Petrobras has entered into an agreement with YPFB, in accordance with its negotiation agenda, aimed at resolving differences as to the performance of the Bolivian natural gas import contract (Gas Supply Agreement – GSA) to the Brazilian market.
The agreement provides clarification regarding the different interpretations of the GSA through payments and compensations from one party to the other, including the execution of a natural gas supply contract to enable the operation of thermoelectric power plant – UTE Cuiabá until December 2016.
Its impact on Petrobras’ third quarter results for 2014 is estimated to be a negative US$268 million; however, its effect on Petrobras’ 2014 full year results is expected to be a positive US$128 million.
The agreement is beneficial, because, in addition to the short term benefits for both parties, it allows for the evolution of a positive agenda that includes incentives for the exploration and production of Bolivian natural gas by guaranteeing the preferential allocation to the Brazilian market of any natural gas found by Petrobras in Bolivia through its own exploratory efforts.
Press Release, August 20, 2014; Image: Petrobras