Brazilian state-run oil and gas company, Petrobras, has declared force majeure on its Bolivian gas imports contract, as gas sales were down roughly 20%, Kallanish Energy reports.

As the Covid-19 pandemic hit demand for its natural gas sales in the second-quarter, the company reduced its imports of Bolivian gas. It executed a force majeure on its contract with YPFB, reducing withdrawal volume to 12 million cubic meters per day (Mmcm/d) in 2Q20.

The minimum take-or-pay commitment was of 14 Mmcm/d.

Total natural gas sales reached 56 Mmcm/d in Q2, which represents a drop of 22% over the 72 Mmcm/d sold in 1Q20 and a decline of 18.8% year-on-year.

“These reductions are explained by the lower demands of the thermoelectric and non-thermoelectric segments,” Petrobras said Tuesday in its Q2 operational results.

The drop in natural gas thermoelectric dispatch was 36.3% q-o-q to 14.4 Mmcm/d. Volumes supplied to the non-thermoelectric segment was 20.9% lower at 28.4 Mmcm/d, from 35.9 Mmcm/d in 1Q20.

“The effects of the Covid-19 pandemic were felt in March, with a more marked reduction in the volumes of natural gas traded in April and May and signs of recovery in June,” Petrobras said.

As a result, the company reduced its natural gas production in some upstream units and there was virtually no import of liquefied natural gas in the quarter.

In terms of production, the Brazilian giant reported an average 512,000 barrels of oil equivalent per day (Boe/d) in Q2. This is 2.4% higher than the same period last year, but 4.5% lower than the previous quarter.

Despite operating at 50% of its workforce due to the pandemic and mothballing 62 platforms in shallow waters, Petrobras has maintained its total production guidance for 2020. It aims to produce 2.7 Mmboe/d this year.

This post appeared first on Kallanish Energy News.