UPI Energy Watch

Bolivia nationalizes its energy company

Bolivian President Evo Morales signed a decree nationalizing Empresa Petrolera Chaco.

The Bolivian energy company was controlled by Pan American Energy LLC. Then in 2006, Bolivia's state oil company, YPF Bolivianos, received a 49 percent stake in Chaco, after Morales nationalized state pension funds.

Now, for $43.1 million, budgeted by Morales for the takeover, Bolivia wholly owns Chaco, the Calgary Herald reports.

"Some petroleum companies don't respect the Bolivians," Morales said. "We're going make them respect us by seizing all their shares."

Pan American said it will defend its interests in Chaco, the Buenos Aires-based company said.

Petrobras will invest billions more in pre-salt exploration

Brazil's state-owned energy company Petrobras announced plans to increase its future investments to $174.4 billion between 2009 and 2013.

The increased investments include $104.6 billion in exploration and production, $43.4 billion for downstream development, $11.8 billion for gas, $5.6 billion in petrochemicals, $3 billion in distribution and $2.8 billion in biodiesel, Petrobras Chief Executive Officer Jose Sergio Gabrielli said.

Those numbers could fall, however, as Petrobras looks for ways to cut back project costs, Gabrielli said. Petrobras used $42-per-barrel oil as its starting point for calculating investments, and if oil prices fall lower, those numbers could change as well, Business News Americas reports.

Petrobras also plans to borrow about $18.1 billion of its total investments.

About $28 billion of the funding for exploration and production is going to be directed to developing oil and gas in the pre-salt layer. That is an increase of nearly 61 percent over the investments that were planned for 2008 through 2012.

Output of oil at pre-salt fields is expected to reach 219,000 barrels per day in 2013 and increase further to 582,000 bpd in 2015 and 1.82 million bpd in 2020.

"Those projections take into account the knowledge we have at the moment of the pre-salt reservoirs. Our goal is to develop new production and ways to reduce exploration costs in the pre-salt layer," Gabrielli said.

In addition to the Tupi pilot project, scheduled for commencement in 2010, Petrobras will implement the Tupi 1 and Guara 1 in 2012 and Iara 1 in 2013, all in the Santos basin.

In 2008 Petrobras produced 2.4 million bpd, and the company expects production to increase to about 3.65 million bpd in 2013, 4.63 million bpd in 2015 and 5.73 million bpd in 2020.

CNPC expands its global business

The China National Petroleum Corp. has greatly expanded its overseas business over the past year, and the company will use 2009 to focus on oil and gas prospecting and development of large oil and gas projects in its foreign ventures.

By the end of 2008 CNPC held oil and gas businesses in 29 countries, Xinhua reports, and it is involved in 75 cooperative projects in those countries. The ventures are in what CNPC calls its five oil and gas cooperative zones: Central Asia, Africa, South America, the Middle East and the Asia-Pacific region.

Wang Dongjin, deputy general manager of CNPC, said the international financial crisis has caused demand for oil, and thus oil prices, to significantly drop in recent months. Despite the gloomy outlook, Dongjin said CNPC will face those challenges in its international business in the new year.

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Closing oil prices, Jan. 26, 3 p.m., London

Brent Crude oil: $43.18

West Texas Intermediate crude oil: $43.13

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(e-mail: energy@upi.com)