Identifier
Created
Classification
Origin
07LAPAZ2270
2007-08-17 21:23:00
CONFIDENTIAL
Embassy La Paz
Cable title:  

PETROANDINA: A STILL BIRTH?

Tags:  ECON PGOV PREL EPET VE BL 
pdf how-to read a cable
VZCZCXYZ0000
PP RUEHWEB

DE RUEHLP #2270 2292123
ZNY CCCCC ZZH
P 172123Z AUG 07
FM AMEMBASSY LA PAZ
TO RUEHC/SECSTATE WASHDC PRIORITY 4708
INFO RUEHAC/AMEMBASSY ASUNCION 7008
RUEHBO/AMEMBASSY BOGOTA 4372
RUEHBR/AMEMBASSY BRASILIA 8260
RUEHBU/AMEMBASSY BUENOS AIRES 5496
RUEHCV/AMEMBASSY CARACAS 2720
RUEHPE/AMEMBASSY LIMA 2898
RUEHMD/AMEMBASSY MADRID 3571
RUEHMN/AMEMBASSY MONTEVIDEO 4798
RUEHQT/AMEMBASSY QUITO 5356
RUEHSG/AMEMBASSY SANTIAGO 9964
RUEHUB/USINT HAVANA 0484
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUMIAAA/USCINCSO MIAMI FL
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RHEHNSC/NSC WASHINGTON DC
C O N F I D E N T I A L LA PAZ 002270 

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/07/2017
TAGS: ECON PGOV PREL EPET VE BL
SUBJECT: PETROANDINA: A STILL BIRTH?

REF: LA PAZ 2205

Classified By: DCM Kris Urs for reasons 1.4 (b) and (d).

---------------
Long On Promises
----------------

C O N F I D E N T I A L LA PAZ 002270

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/07/2017
TAGS: ECON PGOV PREL EPET VE BL
SUBJECT: PETROANDINA: A STILL BIRTH?

REF: LA PAZ 2205

Classified By: DCM Kris Urs for reasons 1.4 (b) and (d).

--------------
Long On Promises
--------------


1. (C) The birth of Petroandina took place with great
fanfare during the August 9-10 visit of President Chavez to
Bolivia. Petroandina was one of a myriad of announced
projects, donations, and associations that were portrayed as
the answer to Bolivia's energy puzzle. Detailed plans,
however, were noticeably absent.

--------------
Short On Details
--------------


2. (U) As a manifest example of the Venezuelan/Bolivian
cooperation, Petroandina is to be a joint venture between the
Bolivian (YPFB) and Venezuelan (PDVSA) state oil companies.
Ownership will be divided 60% for YPFB and 40% for PDVSA.
The joint venture will be initially capitalized with $US600
million. While it was implied that PDVSA would put up all
the initial capital, a strict interpretation of the
announcements would mean that YPFB will put forward $US360
and PDVSA will invest the remaining $US240 million. The
principle mission of Petroandina will be oil exploration in
northern La Paz state, but additional exploration in the
southern states of Tarija, Chuquisaca, and Santa Cruz, where
there are large proven reserves of gas, is also anticipated.
The joint venture was made possible by a May 2007 decree that
enabled the YPFB to partner with other state or private
companies to develop 21 areas for natural gas or oil.

--------------
Comment
--------------


3. (C) The promise of oil in northern La Paz may well be
worthy of exploration, but it is a long-term project and is
certainly not a fix for a looming energy crisis in Bolivia.
Moreover, YPFB is in no condition to initiate major new
undertakings. The structure of the state company is still
undefined, its capabilities unproven, and its financial
assets cloaked behind increasingly thick government curtains.
Given that YPFB is effectively a shell company and that
PDVSA is better known for its corruption rather than sound
management practices, Petroandina's parents may have given
birth to a still born. End comment.
GOLDBERG