Bolivian government intensifies gas exploration, reaches accord with native group

The oil industry has taken a hard hit with prices falling as much as 50 percent over the past year.
The oil industry has taken a hard hit with prices falling as much as 50 percent over the past year. | Care_SMC / Flickr

The Bolivian government, which faces a limit of hydrocarbon reserves for another decade, has reached accords with native populations under which these groups will obtain infrastructure projects while the government will in exchange be able to explore and produce gas in protected areas, analysts told Latin Business Daily.

According to the latest reserve certifications, as of the end of 2013, Bolivia had only 10.6 trillion cubic feet (Tcf) of natural gas.

“Bolivia uses from these reserves approximately 0.8 Tcf annually so this means that we have proven reserves only for another 10 years. This creates a need for exploration so that there can be sustainability beyond that,” Raul Velasquez, a hydrocarbon analyst of the Jubileo Foundation, a non-government organization based in La Paz, said Tuesday in a telephone interview from Bolivia. 

“Bolivia is primarily a gas-producing country,” he said. Most of the gas produced in the country is exported to two countries, Brazil and Argentina. More than half of the country's total export revenue has been coming from gas exports.

Because of this, the government wants to expand the regions where gas is searched and those explorations have recently expanded to protected areas, he said. “The government has reserved 98 areas for exploration and of this 15 overlap natural parks or protected areas,” he said. "State-owned hydrocarbon company YPFB is working on technical requirements that companies must follow to operate in or near protected natural parks. It also establishes the native population rights to consultation."

The consultation process is designed to give native populations a right to decide on whether or not they will accept a company operating near where they live. Already one of the native organizations, the Itika-Guasu, which is the popular assembly of the Guarani people, has already issued a statement saying they agree, Velasquez said.

The government will give compensation in the form of projects “such as the construction of infrastructure and bridges” and the native communities will have the freedom to choose those projects that they will give priority,” he said.

“Bolivia has launched a process of change at several levels. There is a deep democratization in the possibility of access to government,” Carlos Monge, Latin American Director of the Natural Resource Governance Institute, based in Lima, Peru, said by telephone .

Bolivia has managed a fast economic expansion and significant increases in revenue following its decision in the middle of the past decade to nationalize the country´s hydrocarbon industry.

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