Natural gas in Bolivia

"Bolivia's economic history reveals a pattern of a single-commodity focus", diversification has only occasionally being the case, due to political and geographical problems. Currently, the situation is no different, and the commodity of the day is natural gas. Natural gas first became significant in Bolivia only relatively recently, after vast discoveries of fields in the late 1980s and early 1990s. At the time these new discoveries aided the country on a modest economic recovery after previous years of serious economic problems (with hyperinflation, recession, and austere stabilization), their most severe since the 1950s, later aggravated by a collapse on the world's tin market in 1985 – tin being Bolivia's most valuable natural commodity at the time. So currently it is natural gas that has become the country's most valuable natural commodity, substituting what was previously tin and silver. The complication though is that "finding markets to utilize this resource, both domestically and internationally, has been slowed by a lack of infrastructure and conflicts over the state’s role in controlling natural resources." ==Political context==

The rise of natural gas as Bolivia's most important export occurred at the same time another important moment of the country's history was happening – it was also during the 1980s that civilian rule and democratic government were restored. This was a moment where many privatizations occurred, and private investment was a big part of the blossoming of the Bolivia natural gas industry. These events help us understand the current situation of natural gas in Bolivia. Background What preceded the return to democratic government in the 1980s was a long period of instability. After the Chaco War (1932–1935), during the period of 1936 until 1952, Bolivia had ten presidents (six military). This was a period in which the power was divided between the National Revolutionary Movement (MNR) and military rule. The most significant changes came with the elections of 1985, which brought to power president Paz Estenssoro (MNR founder), his fourth time as president since 1952. Estenssoro abandoned his left-wing allies and his own populist past and "decreed one of the most austere economic stabilization packages ever implemented in Latin America" But the referendum had no direct impact on the future of the energy sector. In light of these events, new presidential elections were held in 2005. Discontent with the result of the implementation of these reforms throughout the past decades (that ultimately led to the “Bolivian gas war”) definitely contributed to the election of Evo Morales in 2005, since he defended a return to the model of strong state intervention in the economy Morales kept his campaign promises and nationalized the gas industry soon after elected, in May 2006. After signing a decree to nationalize the natural gas industry, President Evo Morales dramatically took over and occupied installations by using military force on May 1, 2005. Even though he stated that expropriations would not occur, the short period of six months given to renegotiate contracts put great pressure on the main foreign companies exploring for natural gas in Bolivia. The state-owned Brazilian company Petrobrás, was among the most affected, since it was one of Bolivia's largest foreign investors and controlled 14% of the country's natural gas reserves, which in consequence created large concerns in the Brazilian government. Ultimately, negotiations took place and no further hostilities happened, resulting in agreements with all the companies involved. With the agreements "(…) the state raised its share of the revenues from the two giant fields from 50 percent to 82 percent, while taking only a 60 percent share at Bolivia's minor deposits." In December 2009, Evo Morales was re-elected for another 5 year-term, winning with 63 percent of the ballots according to unofficial counts by two polling firms. Much of his re-election had to do with his natural gas policy. Higher prices for the natural gas and also minerals, which account for the bulk of Bolivia's exports, have helped sustain economic growth and also President Morales' approval. Enjoying popularity, Morales has also tightened state control not only over the hydrocarbons sector, but also over the mining sector. He has nationalized the main phone company in Bolivia and showed intentions to also control the electrical power industry. "But many analysts believe Morales will be careful not to alienate the foreign investors he needs to increase raw materials output. [In November 2009], Bolivia received a pledge of a $1.5 billion investment from the Spanish-Argentine company Repsol for natural gas development." ==Exploration, development, and production==

Bolivia's numbers on natural gas Production: 14.2 billion cu m (2008 est.) country comparison to the world: 35 Consumption: 2.41 billion cu m (2008 est.) country comparison to the world: 78 Exports: 11.79 billion cu m (2008 est.) country comparison to the world: 17 Imports: 0 cu m (2008 est.) country comparison to the world: 78 Companies involved in exploration The state-owned petrol company of Bolivia is YPFB Yacimientos Petrolíferos Fiscales Bolivianos. There are many foreign companies involved with the exploration of natural gas in Bolivia, but the two most significant ones are Petrobrás from Brazil and the Spanish-Argentine company Repsol YPF. Others also involved are Total from France, British Gas and British Petroleum as well as the US Exxon Mobil Corporation. 281 billion cubic meters, or 9.91 trillion cubic feet (US Energy Information Administration), and 300.5 billion cubic meters, or 10.6 trillion cubic feet (OPEC, as of 31 December 2015). BP, US EIA, and OPEC all place Bolivia's proven gas reserves as the sixth-largest in South America, behind those of Venezuela, Brazil, Peru, Argentina, and Trinidad and Tobago. Due to its geographic location, in the most prosperous southern part of the continent, Bolivia holds an advantage compared to Venezuela, and holds itself as the more attractive option for shipment by pipeline of its natural gas, mostly to Argentina and Brazil. Most of these reserves are located in the eastern region of the country. More specifically, they are mostly located in four out of the nine States that form Bolivia, these four States being Tarija (which has 80% of the reserves), Santa Cruz (which has 15% of the reserves) and Cochabamba and Chuquisaca (which share the other 5% of the reserves). Pipelines Pipelines are a key feature of the natural gas business. Without them it is possible to sell gas by liquefying it and shipping it by using tankers, but that presents itself as a more expensive alternative. Exporting natural gas through pipelines is also the reason why relations with neighboring countries is an important feature of the business. It is through pipelines that Bolivia domestically uses and exports its natural gas. The major export pipelines in Bolivia are: • Gasoducto Argentina (Yabog pipeline) which began operating in 1972 and • Gasoducto Bolivia-Brazil (GASBOL pipeline) which began operations much later in 1999 The development of other pipelines to export Bolivian gas to other countries in South America, such as Uruguay, have been topic of conversations, but as of today nothing significant has followed through. ==References==