Up to 15 years for new Bolivian hydrocarbons policy to bear fruit, think tank says

Any new hydrocarbons policy in Bolivia will produce results in 10-15 years' time, according to local think tank Fundación Jubileo.

“The hydrocarbon policy that Bolivia applied since the year 2005 has been characterized by being revenue-focused, statist and exclusively natural gas-oriented, neglecting the sustainability of the sector in the long term,” the group said in a research note.

Jubilee adds that, “two decades later, the crisis in the sector manifests itself in the decrease of reserves, the fall in production, the fall in income, economic and social impacts due to income dependency and loss of international markets.”

OBSOLETE POLICY

“Today there are problems in production fields that oil companies are not addressing. Why do they not do it? Because there are no conditions to invest. The big problem is that the issue was manipulated and politically distorted,” hydrocarbons and energy minister Franklin Molina said at a recent energy transition forum organized by his ministry.

Molina’s comments and those of other sector authorities, such as the head of state hydrocarbons company YPFB, have increasingly acknowledged existing framework shortfalls, with the minister even labeling the current law as obsolete.

Molina has said that a draft law to promote exploration investment will be presented.

For the think tank, the accelerated development of discovered reserves helped boost natural gas and liquids production between 2005 and 2015, but the lack of new discoveries due to little exploration led to the start of a decline in output.

Bolivian natural gas and liquids production (Source: Fundación Jubileo)

In a related development, lower house member Jerges Mercado Suárez introduced a hydrocarbons exploration and production incentives and de-bureaucratization bill, available in the Documents box in the top right corner of the page.