Bolivia presents reactivation plan to encourage natural gas exploration

RIO DE JANEIRO, BRAZIL – The presentation of the National Upstream Reactivation Plan 2021 occurred in the city of Santa Cruz, the largest in the country, with the presence of Bolivian President Luis Arce and oil company representatives.

The president of the state-owned Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) Wilson Zelaya assured that this plan has a “different approach” with exploration opportunities in “mature and closed fields” to be executed by the Bolivian state-owned company together with foreign subsidiaries and operators.

“The plan aims to achieve economic and social growth along with the country’s industrialization with the generation of surpluses,” said the Bolivian Minister of Hydrocarbons Franklin Molina.

The Minister stated that the National Upstream Reactivation Plan 2021 focuses on exploration work in 7 of the country’s 9 departments (provinces) so that “quick results” are found and the industry “is soon strengthened again.”

In turn, President Arce pointed out that YPFB’s work has focused on having “more and new partners” as he considered that “there are business opportunities” such as the one Bolivia has recently received from Peru for the purchase of natural gas and in major markets such as Brazil and Argentina.

During the event it was stated that YPFB “will assume an operative role” for the execution of projects as well as in “strategic partnership through oil service contracts (CSP) with operating companies located in the country or abroad.”

Recently, the declining output of Bolivian gas fields and the current situation of international prices in this market have led to discussions in Bolivia regarding some changes in hydrocarbon policies.

Some of these measures include adjustments to the Hydrocarbons Law in force since 2005, which establishes high tax rates for foreign companies with a greater role for the State.

Some experts have warned of the risk that in a few years the country will not have a hydrocarbon export surplus and that there will be a “pairing” between imports and exports due to declining output from the main Bolivian fields.

A certification report in 2018 determined that Bolivia had 10.7 trillion cubic feet (TCF) of proven natural gas reserves, estimated to last 14.7 years.