June 26, 2024, 4:00 AM
June 26, 2024, 4:00 AM
Oil companies, affiliated with the Chamber of Hydrocarbons and Energy of Bolivia (CBHE), say they face a critical situation and that they are concerned the progressive decline in natural gas production. In the last nine years, gas production fell from 60 million cubic meters per day (MMm3/d) to 31 MMm3/d.
“Today the sector faces a critical situation. However, companies are fulfilling their contracts and are developing different projects and improvements with the aim of mitigate natural decline of fields and add new volumes to production. There are also important efforts by YPFB,” they indicated in a statement.
However, they warn that even if the results are positive, they are not enough to substantially increase the supply of natural gas, which is below 40 MMm3/d.
The oil companies remember that since 2006, Bolivia has generated an oil income of approximately $us 48,000 million. However, this has been reducing in recent years due to the drop in production and the increasing proportional share of volumes destined for the domestic market, whose price is well below export prices.
Furthermore, unlike the announcements of the state-owned Yacimientos Petrolófilos Fiscales Bolivianos (YPFB), the CBHE points out that the absence of new projects do not allow us to glimpse discoveries and developments in the medium term. For this reason, he believes that the country must provide conditions for investment, through regulatory changes, that enable a balance.
“It is difficult to regain the trust of investors”
In the opinion of the former vice president of YPFB, Hugo del Granado, as a result of the mistaken oil policy of the MAS governments, the country has lost the trust of the oil companies in whom lies the hope of new and greater investments.
Regaining the trust of investors – says Del Granado – demands time, security and clear and lasting rules. “The Government does not have any of the three factors, therefore the oil companies will hardly invest what is essential to increase reserves and production. That is why the oil panorama in Bolivia is critical,” he said.
Regarding the regulatory changes proposed by the oil companies, the former Minister of Hydrocarbons, Mauricio Medinaceli, said that any change or modification that is made nowwill bear fruit in the next five to ten years. “The only thing we can do in the short term is minimize damage,” says the expert.
In turn, Hugo de la Fuente, former Superintendent of Hydrocarbons, affirms that oil activity is always extremely high risk, but generates important returns precisely because of that quality.
“Our neighbors in the Southern Cone charge the oil companies more or less 16, 17, 18% but we are at more than 80%scaring away capital and without approving a new law,” he added.
In April, the head of YPFB, Armin Dorgathen, confirmed the drop in gas production and regretted that exploration in new regions of Bolivia has not been done for several years, which could have prevented the decline in energy supply.
