Overview

According to the latest international evaluation of potential gas reserves in 2017, Bolivia possesses approximately 12.5 trillion cubic feet (TCF) of natural gas reserves (both proven and probable). Of this amount, 10.7 TCF are proven reserves.  In February 2022, the government announced exploitation from the new Margarita 10 well, located on previously discovered gas fields and is expecting to begin production in 2022 with potential reserves between 300-350 billion cubic feet.  Bolivia has more than 240.95 million barrels of proven crude oil reserves.  The government estimates another 47.8 million barrels of probable reserves and another 78.4 million barrels of possible reserves.

In the hydrocarbons sector, Bolivia currently produces an average of 41.3 million cubic meters of gas per day (mm3/d), using 8.2 mm3/d for domestic consumption, while exporting 20.0 mm3/d to Brazil and 13.1 mm3/d to Argentina.  Hydrocarbons accounted for approximately 20 percent of Bolivia’s exports, or $2.2 billion, in 2021.  The state-owned hydrocarbons company, Yacimientos Petroliferos Fiscales Bolivianos (YPFB), generally forms joint ventures (55-45 percent sharing, with the state owning the majority share) for a limited period of 40 years with private companies for extraction services. YPFB administers a gas sales agreement with Brazil’s state-owned oil company Petrobras and another agreement with Argentina. Current hydrocarbons laws require that companies sell all production to YPFB, and that domestic market demand be met before exporting hydrocarbons.  Furthermore, these laws transfer the entire transport and sales chain over to state control.  Although the state holds a majority share in the hydrocarbons sector, the government has issued incentives and exemptions to encourage investment due to the lack of investment (especially in exploration) and a reduction in the levels of proven reserves.  State and local governments depend on the hydrocarbon sector for revenue and the public taking for gas companies average at 80 percent. This structure is a key contributor to the years of dwindling natural gas investment and exploration. Nationalized electric companies represent about 80 percent of total generation capacity.

*The Bolivian government does not provide estimates.

(Total market size = (total local production + imports) - exports).

Units: $ millions
Source: INE

The nationalized electricity distribution companies account for 51% of the distribution market.  These companies fall under ENDE (the National Electricity Company). Bolivia’s electricity production is based on thermoelectricity (71%), hydroelectricity (20%), and solar and wind (9%).

Leading Sub-Sectors

The best sales prospects are with hydrocarbons: natural gas-related machinery, equipment, and production.  Several U.S. companies have been successful selling supporting machinery and equipment to Bolivia.  The best sales prospects in the electricity subsector include machinery (mainly thermo and hydro turbines), equipment, and other technology for thermoelectric and hydroelectric projects.  Products related to renewables, including solar and wind, may also find a market in Bolivia.

Opportunities

The decline of Bolivia’s proven natural gas reserves may present several investment opportunities for foreign firms since the government needs to demonstrate that it can fulfill current export contracts and meet increasing domestic demand.  After 30 years of being a hydrocarbon exporting country, Bolivia became a net importer of fuel as of April 2022. Higher fuel prices and a decade of reduced exploration and production of natural gas are factors to this deficit. Among the opportunities are the areas of exploration, drilling, and natural gas production. Exploration and drilling for natural gas has been a stated government priority since 2011. Exploration is especially important for the government.  Bolivia seeks to take advantage of surging international natural gas prices but has struggled to meet its commitments for natural gas exports. Bolivia renegotiated with Argentina on April 7 to capture a higher price (still below the market price) and doubled its export commitment during winter months, agreeing to export 14 million cubic meters per day.  However, to meet this commitment Bolivia will need to renegotiate its current supply contract with Petrobras to decrease exports to Brazil, contracted currently at 20 million cubic meters per day.

Bolivia currently has over a dozen electricity generation projects (hydroelectric, solar, combined cycle, and geothermic) and transmission line projects underway and over 30 projects under study, including the construction of two biomass power plants.  Bolivia plans to invest billions towards expanding its electric grid through 2025. The energy plan would bring electricity to more rural areas and generate more electricity to meet domestic demand and increase export capacity. Tenders for the provision of machines and supplies for current and future government energy projects are opportunities on which to capitalize.

Resources

Hydrocarbons Regulator (NH) https://www.anh.gob.bo

Ministry of Hydrocarbons and Energy https://www.mhe.gob.bo

Private Chamber of Hydrocarbons www.cbhe.org.bo

National Electric Company (ENDE) https://www.ende.bo/index.php

Electricity and Nuclear Energy Regulator (AETN) https://www.aetn.gob.bo/web/

National Committee for the Dispatch of Cargo (CNDC) https://www.cndc.bo/home/index.php

National Statistics Bureau (INE) https://www.ine.gob.bo/