The Bolivian state-owned oil company is expanding its exploration projects to non-traditional areas to replenish natural gas reserves and hydrocarbon production. But despite diminishing production and alarming statements by President Arce, the company insists that Bolivia will not face a gas shortage. A battle for the political leadership ahead of the general elections in 2025 is also at play.
On April 28, the President of Bolivia, Luis Arce, made controversial statements about the natural gas reserves in the country, claiming that they “have been exhausted.” The comments have drawn criticism from the opposition, particularly ex-President and leader of the Socialist Movement (MAS), Evo Morales.
Natural gas has been the primary export product for Bolivia, driving its economic growth. Consequently, the recent decline in production has caused a politically tense environment, especially as Bolivia continues to export over 20.0 million cubic meters per day of gas to Brazil and 13.1 million cubic meters per day to Argentina.
But the president of the Bolivian State Petroleum Corporation (YPFB), the state-owned oil company, Armin Dorgathen Tapia, insisted on Wednesday that there will not be a gas shortage, even if production is diminishing. Production remains three times greater than internal demand, enough to cover its export commitments.
Domestic demand remains at a steady 12–13 million cubic meters per day, and with a total production of 40 million cubic meters per day, the surpluses meet the demands of both Brazil and Argentina, Bolivia’s primary importers.
The Upstream Reactivation Plan
The company has also been carrying out inspections of formal testing operations as well as its Upstream Reactivation Plan since 2021 which aims to develop 36 exploratory projects in the departments of Santa Cruz, Tarija, Chuquisaca, Cochabamba, La Paz, and Pando.
The plan seeks to increase the production of hydrocarbons and reestablish gas reserves, with some areas already yielding positive results. “In 2022, we strengthened, we started drilling and conducting studies. Our PRU also contemplates the reactivation of mature fields, which are already producing,” explained Dorgathen. Eight of the fields have successfully entered production.
But the plan goes beyond exploiting known basins; to ensure long-term supply, non-traditional areas are being explored as well, such as two possible basins in Subandino Norte and Madre de Dios in the north of the country. “We are looking for a new hydrocarbon basin,” Mr. Dorgathen confirmed in a press conference. Although it will take several years before these new basins’ effect on production is confirmed, he indicated that an important discovery in hydrocarbon matters will be made known to the public in 45 days.
The government is also undertaking other projects to tap into its natural resources, such as lithium carbonate and potassium chloride, to generate income from exports. Production in these fields reached record figures in 2023.
Pointing fingers
Ex-President Evo Morales criticized Arce’s government for “lacking seriousness” regarding the situation after the President made public statements seemingly exaggerating the difficulties brought about by a lowered production of natural gas.
But Mr. Dorgathen defended Arce’s position as part of the government’s transparency policy, saying that it was “totally true” that production is diminishing, but that gas reserves are nevertheless sufficient to cover both internal and external demands.
In 2016, Bolivia produced 56.6 million cubic meters per day and earned 1.8 billion dollars a year. However, by 2023, production had dropped to 31.9 million cubic meters per day with an income of 2 billion dollars.
YPFB indicated that, although a shortage is not expected, exploratory projects should have begun back in 2015, under the government of Morales, as this would have placed Bolivia in a significantly more advantageous position.
The president has insisted that government loans are needed while the country undertakes exploration to ensure that the country will continue to be able to export gas. But President Arce blamed supporters of Mr. Morales among the legislators for refusing to approve loans to the government to raise resources.
The Minister of the Economy also pointed the finger at Morales for acting irresponsibly when, at the time of his presidency, he claimed that Bolivia had a “sea of gas” that was enough to provide for the entire region, thus creating unrealistic expectations.
Political infighting ahead of the 2025 general election
But former president Morales’ criticisms of Mr. Arce are not exclusive to the energy industry; these jabs at the president are reflective of the wider political infighting within the Socialist Movement which threatens the stability of the party ahead of the 2025 election, for which both are seeking reelection.
As president, Morales shaped the Bolivian political stage. He founded MAS and is responsible for the adoption of a new constitution in 2009, as well as expanding state control over the energy industry. But his attempt to lead for a fourth term in 2019 led to controversy, and he was forced to leave the country in what he described as a coup d’état.
The former president returned from temporary exile when Luis Arce came to power and has been barred from running for office, sparking protests across the country. Ignoring the decision, Mr. Morales still announced running for reelection on his X account in September 2023.
His comeback to Bolivia poses a significant challenge to the stability of the Bolivian left, opening avenues for the right to gain ground in the elections. Nevertheless, bolstered by the advantages of incumbency and the lingering controversies of 2019, Arce’s hold on power remains likely.
