Will unstable Bolivia endure as a relevant gas player?

The attempted military coup in Bolivia on Wednesday is yet another demonstration of how difficult it will be for the country to remain an important player in the natural gas market in the future. 

With declining reserves due to a lack of investment in exploration, as well as regulatory issues, Bolivia is considering acting not only as a direct supplier but also as a midstream agent, bringing Argentine gas to Brazil. 

But even that idea is threatened by the country's instability. 

"Bolivia's situation is very difficult for the next few years. What has just happened [the attempted coup] is a sign of what could happen further down the road, towards economic 'unviability' with the end of the gas era in the next few years," a Brazilian analyst told BNamericas on condition of anonymity.  

Vinícius Romano, Rystad Energy’s vice president for gas research, said that now that Argentina is finishing the reversal of the Norte pipeline before the end of 2024 to physically supply the north of that country with domestic gas, Brazil will be the most important market for Bolivia. 

“The short-term effect is that there will be more gas available to Brazil despite the production decrease” in Bolivia, he told BNamericas.  

“If the country is successful in finding and producing more gas with a similar cost structure as in the past, they could still be an important gas exporter.”

On Wednesday, Brazil's ambassador to Bolivia, Luis Henrique Sobreira, said that Brazil guarantees the purchase of Bolivian natural gas for as long as it can supply it. 

"Naturally, as long as Bolivia has enough gas to export and not just to consume, we’d be interested in importing because this gas is very important for Brazil," said the diplomat, Bolivian media reported.

According to the latest data provided by Brazil’s mines and energy ministry (MME), Bolivian gas imports totaled 14 million cubic meters per day in January. That volume represents about 21% of Brazil’s total supply and demand in the period. 

Bolivian gas exports to Brazil peaked in 2014, reaching 9Bt and generating revenues of US$3.8 billion. In 2023, the volume was 4.4Bt, for US$1.4bn.

BNamericas based on Bolivia's government data 

Brazilian President Luiz Inácio Lula da Silva is scheduled to meet his counterpart Luís Arce in Bolivia soon. 

Bolivia wants Brazil's federal oil firm Petrobras to invest in gas exploration in the country and is interested in a lithium exploration partnership.

Romano believes Petrobras will indeed evaluate exploration opportunities in Bolivia, but he recalled that the firm has a large exploration portfolio in Brazil, including pre-salt assets, as well as the Equatorial Margin, the Sergipe Deepwater project, plus the Tayrona block offshore Colombia.   

"This basically puts the onus on Bolivia as to how the country can make its upstream sector more attractive to Petrobras and other international companies," he said.