Bolivia’s hydrocarbons sector requires ‘complete reengineering’

A complete reengineering of Bolivia’s hydrocarbons institutional framework is required with clearly defined roles for all related public entities, according to local think tank Fundación Jubileo.

The call is part of foundation’s roadmap to draft a new hydrocarbons policy amid falling oil and natural gas production and replace the law published in 2005.

“The hydrocarbon policy in Bolivia, although it has been useful to capture income in favor of the different levels of the State, has not promoted investment in exploration that requires risk capital,” the research institute argues.

The new law should separate operational and supervisory duties, such as transferring the vice presidency of contract administration and supervision to hydrocarbons regulator ANH from state hydrocarbons company YPFB.

Another aspect is legal security, specifically the need for the new law to consolidate dispersed norms and regulations.

The think tank contends that these second-tier norms – supreme decrees or resolutions – are easily changed by authorities and respond to short term, cyclical events, potentially impacting medium and long-term decision making.

The foundation also proposes that there must be an obligation to replace reserves.

In addition, exploration and production contracts must include local content requirements and stepped-up community engagement and development.

The roadmap, available in the Documents box in the top right of the screen, also emphasizes the need for greater transparency and access to public information.