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  HOME | Bolivia

Bolivian President Frets About Argentina, Brazil Gas Demand

LA PAZ – President Evo Morales expressed concern Saturday over the possibility that Argentina and Brazil, the only export markets for Bolivian natural gas, will stop importing the fuel.

“I’m worried what would happen to Bolivia if it didn’t have a market for its gas ... We now depend on Argentina and Brazil because we sell our gas there,” the leftist president said in a speech in the southern Bolivian province of Chuquisaca.

“If they no longer want our gas, who do we sell our gas to?”

It was the first time Morales has publicly acknowledged his concern over the significant hydrocarbon finds made by Brazil and Argentina in recent years.

“Some will say that we’re going to industrialize. Of course, we’re already beginning with two natural gas liquid separation plants ... but even so, the Bolivian market is small. Who are we going to sell these products to?” he asked rhetorically.

Brazil has made enormous oil and gas discoveries in recent years, both onshore and in the Atlantic Ocean, while in Argentina, Spain’s Repsol-YPF said in November that a non-conventional hydrocarbon find in Neuquen province was its “largest-ever oil find.”

After the discovery in Argentina, Bolivian experts recommended that the government review its natural gas policy, promote exploration and seek out new export markets.

Bolivia currently sells 7.7 million cubic meters (270 million cubic feet) of natural gas per day to Argentina, a volume that is to increase to 27.7 million cmd by 2017.

In the case of Brazil, the contract establishes minimum shipments of 24 million cmd (845 million cfd) and a maximum of 31 million cmd.

Bolivia’s state energy firm, Yacimientos Petroliferos Fiscales Bolivianos, has said repeatedly that it is in talks on new gas-supply agreements with Paraguay and Uruguay, although thus far no deal has been struck.

Energy analyst Alvaro Rios, who was Bolivia’s hydrocarbon minister nearly a decade ago, said in November that the country’s gas output of 45 million cmd was barely enough to satisfy domestic demand and its contractual commitments with Argentina and Brazil.

Morales’ opponents say the president’s leftist rhetoric has scared away investment in the gas sector, even though his 2006 “nationalization” could better be described as a sweeping reform of taxes and royalties to capture a bigger share of gas revenues for the impoverished Andean nation.

Only one project to boost gas production, at the Margarita field in southern Bolivia, is in the advanced stages. That field, the main source of Bolivian gas supply to Argentina, is operated by Repsol in association with the BG Group and Argentina’s Pan American Energy.

Referring to the search for new export markets, Rios said in November that Uruguay and Paraguay are “very small and very far away,” unlike Chile, which “was, is and will be the best market for Bolivia,” because it has an energy deficit, is geographically close and offers the best possibilities in the region in terms of prices.

“Regrettably ... we don’t sell gas to the best market there is,” Rios said, recalling that recent Bolivian governments have rejected that option because of Santiago’s refusal to meet the landlocked nation’s demand for the return of Pacific coastline seized by the Chileans during a 19th-century war.
 

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