscales Bolivianos (YPFB) signed an Agreement of Strategic Cooperation. The document outlines the companies’ interaction in a variety of areas: geological exploration, gas production and hydrocarbons transportation across Bolivia; development of the country’s oil and gas transportation infrastructure, NGV market; sharing of experience, staff training and sci-tech cooperation.

In the same month, Gazprom International B.V. and YPFB inked a Term Sheet regarding the contract for oil and gas exploration and production services in the Vitiacua block. The signing will allow the companies to start drafting the main design documentation.

A series of documents was signed in 2016 with the aim of broadening energy cooperation between Gazprom and Bolivia.

Gazprom and YPFB entered into the Agreement on strategic cooperation. The Agreement envisages collaboration in the exploration, production and transportation of hydrocarbons, construction and upgrading of oil and gas infrastructure, as well as building of power generation capacities in Bolivia. In addition, the Agreement covers joint efforts for the Bolivian NGV market development and scientific and technical cooperation.

Gazprom and Bolivia’s Ministry of Hydrocarbons and Energy signed the Agreement on updating the General Scheme for the Bolivian gas industry development until 2040. The General Scheme outlines the development areas for Bolivia’s fuel and energy sector in the field of hydrocarbon exploration, production, processing, transportation and marketing.

Gazprom and Bolivia’s Ministry of Hydrocarbons and Energy also inked the Memorandum of Understanding to promote the use of liquefied natural gas. The document reflects the intent of the parties to implement projects aimed at using natural gas as a fuel in passenger, freight and river transportation in Bolivia, as well as for autonomous gasification purposes.

Gazprom, YPFB, and Bolivia's Ministry of Hydrocarbons and Energy approved the Roadmap outlining the key activities for implementing projects in Bolivia.

Reserves

Bolivia is the third largest country in Latin America in terms of proven natural gas reserves, which amount to some 297 billion cubic meters.

Geological exploration in Ipati block
Geological exploration in Ipati block

Geological exploration in Ipati block

Project implementation

Exploration in the Ipati and Aquio blocks started in 2010. In 2011, the Incahuasi field – one of the largest gas and condensate fields in Bolivia – was discovered within those blocks.

In September 2016, the Incahuasi field was brought into commercial production.

Drilling at Incahuasi 3 well
Drilling at Incahuasi 3 well

Drilling at Incahuasi 3 well

The field’s first production stage has seen the construction of three wells, a comprehensive gas treatment unit with a daily output of 6.9 million cubic meters, an in-field pipeline system, and an integrated production control system. A 100-kilometer gas pipeline has been built to connect Incahuasi to the Bolivian trunkline system.

In late 2016, the field’s daily gas output reached the planned rate of 6.5 million cubic meters.

Geological exploration is taking place at the Azero block.