Russian gas giant Gazprom and French energy major Total plan to invest $130 million to explore the Azero block, a highly promising area in Bolivia's southeast.
State-owned Bolivian energy company YPFB, Gazprom and Total signed the contract Thursday in a ceremony presided over by Bolivian President Evo Morales, who expressed the country's "deep satisfaction" over the deal and said foreign companies now operate in the Andean nation as partners not "bosses."
Morales noted that the Bolivian government took in just $300 million in oil and gas revenue in 2005, a year before his government nationalized the sector, while last year those revenues climbed to more than $4 billion.
"Those are the results of the nationalization," he said.
Under the terms of the agreement signed Thursday, Gazprom and Total will assume all the investment risk during the initial hydrocarbon exploration phase.
If the exploration results are positive, a joint venture to develop the Azero block will immediately be formed in which YPFB will have a 55 percent stake and the other two companies will share the remaining 45 percent interest, Energy Minister Juan Jose Sosa said.
The deal marks Russia's first large-scale entry into Bolivia's gas sector, whose key players already include a dozen multinationals such as Spain's Repsol, Brazil's Petrobras and British Gas.
Azero covers a 785,625-hectare (3,030-sq.-mile) area that includes parts of the provinces of Santa Cruz and Chuquisaca. EFE