Campo Margarita royalties’ issue between Chuquisaca and Tarija

The natural gas in Campo Margarita is one of the most important fields in our decreasing hydrocarbon industry; nevertheless its royalties are an extremely important source for the departments where it is located. The map below shows how that reservoir is between three departments. On the left, the map with the red remarks where the current issue is in dispute; the blue portion are exploration works that cross borders of Santa Cruz and Tarija, a potential conflict. On the right side, note that the yellowish and orangish portions of the columns are the revenues that departments get from hydrocarbons.

Actually the issue is between Tarija and Chuquisaca, Carlos Valverde today in his radio program accused of neglect the Santa Cruz authorities for doing noting regarding this problem, the blue portion of the map above.

So far, Tarija has embarked in a strike, rejecting or rather refusing to share those revenues with Chuquisaca. Portions of today’s La Razon’s article follow:

On October 24th, Bolivian Fiscal Oilfields (YPFB) launched the bid for the technical study that would define the relationship and extent of Margarita and Huacaya fields (both are part of the Contract Area Caipipendi). Two companies responded the call: the American Gaffney Cline & Associates and the Spanish Tecnourban. On Tuesday, November 15 “the bidding process to hire a company that defines the relationship and extent of the two fields (Margarita and Huacaya), was not completed, because none of the two companies that were presented (to bid) meet the technical, economic legal and demanded,” as reported by the state oil company CEO, Carlos Villegas Quiroga.

For this reason, he said, the President called the governors of Tarija (Lino Condori) and Chuquisaca (Esteban Urquizu); the chairman of the Multisectoral Commission of Tarija; as well as the presidents of both departmental assemblies, to attend today, in La Paz, a meeting to define a work plan to identify possible solutions to the problem.

“The possibilities are open and a decision will be made, starting tomorrow (today),” said Villegas. However, on November 4th, the Hydrocarbons and Energy Minister, Jose Luis Gutierrez, remarked that the solution for the distribution of royalties from Margarita is inserted in Article 45 of the Hydrocarbons Law.

PRESSURE. According to the rule, “where there are fields located in two or more departments with shared pools, the owners should conduct detailed studies made by internationally recognized companies to establish the proportion of reserves in each department.”

“If the bid is declared void, then it corresponds direct contracting. Otherwise, Chuquisaca will also take the path of the pressure. We will not give up our rights,” said the president of the Civic Committee, Milton Baron. According to official information, this position is supported by Governor Steve Urquizu.

Margarita natural gas field product is exported. Margarita and Huacaya are located between the departments of Tarija and Chuquisaca, respectively, over an area of ​​123,000 hectares. The block has five wells drilled, starting April 1, 2012 it will increase its current production to 2.8 million to nine million cubic meters per day (MCM), until it reaches 14 MCM in 2014. The field operator (Repsol) will invest $ U.S. 1,400 million in the two phases of development of the block to ensure compliance with the export gas contract to Argentina, with over 50% of the gas flow that comes from Margarita to that market country.

http://www.la-razon.com/version.php?ArticleId=141293&EditionId=2718

Good decision from current government, to ease and facilitate in problems like this one. I hope this negotiation (jurisprudence) benefits the other pending issue between Santa Cruz and Chuquisaca.

We should also keep in mind that the intent of the Chaco region to become an independent department does not happen. Bolivia does not need to fragment no more, we must live with what we have, with what we are, as we came to existence as ten departments (Bolivia lost the Litoral department by the war Chile impossed onto us).

One response to “Campo Margarita royalties’ issue between Chuquisaca and Tarija

  1. Pingback: Briefs: Margarita gas field; crafts; electricity prices | Bolivian Thoughts in an Emerging World

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