Bolivia's interim government is hoping to salvage a commercial agreement with Russian fertilizer giant Acron to produce and distribute urea in Brazil.
Bolivia's state-owned YPFB and Acron signed a deal in October to acquire a urea plant from Brazilian state-controlled Petrobras. YPFB would supply 2.2mn cm/d of natural gas to the plant, located in Brazil's Mato Grosso do Sul state, and take a 12pc share in the operation. Acron signed on to distribute urea from the Bolivian company's 700,000 t/yr Bulo Bulo urea plant in the central Bolivia department of Cochabamba. Acron's investment was pegged at around $1bn.
The deal collapsed in early December, when Brazilian authorities blocked the plan for Petrobras to sell the urea plant, and another in Parana state, to Acron.
Despite the setback, Bolivia's new interim authorities are hoping the Acron deal can be revived.
"We have not closed the door on this and will try to reactivate it," Antonio Pino, Bolivia's deputy minister of hydrocarbons production and industrialization, told Argus.
Pino said the agreement was one of the casualties of the political crisis that gripped Bolivia after controversial 20 October elections and leftist former president Evo Morales' resignation on 10 November. Conservative interim president Jeanine Anez took over after Morales and his closest allies received political asylum in Mexico.
Unrest broke out after the elections that Morales claimed to have won. His supporters were blamed for attacking a domestic gas pipeline, forcing the shutdown of Bolivian industries, including the Bulo Bulo urea plant. The line was repaired this week, allowing the plant to resume operations, but distribution is stalled because of transportation problems, with some roadblocks erected by protesters still to be cleared and, more recently, trucking companies seeking higher pay.
Pino said the conflict spooked the Brazilians and they refused to go along with the YPFB-Acron deal because of concerns, which he described as unfounded, that Bolivia lacks sufficient gas reserves to sustain the project.
Under the new transition government, Bolivia's hydrocarbons ministry revised down the country's proven gas reserves to 8.95 Tcf in 2017 instead of 10.7 Tcf used by the previous government, applying a more conservative interpretation of certification data provided by Canadian consultancy Sproule.
Pino said Bolivia has enough gas reserves to satisfy the Acron project, as well to cover local demand and meet export contracts to Argentina and Brazil.
While still bullish on the potential deal with Acron, Pino said his office was reviewing a series of other projects, including the addition of methane and formaldehyde units at the Bulo Bulo site, and construction of a $2bn petrochemical complex in eastern Santa Cruz department to produce propylene, polypropylene, ethylene and polyethylene.
"We are commissioning feasible studies to look at markets and the cost of production. We need to make decisions based on technical criteria and market realities, not political considerations," he said.
By Lucien Chauvin
