UPDATE 2-Spain's Repsol to invest $1.6 bln in Bolivia natgas

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By Carlos Quiroga

LA PAZ, Sept 16 (Reuters) - Spain's oil major Repsol (REP.MC: Quote, Profile, Research) has pledged to invest nearly $1.6 billion to boost natural gas output in Bolivia over the next five years, the head of Bolivia's state-run energy company YPFB said on Wednesday.

"In the next five years, they (Repsol) have agreed to invest, on average, $300 million a year," YPFB President Carlos Villegas said in an audio recording released by the company.

After a meeting with Repsol officials in Madrid on Tuesday, leftist Bolivian President Evo Morales said Repsol had agreed to speed up investments in Bolivia.

"In early October, at the latest, Repsol executives will be in Bolivia to make an official announcement regarding this agreement ... which they are obliged to comply with it," said Villegas.

Bolivia's natural gas production has been stable at around 40 million cubic meters a day for at least three years, despite previous government announcements that foreign companies were planning to invest heavily to boost output.

The impoverished nation has been hard hit by falling natural gas prices and slacker demand from Brazil, which reduced its imports significantly earlier this year due to an economic slowdown.

Villegas did not specify what Repsol's production increase would be, only saying the Spanish firm has agreed to drill seven wells and increase the production capacity of a natural gas processing plant.