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Petrobras fines Bolivia after it fails to deliver sufficient LNG

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According to Reuters, Petrobras – the Brazilian state-run oil company – has issued a fine to Bolivian state oil company YPFB after it failed to deliver contracted LNG volumes.

Reuters reports that the volumes were secured under a contract through the Bolivia-Brazil pipeline during 2018, adding that the value of the fine has not been disclosed.

According to Reuters, Marcelo Cruz, executive manager of gas and energy at Petroleo Brasileiro SA, said: “At the moment it does not deliver the gas, I end up having to go to the market and buy LNG. On average, LNG is more expensive than Bolivian gas.

“The spirit of the fine is this: to compensate for any losses that may occur.”

Cruz reportedly said that the failure to deliver LNG was caused by a decrease in exploratory investments in recent years, which have consequently led to a fall in production. In addition to this, Bolivia’s domestic requirements have also grown simultaneously, which has limited supply.

According to Reuters, in 2018, Petrobras requested an average of 26 million m3/d of gas, but YPFB was only able to deliver 22.6 million m3/d. As a result of the aforementioned difficulties in Bolivia, Cruz reportedly said that the companies are discussing a potential revision of the volume of contracted gas.

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