Doubts grow on claims of vast Bolivian gas reserves

A new audit of the reserves that was supposed to be unveiled in August has been delayed, raising questions about just how much is really there.

The government has already said that prior claims of huge reserves were "fiction," as part of an effort to justify privatizations between 2000 and 2005.

Bolivians are awaiting the results of a report from the US-based consultancy Ryder Scott to verify and certify the country's proven oil and gas reserves.

But a former top executive of the state-owned company Yacimientos Petroliferos Fiscales, Hugo del Granado, has said the preliminary report from the firm shows proven reserves of 230 billion cubic meters -- far below the official figure since 2005 of 700 billion cubic meters.

Government officials have neither confirmed nor denied the report. Hydrocarbonds Minister Fernando Vincenti has said only that the government is doing an "exahustive" review of the data.

Bolivia hopes to avoid a repeat of the experience in 2005-2006 when another US firm, DeGolyer and MacNaughton, cut the country's estimated reserves by half, according to the minister.

Authorities suspected the figures in the earlier report may have been manipulated just ahead of the arrival in power of President Evo Morales, a socialist leader who has carried out a series of nationalizations in the sector.

The figures are critical for a country where natural gas represents 43 per cent of exports and is a major source of revenues for state coffers.

If there is another big downgrade of the reserves, "it would not create an immediate catastrophe but it would hit hard over the medium term," says Carlos Miranda, a former hydrocarbons minister.

Bolivia is the second largest gas producer in South America after Venezuela.

Miranda said the country could have trouble meeting its obligations for gas deliveries to Brazil and Argentina, which have long-term contracts.

But Vincenti said there is no reason to panic: "We have enough reserves to comfortably export over the coming 20 years" as well as for domestic consumption, he said.

"The volume of our reserves is not cause for concern whatsoever."

The official said new gas fields have been discovered since the Ryder Scott surveys were taken, meaning there could be greater availability that indicated in the report.

In recent months, Spain-based Repsol YPF announced the discovery of a gas field in southern Bolivia and French-based Total reported success in drilling in a big field in the same region.

"The reserves reflect a snapshot of a particular point in time, but the situation in the sector is dynamic," said YPFB president Carlos Villegas. "We are exploring and we expect positive results."

But business leaders fret over the drop in private investment in the sector since 2009. The sector, including foreign companies, has generated just 10,000 jobs in the past year, according to Daniel Sanchez, even as the labor market saw 40,000 new entrants.