Petrobras Seeks Fines From YPFB Over Gas Shortfall

Brazil’s state oil company Petrobras plans to fine Yacimientos Petroliferos Fiscales Bolivianos (YPFB), its Bolivian counterpart, for failing to comply with gas delivery volumes demanded during 2018, online media reported March 27.

Petrobras demanded an average of 26mn m³/day in 2018, while YPFB delivered 22.6mn m³/day, reported online media La Razon, citing Petrobras Gas and Energy executive manager Marcelo Cruz.

“During nine months in 2018, Bolivia delivered Brazil less than what Petrobras had programmed, which demonstrates a structural problem that prevents honouring the previously established commitment,” Cruz said.

Petrobras and YPFB signed agas supply contract in 1996 which gives Petrobras flexibility to demand between 19mn m³/day and 31mn m³/day, YPFB President Oscar Barriga said on March 26. Bolivia’s contract with Brazil ends in July, but can be extended another year if parties agree.

The YPFB executive argued the fines imposed against his company were not fair and said the sole responsibility for payment was that of Petrobras Bolivia.

“When Brazil fails to meet minimum nomination volumes, there is no significant penalty. Proof of that is currently being reflected as Brazil is requesting 12mn m³/day, volumes below its contractual obligation, without sanctions against them,” Barriga said.

“Eventual breaches of gas provisions generate an economic penalty. At present, the consortium led by Petrobras Bolivia is responsible for 100% of the gas supply demanded by Brazil. In that understanding, Petrobras Brasil imposes the fine and its subsidiary in Bolivia must pay the same,” Barriga emphasized. “Therefore, it will not be YPFB, nor the state, nor the governorates or mayorships that will be affected.”