With production down, Bolivia is offering 15 blocks in five geological provinces in its 2012 licensing round.
For the first time since Evo Morales was elected president and partially nationalized the oil and gas industry, Bolivia is conducting a licensing round.
Yacimientos Petroliferos Fiscales Bolivianos (YPFB) opened the 2012 Exploration Bidding Round on June 11 with the sale of bidding conditions, study agreements, and data packages for 15 blocks in five geological provinces. The company is targeting oil prospects.
YPFB is offering five blocks under E&P contracts and 10 blocks under research agreements. The E&P contract, also known as a risk service contract, allows systematic exploration and exploitation of hydrocarbons. Document sales for these contracts end Aug. 10.
Under a research agreement, a company can evaluate the hydrocarbon potential and identify exploitation opportunities that would lead to an E&P contract. Sales of these documents end July 6. The research agreements must be completed within one year, at which time a company can opt to sign an E&P contract.
Presentation of documents for qualification for the study agreements is July 27, when the envelope-opening ceremony will be held. Notification of the winning bids will be made on Aug. 7. Contracts will be signed between Aug. 8 and Oct. 5.
For the E&P contracts, documents must be submitted by Sept. 14. The envelope-opening ceremony will be the same day. Companies will be notified of winning bids on Sept. 24. Contract signings will be held between Oct. 1 and Nov. 30.
The five blocks offered as E&P contracts are: Cedro, La Guardia, and Alegria in the Foothills province; Huacareta in the Southern Subandean province; and Madre de Dios in the Madre de Dios Basin.
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| The blocks being offered are aimed at oil prospects. (Map courtesy of YPFB) |
The 10 blocks under the research agreement are: Carandaiti and Ivirza in the Foothills province; Pelicano in the Southern Subandean province; Coipasa and Corregidores in the Altiplano province; Cobija, Manuripi, and Nueva Esperanza in the Madre de Dios Basin; and Litoral and El Chore in the Beni Plain province.
Wells have been drilled and seismic lines have been shot in all the provinces. In the Foothills, producing oil wells are near the Cedro, Carandaiti, and Alegria blocks.
YPFB estimated prospective resource potential of over 60 Tcf of gas and 2.5 Bbbl of oil.
As part of the new bidding round, the E&P contracts require that YPFB have 51% or more of a joint venture, while the investing company would have 49% or less. Taxes and royalties include: 25% companies utility tax with tax regulation for upstream activities determining a straight-line depreciation over a few years to encourage oil operations; 18% royalties; and 32% direct tax on hydrocarbons. Each E&P contract must be approved by the Bolivian congress.
Bolivia is seeking to attract international oil companies into the country. Following the nationalization decree in May 2006, companies operating in Bolivia had to renegotiate contracts with the government.
Dry natural gas production peaked in 2007, dropping to 518 Bcf in 2008 and 446 Bcf in 2009. Production rebounded in 2010 by about 10%, according to the Energy Information Administration (EIA).
Between 2007 and 2010, domestic oil production declined by nearly 25% with Bolivia moving from net exports to net imports of oil. Production rebounded in 2010. Statistics from YPFB indicated that production of natural gas liquids more than offset the decline in crude oil production, EIA noted.
In March 2011, YPFB signed exploration contracts with Petrobras and Repsol-YPF for three blocks each in the gas-prone southern region. However, no other bidding rounds were conducted.
Details of the bidding round are available at the YPFB website.
Contact the author, Scott Weeden, at sweeden@hartenergy.com.
