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Page added on June 29, 2006

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Argentina Agrees to Pay Bolivia 47 Percent More for Natural Gas

June 29 (Bloomberg) — Argentina agreed to pay Bolivia 47 percent more for its natural gas as Bolivian President Evo Morales, who seized his country’s gas supplies two months ago, fulfills a campaign pledge to boost oil and gas revenue.

Argentina, after a meeting between Morales and Argentine President Nestor Kirchner, agreed to pay $5 per million British Thermal Units, up from $3.4 per million BTU, through 2006. Bolivia will increase supply to 7 million cubic meters a day from 5 million cubic meters a day while the countries negotiate next year’s prices before yearend, the government said.

“This will help our country economically,” Morales said at a rally in the outskirts of Buenos Aires. “We are ready to increase exports to Argentina so that this resource benefits our region.”

The agreement may intensify pressure on Petroleo Brasilerio SA, the customer for 70 percent of Bolivia’s gas, and on Brazil, which counts on Bolivia for half its supply, to renegotiate a 20-year gas agreement signed in 1999. A 10 percent increase under the contract, effective July 1, will raise the price Petrobras pays to between $3.80 and $4.65 per BTU.

Argentina may increase the price of gas it exports to Chile to offset higher cost of Bolivia imports, Clarin newspaper reported without saying how it obtained the information.


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