Gazprom’s Exit Tests Bolivia’s Oil Sector Stability
Bolivia’s state oil company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), faces a new test after Russian giant Gazprom officially withdrew from the Azero gas block.
The announcement, confirmed by YPFB executives and government sources, follows more than a decade of joint exploration that failed to deliver commercially viable reserves.
The Azero project began in 2008 as a flagship partnership between Bolivia and Russia. Gazprom and France’s Total pledged $130 million for exploration, targeting a vast 785,625-hectare area.
By 2020, the main well reached 5,830 meters deep, but the companies found no marketable gas. Gazprom’s gradual retreat ended with its formal exit in April 2025.
YPFB insists it remains financially stable and continues to fund exploration and production with its own resources. The company is drilling six new exploratory wells and preparing five more.
YPFB’s Efforts Amid Declining Production
YPFB Chaco S.A., a subsidiary, produced 28,600 barrels of oil equivalent per day in the last fiscal year. The company contributed Bs 1,227 million (about $176 million) in royalties and taxes to the state.
Despite these efforts, Bolivia’s hydrocarbons sector faces declining production and a tough investment climate. Legal uncertainty, high taxes, and limited incentives have discouraged foreign capital, even from politically friendly countries.
Former Hydrocarbons Minister Álvaro Ríos noted that Gazprom had already scaled back activities years before the official exit. YPFB says it can guarantee domestic gas supply until at least 2029.
The company aims to reverse falling production and restore export revenues. It focuses on maximizing output from existing fields and intensifying exploration to replenish reserves.
The loss of Gazprom, a state-owned partner, highlights the sector’s challenges. Bolivia’s government and YPFB must now rely more on internal resources and operational efficiency.
The hydrocarbons sector remains vital for state revenue, but the lack of new discoveries and foreign investment raises questions about long-term sustainability.
YPFB’s response shows resilience, but the company faces a complex environment. The real story is a sector at a crossroads, balancing self-reliance with the need for new investment and discoveries.
More: Bolivia news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief