The Spanish oil company Repsol will invest Ôé¼400 million over the next five years to boost natural gas production in Bolivia, it has been announced.
Production is to be upped on the Margarita and Huacaya fields in the south of Bolivia from two million cubic metres of gas a day to eight million cubic metres a day by 2012 and 14 million cubic metres a day by 2013.
The increased production levels will be used to increase exports to Argentina as well as to supply Bolivia's domestic market.
The Caipipendi gas block which contains the twin fields contains a proven 3.7 trillion cubic feet in hydrocarbon reserves, according to Repsol. However, the total amount may be closer to 12 trillion cubic feet.
The money will be used to drill natural gas wells, build pipeline infrastructure and a natural gas processing plant.
Repsol made the announcement after its CEO Antonio Brufau met the Bolivian President Evo Morales in La Paz.
Repsol holds a 37.5 per cent operating stake in the twin fields, as does UK-based BG Group. The Argentine company Pan American Energy holds the remaining 25 per cent.
Repsol will now become the leading investor in Bolivia's natural gas sector in the next five years.
Bolivia has the second largest reserves of natural gas in South America after Venezuela and is the region's main exporter, supplying the fuel to Argentina and Brazil.
It exported over $3 billion worth of natural gas to Argentina and Brazil in 2008 but has recently been hit by falling prices and lower demand from Brazil.
Madrid-based Repsol has operations in 29 countries worldwide, with over 35,000 employees. Its profits in 2008 were close to Ôé¼2.7 billion.
It is the fifteenth-largest petroleum refining company in the world.
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