Hosting his second Latin American colleague in less than a week, President Alberto Fernández on Thursday received his Bolivian counterpart Luis Arce with gas supply his main concern.
After several meetings lasting for three hours, both presidents eventually announced an agreement to “guarantee” the supply of gas to Argentina throughout the rest of the year.
“When there are needs, we all have to help each other as the brothers we are. Argentina has its gas supply guaranteed like last year and we are also signing a lithium agreement," Arce told a joint press conference after their meeting.
"We had to resolve some issues with Bolivia and I want to thank the effort so that Argentina can continue along the road to development because energy is very important," responded President Fernández during the joint press conference in Government House.
The Peronist leader then thanked the “solidarity” of the neighbouring country, explaining: “The ongoing contract will be carried out and Argentina will take priority if there is an increase in production.”
Local reports said the government would pay “emergency prices” for Bolivia’s natural gas.
The government later confirmed that it had signed an agreement with Bolivia for the supply of gas throughout 2022 in the framework of a joint energy statement covering 14 million cubic metres of gas and leaving open the possibility of extra volumes during the winter months.
Arce ratified that any additional production of Bolivian gas "will be sent to Argentina," while assuring that his government would embark on negotiations with Brazil to reach a new agreement since the previous understanding was signed by a de facto government.
"Bolivia assumes an additional commitment that Argentina will have priority access to any increased production of gas," Fernández clarified.
An agreement was also reportedly signed "to advance in the consolidation of a bilateral energy agenda, which leads, among other points, to guaranteeing the supply of gas in significant volumes during the present administration."
Furthermore, specific mechanisms between state firms YPFB (Yacimientos Petrolíferos Fiscales Bolivianos) and IEASA (Integración Energética Sociedad Anónima) were developed to the benefit of both countries.
The Argentine and Bolivian presidents agreed on the importance of "realising concurrent actions so that the Contract of Purchase and Sale of Natural Gas between YPFB and IEASA, reflects a new régime of the guaranteed supply of 14 million cubic metres, giving priority to making available additional volumes in the winter period as well as waiving the rights and obligations through to 2025, whose effect will be entrusted to the responsible Ministries and departments in order to draft the corresponding documents."
The presidents further agreed "to advance in the analysis of the investment opportunities for YPFB in Vaca Muerta (shale), working jointly to identify the alternatives for supplying liquid fuels in order to secure the energy security of both states."
Last year Argentina ran a trade deficit of US$490 million with Bolivia with imports of around US$1.054 billion, of which 91 percent corresponded to gas, while exports reached US$564 million, according to a report by ABECEB consultants.