The Decline and Crisis of Hydrocarbons: Bolivia's Government Headache

Bolivia is grappling with a stark reversal in its hydrocarbon sector, transforming from a record producer and exporter of natural gas to a nation increasingly dependent on imported liquid fuels. This shift has led to persistent supply problems and long queues at gas stations, issues the government has struggled to resolve.

Natural gas was once the backbone of Bolivia's economy, with production peaking at 61 million cubic meters per day in 2014 and export revenues reaching over $6 billion in 2013. Certified reserves stood at 10.7 trillion cubic feet (TCF) in 2017. However, production began declining in 2016 and now hovers around 27 million cubic meters per day. Export values have plummeted, and current reserves are estimated at only 3.7 TCF.

The situation is exacerbated by the cessation of gas sales to Argentina in September 2024. Simultaneously, the supply of liquid fuels has become erratic since 2024. Bolivia now imports 60% of its gasoline and 95% of its diesel, costing approximately $90 million weekly. The government has attributed past supply issues to legislative blockages on external credit approvals amidst a dollar shortage that began in 2023.

Past policies, including the 2006 nationalization of hydrocarbons, are now being questioned for not delivering promised results and potentially deterring exploration investment. The Bolivian Chamber of Hydrocarbons and Energy warns that Bolivia could become a net gas importer between 2028 and 2030 without a production revival. The government has proposed new regulations and an investment bill requiring legislative approval for any nationalization measures.

“

Bolivia passed in recent years from boasting records in its production and export of natural gas to a progressive decline of that activity and a dependence on the import of liquid fuels, with supply problems that have become recurrent and that the Government has not managed to solve.