Led by Stanislav Tsygankov, Head of the International Business Department, a Gazprom delegation paid a working visit to the Republic of Bolivia.

Within the visit a meeting with Carlos Villegas, President of the state-owned petroleum company YPFB took place. The parties discussed the progress with the Memorandum of Understanding signed in February 2007, the current status of a joint venture creation to deal with hydrocarbon production at the Acero Block and the possibility of Gazprom’s entry into the Bolivian-Venezuelan company Petroandina.

The meeting participants also discussed possible directions of sci-tech cooperation and the issues of experts training for the oil and gas industry.

Based on the meeting results the YPFB President and representatives of Gazprom and VNIIGAZ signed in the presence of Saul Avalos, the Bolivian Energy and Hydrocarbon Minister, a Memorandum to elaborate the General Scheme for the Bolivian gas industry development until 2030, as well as agreed on the working schedule.

Background:

Bolivia’s proven natural gas reserves average 0.77 trillion cubic meters, oil – 60 mln tons. The total natural gas reserves, both proven and probable are estimated at 1.5 trillion cubic meters. The major hydrocarbon reserves are located in the Tarija area, namely, the four largest fields – Margarita, San-Alberto, Itau and Sabalo (over 80 per cent of the whole total). Among other promising gas-bearing provinces are Santa-Cruz (10.6 per cent) and Cochabamba (2.5 per cent).

The interests of the state in the oil and gas sector are represented by YPFB that discharges the fiscal functions and has by law the exclusive right to participate on behalf of the state in oil and gas projects and sell hydrocarbons. Bolivia is the major natural gas exporter to Brazil and Argentina.

On September 18, 2008 Gazprom, YPFB and Total E&P Bolivia signed the tripartite Memorandum stipulating the conduct of joint evaluation of the Acero Block and representing another step towards the joint venture shaping to deal with hydrocarbon production in Bolivia.

On September 18, 2008 Gazprom, Petroleos de Venezuela S.A. and YPFB signed the Memorandum of Understanding to explore the possibility of the Company’s entry in the shareholding structure of Petroandina.