Brazil - Brazzil Mag - Brazil Asked to Pay More than Double (US$ 8) for Bolivian Gas

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Bolivia is asking Brazil to pay US$ 8 for the natural gas it pumps at a rate of 27 million cubic meters per day, according to a report from the Bolivian Information Agency.

President Evo Morales was scheduled to meet his Brazilian counterpart Lula da Silva during the Mercosur gathering in Caracas when Venezuela officially began the process of full membership of the South American customs union. Mercosur full members are Argentina, Brazil, Paraguay and Uruguay.

Brazil currently pays US$ 3.40 for every thousand BTU (British Thermal Units), and this is the first time that Bolivia officially floats the new price it will be demanding since the country took over all hydrocarbons resources and industry assets last May 1st.

Bolivia's Energy Minister Solíz said that the US$ 8 price includes a 50 US cents "environmental fee".

"We're asking from Brazil US$ 7.50 as the basis for negotiation because the prices basket in Sao Paulo indicates that's the value of Bolivian natural gas, so we're asking from Brazil market price," said Solíz.

However this is higher than the price agreed last week with Argentina, five US dollars for every 1.000 BTUs, and which was stamped by presidents Morales and Nestor Kirchner in a meeting in Buenos Aires.

Actually Bolivian natural gas price negotiations began three months ago but were frozen following the nationalization of hydrocarbons resources and a pending Brazilian debt from an export contract dating back to 1999.

Under the "take or pay" clause, between 2000 and 2005, Brazil did not consume the energy volume agreed and therefore according to Bolivia has an accumulated debt of US$ 450 million.

Bolivia has been insisting on an update for natural gas prices since Morales became president last January. Morales has a backlog of social advancement programs to deliver, which he expects to finance with the additional income from the country's sale of natural gas to Argentina and Brazil.

Bolivia sells Argentina 7.7 million cubic meters per day and of next July 15 will be paying US$ 5 per thousand BTU. However at the end of the year a new contract and conditions has to be agreed.

Shouldn\'t Release Gas In Public
written by Guest, July 05, 2006

Some on needs to coach Evo Morales(Bolivian President). Joking they're passing gas in public. The negotiations with Argentina and Brazil should be handled in private. Also, though I could understand Pres. Morales desire to secure additional revenue for the natural gas, allowing there to be a +30% gap in the price between Brazil and Argentina is only going to stir up future envy and problems. Plus, Bolivian government should have considered having a similar BTU purchase expectation between Argentina and Brazil. Hopefully, the damage can be patched up. I still have hopes for Pres. Morales but he and his leadership Team require some stern coaching.

Bobby (Chicago/USA)
acommonthought@aol.com

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You are dead right !
written by Guest, July 05, 2006

But private negatiations have been made and this explain the price between 2 negotiations !

In my view, prices should be announced as per the free market prices, wether it be 2, 3, 5 or 8 $ per MCF.

It remains that although Morales is right, he is not very clever by changing his mind sometimes several times a day !

Simply stated he has no consistency and is full of contradictions , just like Lula !
These guys can make 3 speeches with 3 differents conclusions, depending of where or with whom they made their speeches.
Then they say there was a misunderstandingwhen there was none !

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