Political Unrest in Bolivia Cuts into Natural Gas Exports and Forces Refiners to Delay Maintenance Turnarounds

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Researched by Industrial Info Resources (Sugar Land, Texas)--A major turnaround scheduled to take place in September at the Gulliermo Elder Bell Refinery, owned by state-owned oil corporation Yacimientos Petroliferos Fiscales Bolivianos (YPFB), in Santa Cruz de la Sierra has been postponed because of growing political and social unrest in Bolivia. The turnaround could begin in April 2009, although a specific date has not yet been decided.

There have been demonstrations and riots against Bolivian President Evo Morales because the five wealthiest oil-producing departments in the country -- Santa Cruz, Beni, Pando, Tarija and Chuquisaca -- are claiming their independence from the central government. They are also demanding for the central government to give each province the money collected in taxes imposed on hydrocarbons. Attacks have been reported on Bolivia's energy infrastructure, causing fuel shortages in the internal market and forcing the Gulliermo Elder Bell Refinery to continue to operate. All of the refinery's units are online and processing without problems.

Several opposition groups have also reportedly attacked natural gas pipelines, forcing the country to cut exports to Brazil by about 10%. Demonstrators closed valves of the system operated by transporter Transierra, which supplies the Bolivia-Brazil Gas Pipeline. Petrobras (NYSE:PBR) (Rio de Janeiro, Brazil) officials have said that necessary measures were implemented to follow the contingency plan. Gas consumption will be reduced and substituted for other fuels. Bolivian authorities have said that it will take between 10 and 15 days to repair damage and that reduced exports were costing the Bolivian government about $8 million each day. The natural gas supply to Argentina was also affected after demonstrators attacked the 83 million-cubic-feet-per-day Vuelta Grande Natural Gas Plant in the Chiquisaca Department as well as the Pocitos pumping station in Yacuiba near Argentina's border.

At YPFB's Gualberto Villaroel Refinery in Cochabamba, Valle Hermoso, an 18-day turnaround scheduled to take place in October has been postponed because of a delay in the delivery of materials, including studs and gaskets. Authorities estimate that it will be carried out in March 2009. The turnaround in the crude unit that was scheduled to take place in February 2009 has also been postponed. A new date will be determined after maintenance is performed in the other units.

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