Dec. 19 (Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, agreed to invest between $750 million and $1 billion in Bolivian natural-gas projects, months after the Andean state took control over its energy resources.

Petrobras and Bolivia's state-run YPF Bolivianos will work together to increase production in the country, the Brazilian company said in an e-mailed statement yesterday. The two partners also agreed on a payment formula for natural-gas liquids, which Petrobras purchases under a May 2 agreement.

The company is ``willing to invest in Bolivia especially because of demand for natural gas in Brazil,'' which imports supplies, Felipe Cunha, head of oil and energy research at Brascan Corretora in Rio de Janeiro, said by phone today. Petrobras accepts ``a risk for investment in the countries like Bolivia.''

YPF Bolivianos took control over the nation's oil and gas fields after a dozen oil companies, including Petrobras and Spain's Repsol YPF SA, signed new contracts on May 2. YPFB was put in charge of running Bolivia's oil and gas pipelines, domestic sales and exports. Bolivia has South America's second- largest natural-gas reserves, after Venezuela.

Petrobras shares rose as much as 0.9 reais, or 1.1 percent, to 80.5 reais in Sao Paulo trading and were at 79.25 reais as of 1:17 p.m. local time.

The investment will depend ``on the results achieved in new areas of exploration, as per the normative and economic conditions that are currently in effect,'' Petrobras said.

In a separate agreement, YPFB and Petrobras also agreed on ``a 50 percent price guarantee relative to the exports price'' for gas supplies to Bolivia's domestic market, when volumes exceed 18 percent of production from new projects, the Brazilian company said.

Petrobras will buy between $100 million and $180 million a year of natural-gas liquids ``pursuant to the Brasilia Minutes'' of Feb. 14 and the May 2 agreements.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

Last Updated: December 19, 2007 10:18 EST