Brazil's Petrobras said it has reached a new agreement with Bolivia state oil company YPFB to govern imports between the two countries, a change that will produce a short-term hit but long-term gain to financial results.
The Rio de Janeiro-based state player said the new deal is expected to impact its third-quarter 2014 results by a $268 million but boost full-year balance sheets by a positive $128 million.
The deal "allows for the evolution of a positive agenda that includes incentives for the exploration and production of Bolivian natural gas," Petrobras said in a statement.
The agreement also guarantees "preferential allocation to the Brazilian market of any natural gas found by Petrobras, through its own exploratory efforts, in Bolivia."
Petrobras, with an eye to burgeoning natural gas demand in Brazil, has ramped up exploration efforts in Bolivia's prolific natural gas sector as it has scaled back international involvement elsewhere to give full attention to pre-salt developments at home.
Bolivian officials told Upstream earlier this year the company planned to spend an additional $2 billion more exploring and developing gas in the San Telmo, Astillero and Sunchal permits in Tarija province.
The same has not held true for downstream investments in the market: Petrobras said earlier this month it struck a deal worth $106.7 million with YPFB to sell its 44.5% stake in the Transtierra pipeline company.