Mauricio Medinaceli Monrroy
Private Consultant
Oil - Natural Gas - Energy

Español (spanish formal Internacional)English (United Kingdom)

"Bolivian gas reached Brazil"

This was the headline of the Bolivian newspaper “El Diario” in July 2nd of 1999 because the 1st of July of that year was a historic cornerstone for the country. After 25 years of hard work, the most important energy integration project in South America, the Bolivia - Brazil gas pipeline, was completed. A project that explains, among other things, half of the Bolivian economic growth of the last 15 years.

For this reason, I invite you to this historic tour that reminds us the great national effort that this project demanded.

In the Bolivian city of Cochabamba on Wednesday May 22nd of 1974 the presidents of Bolivia (Hugo Bánzer) and Brazil (Ernesto Geisel) signed the energy cooperation agreement that, among other issues, started the option to sale natural gas from Bolivia to Brazil. At that moment, the "talks" discussed a volume close to 6.8 million of cubic meters per day. The Bolivian newspaper “El Diario” (a valuable source of historical information for this post) captures the moment when both presidents signed this agreement.



On February 9th of 1984 in the Bolivian city of Santa Cruz de la Sierra, the presidents of Bolivia (Hernán Siles) and Brazil (Joao Figueiredo) re opened the 1974 project focusing on natural gas.


On August 2nd of 1988, the Presidents of Bolivia (Víctor Paz Estenssoro) and of Brazil (José Sarney) signed reverse notes where they committed to the purchase and sale of products derived from natural gas, electric power and natural gas. Note that on this occasion the president of Brazil arrived at the city of La Paz and was able to speak at the Congress.



On February 17th of 1993 in the Bolivian city of Cochabamba, the presidents of Bolivia (Jaime Paz Zamora) and Brazil (Itamar Franco) signed the first and historical contract. The GSA between YPFB and Petrobras. Although the headline of the newspaper highlights an impasse occurred at the time of signing, this should not diminish the merit (from my point of view) to the significance of the event. The press explained that the project would increase GDP by 1%, how far was from the truth; this project contributed much, much more than just 1%.



On September 4th of 1996, in the Bolivian city of Cochabamba the presidents of Bolivia (Gonzalo Sánchez de Lozada) and of Brazil (Fernando Henrique Cardoso... in my opinion one of the best presidents of Brazil of recent times) signed the definitive contract and started the construction of the gas pipeline.


Finally, on July 1st of 1999, Bolivia sent for the first time in history gas to Brazil. "Bolivian Gas arrived in Brazil" would be the headline of the Bolivian newspaper El Diario. "The business of the century ... after 25 years of negotiations" said the newspaper La Razón.



25 years of work. 5 Bolivian presidents. Hundreds of Bolivian professionals. Made this dream come true.

I can’t be indifferent with this headline: "Bolivian gas arrived Brazil." This headline tells us about courage and perseverance, talks about big dreams, tells us that when Bolivians want... we really can.

When the GSA is close to the end (in another post I’ll explain why Bolivia will still send gas for a couple of years) and this July 1st of 2019 we will remember XX years of the arrival of Bolivian gas in Brazil, I wanted to pay tribute to all the people who worked in a visible, and often invisible, way for the construction of a project that gave us “food” the last 15 years.

While I’m still strong and alive I will remind to the new generations the monumental effort that our country made to get this project done. It will be of more civilized times when we will be able to pay tribute to all those who worked on this project and we can say with pride: there was a time when we had big dreams.

Mauricio Medinaceli Monrroy

La Paz, June 27th of 2019


The future of Bolivian natural gas exports to Brazil

In 2019 will end the largest national Bolivian project of the last 50 years. A project intiated and agreed between Bolivia and Brazil during the devalued "neoliberal era", a project that interestingly fed us in the so-called "Socialism of the 21st century". In fact, half of the Bolivian economic growth of the last 10... yes 10 years, is because the export of natural gas from Bolivia to Brazil. The next year the initial GSA will end, and the main question remains: What will be the future?


There are many, many topics that I could discuss in this post. From our low certified reserves of natural gas, poor exploratory campaigns, the aggressive diplomatic policy we (as Bolivians) had with Petrobras during the "nationalization" euphoria, the absence of new markets (Paraguay and Peru are very small), the insufficient policy of natural gas industrialization, in short, there is a lot of material to be cut, but now I want to concentrate on some questions that usually the media ask me. I must say that this discussion was raised in a paper that we wrote with a good colleague (Jorge Gumucio) some months ago and you can download it in this link, naturally all the comments will be welcome.

Will Brazil still buy natural gas from Bolivia? The answer is yes, perhaps not at the current volumes and prices, but with high probability it will. Why do I have this kind of certainty? Because it turns out that when very few wanted to finance the pipeline (back in the nineties) Petrobras agreed to finance the construction and after Bolivia "will pay with gas." In technical jargon this part of the contract is called TCO (Transport Capacity Option). Have Bolivia already paid the entire cost of the pipeline? The answer is no. To complete its payment, Bolivia must, at least, deliver 6 million cubic meters per day for 20 more years (approximately); in this way, of these 6 million, a "little part" will be used to pay the financing granted by Petrobras in the past.

Now, 6 million seems very low since the total pipeline capacity is close to 30. Then, what Bolivia can do with the rest of the capacity? Here again we come with the famous "take or pay" clause. What this clause implies? I will try, as usual, to explain it through an example.

Now that the end of the year is close you and your friends decided to spend the New Year’s Eve in that restaurant you like so much... yes, yes, the one where more than once you solved the problems of the country and the world with some few beers. The problem arises when 24 of your 30 friends ensure attendance and the rest did not. The owner of the restaurant, friend at last, proposes you the following treatment: "Look, you pay the fee of 24 attendees and if more arrive, I will set the table for 30". The owner of the restaurant has "for sure" the payment for 24 with the possibility to increase to 30, in fact, he doesn’t care if only 1 comes, since he received the money of 24. In some sense, you and your friends sign a "take or pay" contract for 24 dinners.

Now, let's put names. We call the owner of the restaurant Bolivia; you and your friends are from Brazil and each dinner is equivalent to 1 million cubic meters per day. Until now, Bolivia was "very happy" because received payment for 24 MM mcd regardless of whether Brazil withdraws it or not, the "take or pay" was very advantageous for Bolivia, because had a "safe" income.

So, the question: How much more will Brazil buy from Bolivia? Could be more precise. What will be the new amount (if any) of the "take or pay" between Bolivia and Brazil? Returning to the example, how many dinners will the owner of the restaurant be assured? 24, 15, 10, 6? Based on some calculations and considering some statements (in Brazil) we estimate (in the paper that I comment) that this "take or pay" can be in the order of 15 MM mcd. Does this imply that Brazil will only be limited to that purchase? Not necessarily, Brazil could well demand higher volumes if the demands of the (Brazilian) market requires.

What could we say about the natural gas export price? Are we competitive? Before the second question the answer is yes and no. If the tax return (approved by the Incentives Law) to the oil companies is met (say tax reduction) then the Bolivian natural gas could compete with the LNG or the domestics gas produced by Brazil. On the contrary, if the companies don’t receive such tax incentive, then will very difficult to reach reasonable levels of competitiveness.

What did I just write? That taxes that Bolivia will receive from natural gas exports will be lower? Is not 50% anymore? The answer is yes. During the administration of the current president, with the Incentives Law approved the Bolivia’s government returns to private companies’ part of the taxes paid. Thus, instead of 50% (by royalties) Bolivia could receive between 35% and 50%.

Also, in this subject many times they ask me: What will be the new price with Brazil? And my respond is: "With high probability it will be lower". But of course, this vague and shallow answer is because the difficulty to explain in a short time, often in front of cameras or through a microphone, what I will try to do now.

Defining the base price is only half the problem, the other half lies in the index criteria. What? Let's see. When I write "Index Criteria" I mean how the price will "move" over time. For example, you agree to an initial salary (say USD 1,000 per month) that will be adjusted for inflation each year, in this case, the index criteria is the price growth rate. Another example, you with your couple agree that after getting married you will go at least once a month to "go out to dinner", after some years it turns out that they go once a year... in this case the index criteria were the children :)

Figure 1 shows a high base price (Pa) in 2019 but, because the index criteria, a low price (Pb) in 2029; in this case, the natural gas seller indexed prices to a falling criteria.


In this second graph, you see a low base price (Pb) in 2019 but, again due to the indez criteria, a high price (Pa) in 2029. In this case, the seller's position is better. Naturally, as a seller, you can do very bad things: set a low base price and at the same time define a "downward" indexation criteria.


Because nowadays Brazil has domestic gas production (in the 90’s was not the case) both from and LNG access, with high probability, will look for low base prices and not very encouraging (from Bolivia’s perspective) indexation criteria.

In this context, the following question arises: If Brazil and Argentina (the other Bolivian natural gas market) want lower prices and volumes, what other serious alternatives do we have? Can we have the luxury of not accepting unfavourable contractual conditions? Anticipating the possible answers, my comments are:

  1. 1)The urea industrialization project is very small... 20 times smaller than the sale of gas as a raw material and, worse, with subsidized gas prices.
  2. 2)Paraguay and Uruguay are very small markets
  3. 3)Chile is a vetoed option
  4. 4)Peru has its own gas

Bolivia’s negotiating position is very deteriorated. Just as the last years we harvested the sowing of the evil “neoliberal period”, now it’s time to harvest the sowing of the last 10 years (of the Socialism of the XX1 century).

S. Mauricio Medinaceli Monrroy

La Paz, november 2018


The natural gas market in Brazil: Do we (as Bolivians) have reasons to get worry?

Everything started on a sunny Saturday morning when I was ready to give a bath to my little dog, at that moment at home made me notice two things: 1) we are close to winter and; 2) It's 8 o clock in the morning. With such reasons, I “spent” my time reviewing the local press and found this headline: "Ambassador of Brazil [in Bolivia] anticipates that the gas demand will be greater [in Brazil]" (

Curious about this quote I went to the magnificent web page of the Ministry of Mines and Energy of Brazil to the stats section about the natural gas market in our neighboring country ( What I found is very interesting and for that, I want to share it with you.

First, the following Figure shows the natural gas in Brazil. Since 2016 there is a notable decrease in total demand (almost 20 million cmd). This is high, just remember that Bolivia - Brazil GSA is just over 30 million cmd.


Why the demand in Brazil decreased? The following figure helps us to see that this decrease responds, mainly, because a drop with the power generation plants volumes. Although the industrial sector declined, it did not do so in such magnitude.


In the headline I mentioned, the ambassador pointed out:

"Now the economy is growing, which will grow to almost 3% so the demand for natural gas will be greater. When the economy grows, all industrial and commercial activities and everything else grows. "

Certainly, the data does not support this perception. Why? Because with a high probability the demand for natural gas in Brazil decreased because hydro generation increased, decreasing the demand for thermo generation. Not necessarily because the industrial sector consumes less gas.

How did Brazil adjust its gas supply? The following figure is very illustrative. Let's see. The blue bars represent the domestic production of natural gas in Brazil, the red ones are the Bolivian natural gas supply and the gray represents LNG imports. This is how Brazil faced a lower demand: significantly reduced LNG imports, decreased imports from Bolivia and increased... yes, increased Brazilian domestics natural gas production.


And if you think that this scenario (from the Bolivian perspective) is not a good one. Let me show you the following Figure where I present the reinjection of natural gas in Brazil. Reinjection? It turns out that when a country produces natural gas and has no markets for this product faces, at least, two options: 1) burn natural gas or; 2) reintroduce this gas again into underground (reinjection). Then, with high probability, Brazil is anxious to "accommodate" these volumes (reinjected) to their own market... because, come on, reinjection costs a lot of money.


How does it affect Bolivia? If Brazil has such volumes of natural gas re-injected, it may not be convenient for this country so sign a new GSA (with Bolivia) with high “take or pay” volumes... perhaps. I must add that this observation came from a very good friend from Santa Cruz de la Sierra.

Well my dear friends I hope these statistics will help you to understand the much-loved Brazilian market. For my part, now we will go with the Santi (my son) to give some bad news to “Boti” (our little dog)... it’s “bath time” (really bad time for him).

Have an excellent Saturday!

Mauricio Medinaceli Monrroy

La Paz, May 19th 2018


Electoral proposals for the hydrocarbons sector in Bolivia or the reasons for my little hope

In general, I don’t like unpunctuality and I like less when I'm the unpunctual person, because I feel it’s a situation of high injustice, with people who arrived "on time". I touch this topic because last Friday I arrived very late to a meeting prepared by my good friends of INESAD... an unforgivable fault really.

In this meeting I presented a document that I wrote (in the framework of an interesting project carried out by INESAD) on the main challenges of the electoral proposals on hydrocarbons (in Bolivia) for the next national elections.

I want to comment the main ideas of the text, starting in the same way as I did in the presentation. I want to start by indicating that the problems of the hydrocarbons sector are, I believe, of public knowledge (low reserves, stagnant production, absence of markets, subsidies, etc.), solutions are also known... what is necessary are political decisions.

Having said that, I now point out what (from my point of view) are the main challenges in the sector. I do this for a formal structure, since the real discussion that I want to open comes later... that is, paragraphs below. In any case, let's start with the challenges:

1. Legal framework. At this moment the sector is "upside down", in Bolivia the famous Kelsen's pyramid is inverted. Ministerial resolutions and YPFB decisions are, many times, above the laws and the national constitution. Then it is necessary to reorganize everything and have a consistent legal framework.

2. Institutional framework. During the last years there was a "Soviet" vision of the sector. Maybe now the reader will be asking himself: Soviet? Yes, this “Soviet” vision (once again, from my perspective) privileges tangible projects... separation plants, industrialization plants, etc. Which is good, nevertheless, there is also something very important to be considered in the country, that "something" are the institutions.

Perhaps “institutions” sounds like a “gringo” invention that has nothing to do with our way of doing things. However, they are very important... seriously. Let me explain my point of view with this analogy. Imagine that you and your friends decide to play a football game with your lifetime the "enemy". If you and your friends have a "Soviet" vision of life, you will only focus on goals... at any cost. Is this enough? Well, no.

Imagine that the game is played without a referee and without rules. What could you expect? Nothing less than chaos, therefore it will be necessary to put some order, rules of the game are necessary... some "institutions" are necessary.

Something like this is currently happening in the hydrocarbons sector in Bolivia, where the regulatory body (ANH) has very little room for action, the Ministry of Hydrocarbons and YPFB often assume similar functions. In other words, we have an institutional framework so complex that private investors in our country need to open fields with a clean machete in an endless bureaucratic jungle.

3. YPFB (Bolivian state oil company). Nowadays it would be impossible to propose privatization (or at least an opening for private capital) in YPFB. That’s why we have YPFB for long. If this is the case, how do we improve this company? Is only new organizational chart enough? In this field there’s a lot to discuss.

4. Tax system for E&P projects. A tax (royalties and IDH) of 50% on gross production is something that only works with high prices and secure markets. While this system continues the investment in exploration will not be aggressive.

5. Subsidies. Those who know me understand my position: it is necessary to eliminate them. In this link you can find a discussion about it.

6. GSA to Brazil. Thanks to the way we manage the sector during the last 12 years, it’s almost impossible to think of a new contract with Brazil equal to or better than what we have now. Surely the new contract will be with lower prices and shorter term. Therefore, it is necessary to rethink our commercial opening.

There are probably many other problems in the sector, these are only some that, I believe, need urgent attention. However, here comes the substantive question: Do you believe that a political-supporter representative will propose the solution to these problems? In other words, do you think a politician will propose:

Eliminate final consumer price subsidies

Decrease taxes for oil companies

Sign a new contract with Brazil in less advantageous conditions

Corporatize YPFB

Improve the legal system

Or better said: Would the population accept such proposals? I think it will be very difficult. So what we can do? Tell the public that these things will not be done (like eliminating the subsidy, for example) and once in the Government, implement them?

For these reasons I ended the talk by commenting to the attendees (who were kind enough to stay) my full loss of hope in the immediate future. Solving these problems and substantially raise the gas and oil production will take years... many years.

Or perhaps all this is a divine design to stop being a highly dependent oil and gas country?

Today I will balance my lack of hope, because I will go with my Santi to receive our prize for having completed the 2018 FIFA album.

Mauricio Medinaceli Monrroy

La Paz, May 4th 2018


Conclusions of the document: "Governance of unconventional natural gas in Latin America: the challenge is balance"

Mauricio Medinaceli Monrroy

Conventional and non-conventional hydrocarbons:

Conventional hydrocarbons migrated from the bedrock to the reservoir rock and -depending on the porosity and permeability conditions- the gas flows relatively easily from the rock to the well and, through drilling, to the surface. In general, this "easily" is a common characteristic of so-called conventional hydrocarbons.

In principle, unconventional hydrocarbons are those that are not housed in porous and permeable rocks and do not have the capacity to flow without intervention. The tight gas is the natural gas contained in very compact rocks, sandstones and/or limestones, with very low permeability values. "They are not mother rocks, they are “storage” rocks although very compact. Therefore, the gas has not been generated in them, has migrated from the “mother” rock and is contained in microfractures and in the low matrix porosity of the rock."

Shale gas, like shale oil, is a subset of shale formations. The literal translation would imply that it is a gas that is found in shale, however, a broad interpretation of the word should be made, it should include "the lithologies that constitute the mother rocks of hydrocarbons: rocks with very fine grain size, rich in organic matter and with low levels of porosity and matrix permeability".

The exploitation of shale gas can be carried out through various techniques, including those used for conventional hydrocarbons; However, due to the low permeability of the rock, the primary methods of exploitation (and economically efficient) involve the combination of two technologies: 1) horizontal drilling and; 2) Fracking techniques, whose name is due to the fact that this technique involves breaking the stone with a large flow of water mixed with other components. Both exploitation techniques result in higher costs associated with non-conventional hydrocarbons, compared to conventional ones.

Possible economic impacts:

The exploitation of shale gas in the United States was successful with two fundamental variables for its economy: 1) reduced natural gas prices below US$/MMBTU 5 and; 2) allowed to reduce the natural gas imports through LNG. Hence, many countries in the world want and, in many cases, need to promote this type of project. Evidently the environmental costs for new projects and the little experience, diminish the strength with which these two impacts could benefit the economies that so decide.

Now there is no definitive conclusion regarding the impact on employment, wages and economic growth due to the different positive, negative and interrelated conclusions that may exist. One of the main impacts of the new production of natural gas is the creation of new jobs within the industry. However, these could be challenged by other studies that point to a modest and focused impact.

Regarding the positive impact of shale gas development in local communities, the following potential links are identified: 1) investment in the construction and operation of wells could indirectly increase the demand for other goods and services (vehicles, gravel, concrete, fuel, etc.), as a result, the industries that provide these goods or services could increase the employment and income of their workers, however, in some regions of US highly paid jobs were given to mobile and trained personnel of the companies; 2) land owners usually receive payments that could be spent within the region; 3) taxes paid during the exploitation stage could activate the regional economy; 4) Workers who receive income from activities derived from the exploitation of shale gas could improve economic activity.

There are also some dangers: 1) the arrival of new workers in the region could increase the demand for housing and therefore the rents could increase; 2) due to heavy truck traffic the need for improvements in transport infrastructure is not necessarily met by local governments; 3) extraction of natural gas could discourage tourism in the region; 4) the factors indicated above could decrease the value of the properties not related to the exploitation of shale gas and; 5) a "natural resources curse" effect could be created within the regions.

Shale gas and environment:

Water and health, in one hand, water is transported from the rock to the surface with a high content of hydrocarbons; On the other hand, the production of unconventional involves the injection of chemicals into the formation as an auxiliary technique.

Air, during fracking operations, there is the possibility that methane quantities may "find their way" to the surface or groundwater, in addition to the possible fractures in cementation (underground) some fractures can also be present in pipelines. In addition, some volatile organic components are related to the exploitation of hydrocarbons, apparently the shale gas ventures are an important source of environmental contamination near the field, in any case, they are results are still preliminary.

The exploitation of shale gas has two important and important features: 1) the decline rate of wells production is more pronounced than in the case of conventional exploitation and; 2) the surface area used is also higher. The combination of both characteristics means that, for a company to maintain a reasonable production profile it is necessary to drill an increasing number of wells, which implies an extensive use of the land.

Biodiversity, the characteristics of exploration and exploitation of shale gas can have an important impact on biodiversity, given the increasing use of soils and the amount of water used in the processes.

The exploitation of shale gas may require that agricultural ventures must relocate, which in turn affects other regions not directly related to the exploitation of shale gas. "Fugitive" emissions of greenhouse effect could cancel the positive effect that natural gas has about the use of coal or oil. However, due to the decrease in prices of natural gas, many electricity industries began the process of migration from coal to natural gas, decreasing the greenhouse emissions of the electricity sector. Thus, if methane "emissions" are kept at low levels, natural gas can reduce global greenhouse emissions.

Regulatory conditions:

According several authors, the factors that allowed the development of unconventional hydrocarbons exploitation in the USA were: 1) Geological experience, 2) many shale gas deposits had important liquid components, 3) in 1980 the Crude Oil Windfall Profit Tax Act offered a reduction of tax credit to the production of unconventional, 4) Energy Act of 2005 explicitly excluded the hydraulic fracturing of the Environmental Protection Agency's Clean Water Act, 5) the property of horizontal drilling and hydraulic fracturing technologies are with US companies, 6) in USA there is a dynamic and competitive service industry that can meet the additional needs for the exploitation of hydrocarbon resources unconventional.

Some market conditions are: 1) producers have access to a very good network of gas pipelines; 2) the gas can be sold easily, due to the existence of several buyers and sellers; 3) in 2008 gas prices reached US$/MMBTU 10; 4) the industry was dominated by small and medium enterprises and; 5) capital markets are more likely to finance gas and oil projects.

Shale gas in Latin America:

According to USA Energy Information Administration (EIA) in Latin America the estimated conventional reserves reach 326.353 million barrels, which represents almost 20% of the world reserves. On the other hand, shale oil reserves represent 72,800 million barrels, approximately 21% of the total shale oil in the world. With these figures it can be inferred that, if considered shale oil, the total oil reserves of the region could increase by 22.3%.

At the global level, LAC has 3.8% of the reserves of conventional natural gas; However, with respect to the global reserves of shale gas, the region's share is 27.4%, therefore, the potential of Latin America in this last resource is not negligible; in fact, unconventional reserves almost quadruple conventional natural gas ones. The countries with potential shale gas reserves are Argentina, Mexico and Brazil, which together explain a little more than 80% of the total reserves of LAC with 1,592 TCF.


According to EIA report, Argentina has the third (technically recoverable) reserve of shale gas in the world, after USA and China. These reserves reach 802 TCF located in: 1) The Neuquén basin in the Los Molles and Vaca Muerta formations with technically recoverable reserves of 583 TCF; 2) San Jorge Basin in the Aguada Bandera and Pozo D-129 formations with 86 TCF; 3) Austral Magallanes basin with the Inoceramus and Magnas Verdes formations and 130 TCF, finally; 4) Chaco-Paranaense Basin with Ponta Grossa and 3.2 TCF.

Currently the development of shale in the country is in the formation called Vaca Muerta located in Neuquén basin at the southwest of the country, with an area of ​​36,600 SK with ample potential to produce natural gas and oil. According to Di Sbroiavacca (2013) with an average annual investment of US $ 16,000 million (amount equivalent to the import value of natural gas) the development of shale gas could achieve self-sufficiency in the country as of 2022; situation that does not occur with shale oil, given that even with the development of unconventional, it is not possible to achieve self-supply of this resource.


In November 2013, Brazil concluded the auction of concessions exclusively on land and in areas with potential to produce natural gas and unconventional natural gas, through hydraulic fracturing. The 12th round, approved by CNPE Resolution No. 6 of June 25, 2013, offered 240 blocks of exploration and exploitation of oil and natural gas distributed in 7 sedimentary basins. Of the total offer, 72 blocks were awarded, the winners were: 1 ) Petrobras with 49 to explore and exploit areas with possible gas reserves; 2) Trajectory Oil & Gas obtained four concessions after offering approximately 1.3 million dollars for rights over blocks located in the Sergipe-Alagoas basin; 3) the French GDF Suez was part of a winning consortium with Petrobras; 4) the Canadian Alvopetro with four concessions and; 5) the Geopark group with a concession.


In the Colombia Round 2012 the ANH offered and awarded the first contracts for the exploration and exploitation of unconventional hydrocarbons. In Type 2 (E & P) Blocks, 12 were offered and 5 were awarded; while in Type 3 Blocks (TEA) 18 were offered and none was awarded. For the 2014 Round, 18 Blocks were offered: 1) Sinú-San Jacinto Basin 1 Block; 2) Upper Valley Basin 3 Blocks; 3) Cuenca Valle Medio 2 Blocks y; 4) Cuenca Cordillera 13 Blocks, see the following Figure.


The Mexican State is currently carrying out reforms within the hydrocarbon sector in the country. One of the central aspects of the Mexican reform is Round 0, given that through it the areas of hydrocarbon interest that will remain with PEMEX were defined. According to information published by the CNH on August 13, 2014, the Energy Secretariat granted Petróleos Mexicanos 120 assignments that give it the right to continue carrying out hydrocarbon extraction activities, which together account for 71% of national production. of oil and 73% of national gas production. In terms of reserves, the fields granted have 68% of the 1P reserve and 49% of the country's 2P reserve. The allocations granted, as of August 13, 2014, correspond to production fields of the conventional type.


Abdullah, J. (2013). The Shale gas Revolution and its Impact on the GCC Economy. Al Jazeera Center for Studies. Report.

Agencia Internacional de Energía (2013), “World energy outlook WEO 2013”.

----- (2012), “Golden rules for a golden age of gas”.

----- (2012), “World energy outlook WEO 2012”.

----- (2011), “World energy outlook WEO 2011”.

Akizawa, H., Gardner, E. & Ueda, K. (2004). “Are Developing Countries Better Off Spending Their Oil Wealth Upfront?”. IMF Working Paper, WP/04/141.

Arbex, M. & Perobelli, F. (2010). "Solow meets Leontief: Economic growth and energy consumption". Energy Economics Journal. No. 32. Pp. 43-53.

Arroyo, Andrés (2013), “La Argentina y el Estado Plurinacional de Bolivia, más que partícipes de una frontera común. Desarrollo sostenible, inversiones y política en torno a los recursos del gas natural”, Serie 168 Recursos Naturales e Infraestructura CEPAL, Septiembre.

Asche, F.; Oglend, A.; Osmundsen, P. (2012). Gas versus oil prices the impact of shale gas. Energy Policy 47. Pp. 117-124.

Barro, R. & Sala-i-Martin, X. (2004). Economic Growth. Segunda Edición. The MIT Press. Cambridge, Massachusetts.

Bravo-Ortega, C. & De Gregorio, J. (2002). “The Relative Richness of the Poor? Natural Resources, Human Capital and Economic Growth”. Mimeo. Berkeley and Central Bank of Chile.

Brown, J. (2014). Production of Natural Gas From Shale in Local Economies: A Resource Blessing or Curse? Mimeo.

Brunnschweiler, C. (2006). “Cursing the blessings? Natural resource abundance, institutions, and economic growth”. Center of Economic Research at ETH Zurich. Working Paper 06/51, (May).

Buto, O. (2014). Reexamining the United States’ shale gas success. Is Europe letting the fox in the henhouse? Heinrich Böll Stiftung. Washington, D.C.

CEPAL (2014), “Pactos para la igualdad”, Abril.

-------- (2013), “Recursos naturales. Situación y tendencias para una agenda de desarrollo regional en América Latina y el Caribe”, Capítulo 2, CELAC, Diciembre.

Chong, J. & Simikian, M. (2014). Shale gas in Canada: Resource Potential, Current Production and Economic Implications. Library of Parliament, Ottawa, Canada. Publication No. 2014-08-E.

Collier, P. & Hoeffler, A. (2005). “Resource Rents, Governance and Conflict”. Journal of Conflict Resolution. Vol. 49 No. 4, Pp. 625-633, (August).

Devold, H. (2009). Oil and gas production handbook: an introduction to oil and gas production. ABB Oil and Gas. Edition 2.0. Oslo.

Di John, J. (2005). “Oil Abundance and Violent Political Conflict: A Critical Assessment”. Journal of Development Studies. Vol. 43, No. 6, 961-986, (August).

Di Sbroiavacca, N. (2013). Shale oil y shale gas en Argentina. Estado de situación y perspectiva. Documento de Trabajo, Agosto 2013. Departamento de Economía Energética. Fundación Bariloche. Argentina. ©

EIA. (2013). Technically Recoverable Shale oil and Shale gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States. Departamento de Energía de los Estados Unidos de América. Junio 2013.

Estrada, Javier (2013), “Desarrollo del gas lutita (shale gas) y su impacto en el mercado energético de México: Reflexiones para Centroamérica”, CEPAL México, Octubre.

Gallun, R., Wright, Ch., Nichols, L., y Stevenson, J. (2001). Fundamentals of Oil and Gas Accounting. Pennwell Books. 4th edition. Tulsa, Oklahoma.

García, J. (2012). "Hidrocarburos no convencionales I y II". Revista Tierra y Tecnología. No. 41. Primer Semestre de 2012. Pp. 28-32. Ilustre Colegio Oficial de Geólogos. Madrid, España.

Global Witness. (2007). “Oil Revenue Transparency: A Strategic Component of U.S. Energy Security and Anti-corruption Policy”.

GSU - German Advisory Council on the Environment. (2013). Fracking for Shale gas Production: A contribution to its appraisal in the context of energy and environment policy. Statement No. 18. May. ISSN 1612-2968.

Gutiérrez, N.; Alonso, J.; Giusiano, A. (2013). Evaluación del "Shale oil" de la Formación Vaca Muerta. Análisis de la declinación de la producción. Revista Petrotecnia, febrero 2013.

Hartley, P.; Medlock III, K.; Temzelides, T.; Zhang, X. (2014). Local Employment Impact from Competing Energy Sources: Shale gas versus Wind Generation in Texas. Discussion Paper 14.15. The University of Western Australia.

Hausmann, R. & Rigobon, R. (2002). “An Alternative Interpretation of the ‘Resource Curse’: Theory and Policy Implications”. National Bureau of Economic Research, Working Paper Series. Working Paper 9424. (December).

Hedden, S.; Moyer, J.; Rettig, J. (2013). Fracking for shale gas in South Africa: Blessing or curse? African Futures Papers. No. 9. Institute for Security Studies.

Hughes, David (2013), “Drill, baby, drill. Can unconventional fuels usher in a new era of energy abundance?”, Post Carbon Institute, Febrero.

IHS. (2011). America’s New Energy Future: The Unconventional Oil & Gas Revolution and the US Economy.

IHS. (2013). America’s New Energy Future: The Unconventional Oil & Gas Revolution and the US Economy.

Ionescuy, O. & Pearsonz, I. (2013). Unconventional gas: the economic theory is challenged. Mimeo.

Leite, C. & Weidmann, J. (1999). “Does Mother Nature Corrupt? Natural Resources, Corruption, and Economic Growth”, IMF Working Paper, WP/99/85, (July).

Johnston, D. (2003). International Exploration Economics, Risk, and Contract Analysis. Penwell Books. Oklahoma

Johnston, D. & Johnston, D. (2002). Economic Analysis and Risk Modelling University of Dundee. USA.

Manilo, P. & Mastromonaco, R.; (2014). The Local Economic Impacts of Unconventional Shale Development. Mimeo.

Marcellino, D. (2014). Unpacking the Shale gas Revolution. International Policy Analysis. Friedrich Ebert Stiftung.

Mattar, L.; Gault, B.; Morad, K.; Clarkson, C.R.;Freeman, C.M.; Ilk, D.; Blasingame, T.A. (2008). Production Analysis and Forecasting of Shale gas Reservoirs: Case History-Based Approach. SPE 119897

Medinaceli, M. (2007). "Recursos de Hidrocarburos: fuentes y asignaciones". Programa de las Naciones Unidas para el Desarrollo (PNUD). La Paz, Bolivia.

Medinaceli, M. (2010). Contratos de Exploración y Explotación: América del Sur. Organización Latinoamericana de Energía (OLADE), Febrero 2010, Quito – Ecuador.

Mehlum, H.; Moene, K. & Torvik, R. (2006a). “Institutions and the Resource Curse”. The Economic Journal, 116, Pp. 1-20, (January).

Mehlum, H.; Moene, K. & Torvik, R. (2006b). “Cursed by Resources or Institutions?”. The World Economy, 10.1111/j.1467-9701.2006.00808.x.

Mian, M. (2002). Project Economics and Decision Analysis: Volume 1: Deterministic Models. Pennwell Books; 1st edition.

Murshed, M. (2002). “On Natural Resource and Abundance and Underdevelopment”. Background Paper. World Development Report 2003. (April).

Newendorp, P. & Schuyler, J. (2000). Decision Analysis for Petroleum Exploration. 2nd. Edition. Planning Press TM.

Newton, C. (2014). US shale gas and Gas Economics and Insights for Indonesia.

OLADE. (2012). Panorama General de los Hidrocarburos no Convencionales. Quito, Ecuador.

Papyrakis & Gerlagh (2004). “The Resource Curse Hypothesis and its transmission channels”. Journal of Comparative Economics 32, Pp. 181-193.

Rahm, B. & Riha, S. (2014). Evolving shale gas management: water resource risks, impacts, and lessons learned. Environ. Sci.: Processes Impacts, 2014, 16, 1400

Roed, E. (2004). “Escaping the Resource Curse and the Dutch Disease? When and Why Norway Caught up with and Forged ahead of its Neighbors”. Statistics Norway, Research Department. Discussion Paper No. 377, (May).

Robinson, J.; Torvik, R. & Verdier, T. (2006). “Political foundations of the resource curse”. Journal of Development Economics 79, Pp: 447-468. (January).

Rosicki, R. (2014). Assessment of shale gas potential in Poland. Faculty of Political Science and Journalism. Adam Mickiewicz University. Mimeo.

Rosser, A. (2006). “The Political Economy of the Resource Curse: A Literature Survey”. Working Paper No 268. Institute of Development Studies. (April).

Sach, J. & Warner, A. (1995). “Natural Resource Abundance and Economic Growth”. National Bureau of Economic Research. Working Paper Nº 5398.

Sala-i-Martin, X. & Subramanian, A. (2003). “Addressing the Natural Resource Curse: An Illustration from Nigeria”. IMF Working Paper. WP/03/139. (July).

Sandbu, M. (2005). “Natural Wealth Accounts: A Proposal for Alleviating the Natural Resource Curse”. World Development, Vol. 34, No. 7, Pp. 1153-1170.

Saussay, A. (2013). Can the US shale revolution be duplicated in Europe? Mimeo. French Economic Observatory.

Shaxon, N. (2005). “New Approaches to Volatility: dealing with the ‘Resource Curse’ in Sub-Saharan Africa”. International Affairs 81, 2, Pp. 311-324.

Slavin, N. (2007).Investing in Oil and Gas Wells. BookSurge Publishing.

Stevens, P. (2003). “Resource Impact – Curse or Blessing? A Literature Survey”. Mimeo. Centre for Energy, Petroleum and Mineral Law and Policy, University of Dundee, Dundee – UK.

Stevens, P. (2013). Shale gas in the United Kingdom". Energy, Environment and Resources 2013/02. Chatham House.

Sullivan, D. (2014). History of Shale gas Development Policy. Mimeo.

Slingerland, S.; Rothengatter, N.; Van der Veen, R.; Bolscher, H.; Rademaekers, K. (2014). Economic Impacts of Shale gas in the Netherlands. TEC1048NL. Triple E Consulting – Energy, Environment & Economics B.V.

Taillant, J.D.; Roeloffs, A.; Headen, C.; Valls, M.; D'Angelo, M.E. (2013). Fracking Argentina Informe técnico y legal sobre la fracturación hidráulica en Argentina. © Centro de Derechos Humanos y Ambiente & ECOJURE. Córdoba, Argentina.

UN (2013), “United Nations Decade of Sustainable Energy for all”, 68ava sesión de la Asamblea General, Agosto.

U.S. EPA Office of Air Quality Planning and Standards. (2014). Oil and Natural Gas Sector Hydraulically Fractured Oil Well Completions and Associated Gas during Ongoing Production.

Weijermars, R. (2013). Economic appraisal of shale gas plays in Continental Europe. Applied Energy. 106, páginas 100–115.

Wright, Ch. & Gallun, R. (2005). International Petroleum Accounting. Penwell Corporation. Tulsa – Oklahoma.

World Bank (2013), “Global Tracking Framework”.



Subsidies to the gasoline, diesel and LPG prices

What is a subsidy? In simple it’s a transfer of resources (usually money) from one group of people to another group of people. It’s not... and I repeat, it’s not, a gift from the president, the congress or some government official. To put things in simple: The Government doesn’t subsidize, the people do.

Let's review some examples of subsidies in our daily life. You and your family live in a nice building and, like everyone else, you must pay the "common expenses". In some co-owners meeting and after a broad discussion, you agree with some per family expense. However, there is a family of two older adults whom just survive with their rents (if any). Therefore, with high probability you and the co-owners will decide that the quota for the older couple should be lower. In this case, the subsidy is from you (and from those who pay the normal quota) to the couple in question.

Another example. You and your friends decide to dine at an expensive (or cheap) restaurant on a Friday night (it also works with Monday). For some strange reason, you decide to divide the bill in equal parts. This generates, at least, two results: 1) the "comelones" (hungry boys) will receive a subsidy from those whom want to "keep the line" and; 2) the average consumption will be higher, this is explained in a very funny way (using Game Theory) in the following video.

Next example. You (the rich one) and your friend (the poor one) win the lottery with a prize of USD 1,000. Because is your friend you (as the "rich man") give your share of the prize to your friend (the poor one). This case is also a subsidy, instead of given money... you stop receiving it.

As you can see, dear reader, a subsidy is not a simple technical instrument used by economists to earn some money. A subsidy is the result of an ethical and moral agreement between a group of people who want to live in peace. A subsidy is a central piece in the redistributive justice discussion in any country.

So why many people beliefs that is the governments that give subsidies? From my point of view, it’s because both the Congress and the Executive Power (president and ministers) design the subsidy mechanisms to "remove" money from some people and "deliver" to others.

With all these ideas in mind, now let me discuss the usual subsidies related to the prices of gasoline, diesel and LPG. I will also show some figures for the Bolivian case.

For purposes of exposure I will classify these subsidies into: Type 1, Type 2 and Type 3.

Type 1 Subsidy

Is the "classic" subsidy. It occurs when the Government defines a consumer price lower than the cost of production (or import), see the following figure. In this sense, the difference between the “costs + a reasonable profit” and the effective sales price, is the subsidy Type 1.


The figures for diesel and LPG in the case of Bolivia are presented below.


As a corollary I present the prices of diesel in Bolivia "with" and "without" the subsidy Type 1 plus the price of this product in USA.


Subsidy Type 2

This subsidy is the difference between international sales prices and domestic prices, as shown in the following figure. In technical language, this subsidy incorporates the opportunity cost. In Bolivia the oil producer’s price sold to the domestic market is well below international prices. This may benefit to the consumers of gasoline, diesel and LPG; However, those people who receive royalties and taxes calculated with this subsidized price may not be very happy. It’s not the same to receive the royalty on a USD/Barrel 25 price than on a USD/Barrel 50 price of.


Now, I present the figures for the Bolivian case.


I also put in your consideration a table that could be called "The lost fiscal evenues", it shows how much money didn’t receive local governments, municipalities, universities and others because the oil in the domestic market was below international prices.


Subsidy Type 3

A third form of subsidy is when the government decides to "lower" the taxes applied to gasoline and diesel to keep "people happy." In Bolivia we lived this in December 2010, during 5 days the Government decided to increase taxes on these products and thus raise final prices to the consumer. After many street demonstrations the increment was canceled, and everything returned to zero point. The following figure presents this type of subsidy.


For the Bolivian case, I present the fiscal revenues losses for Bolivian Government because the lower taxes.


A big hug my dear friends.

Mauricio Medinaceli Monrroy

La Paz, April 4, 2018


The Hydrocarbons sector in Bolivia during 2017

During the last days some news were around Bolivian newspapers. That with “recent” studies the new discoveries in Bolivia will give to the country between 12 and 120 TCF's of P1 natural gas reserves. These numbers are huge... a really lottery prize, but still we have to see the final results of the “studies” to confirm or not such tremendous figures. However, what doesn’t fill the headlines is the poor performance of the sector in 2017. Using data published by the Ministry of Mines and Energy of Brazil and the Ministry of Energy and Mining of Argentina (in the absence of official data in Bolivia) let me present some facts. Between parenthesis, it is sad for me the need to see official sites in Brazil and Argentina to know the Bolivian reality.

The following two graphs show the performance of gas production during last years, both in absolute value and the growth rate. As can be seen there are already two consecutive years that natural gas production shows negative growth. Not to mention that in year 2015 the growth was close to 0%. In this way, the Bolivian hydrocarbon sector today it’s not only "suffering" with low export prices (due to the drop in international oil prices) but also, because lower production volumes.



How are our natural gas exports going? The following graphs present the export volume, the sale prices and the total value of exports to Argentine. All these graphs can be resume as: although Argentina demanded higher natural gas volumes in 2017, the low export prices did not manage to significantly increase the total value exported. And even in this context, we could say that we were lucky, because if Argentina's demand had been lower, the situation would be worse... much worse.




With Brazil things are not good either. The following graph shows the lower demand of natural gas by Brazil, which did not reach even 25 MMcmd. This, associated with lower export prices, means that the 2017 export value to Brazil probably decreased, unfortunately there is no official information available in this regard, neither in Brazil nor in Bolivia.


Discuss the level of reserves is to discuss our future, which is good. But it is the present that should worry us, the hydrocarbon sector in our country began to show the “hilacha” since the collapse in international oil prices.

To conclude, I think it will sounds trite and banal to mention something like "it's time to take deep decisions..." or "it is necessary to rethink the hydrocarbons sector..." Personally, I think those times have passed and now it's time to minimize the damage, gather the troops and optimize processes, perhaps it is the task of new generations to get us out of this mess.

Mauricio Medinaceli Monrroy

Islamabad, March 3th 2018


Notes on recovery costs in Bolivian hydrocarbons sector

Ah! How difficult is to be a dad! There are many opportunities when I hear that to be a parent, one should take previous courses and approve some type of test. The argument goes like this: "We need drive license, vote permission... even work permission, but to have a child, nothing." In response to this argument, many angry parents respond that it would be an attempt to individual rights to create such thing as a "parents’ permission". The truth is that, personally, I think that some previous guidance would be healthy, because on many occasions I questioned about my parenthood performance.

One of the most serious questions that I usually have (as a father) is I should give my child everything he wants, in other words, should I cover all his costs (even the most eccentric ones) or not? An alternative to this would be give him an "allowance" (an amount of money per month) so he can solve all his problems. If I cover all his costs he (my son) will be very happy, but if I give him an allowance, perhaps when the price of movie tickets or PS4 increased (and not the allowance) my poor son will be in trouble... and naturally, I will be, with high probability, an evil father.

The above example will help me to contextualize the recovery costs in the oil sector that emerged some days ago in Bolivia. After several news about it, I decided to review the legal regulations ( # 3278) to see the magnitude of changes. Do we really want to control every penny? Was my initial question.

Looking article 1 of the regulation # 3278 I saw the following sentence: "according to the established in the Constitution". I raised my eyebrows. Reviewing the previous cost regulation (because let me tell you that there was a previous regulation) approved by regulation # 29504, there was no allusion to Constitution.

I took off my glasses and began to see (without seeing) that white wall in front of me. The noise of a helicopter made me react (as you will read, I am still living in Afghanistan) and then I continued reading the new regulation. When I came to Article 3 I saw another novelty, the regulation now introduces Oil Services Contracts. Ok! Now, everything starts to fit, with the current constitution and previous regulation. Let's see.

The following figure attempts to show the evolution of legal laws, regulations and events since 2005. The Hydrocarbons Law # 3058 of 2005 approved three types of contracts: 1) production sharing; 2) association and; 3) operation. In 2006, because the so-called "nationalization" the Bolivian Government signed Operation Contracts. In year 2007 the new Constitution determines that exploration and exploitation activities must be carried out with Service Contracts, the new Constitution was aprove in 2009. In 2008, the regulation #29504 regulatory didn’t take in consideration the new Constitution text and continued with the regulation of Operation Contracts from the so-called "nationalization". Finally, the new regulation # 3278 of 2017 established the creation of Petroleum Services Contracts.


Is this a simple wordplay? The answer, from my point of view, is no. What is the substantive difference between these contracts? It turns out that Operation Contracts of so-called "nationalization" are (in relation with cost recovery) a typical Production Sharing ones, this situation I discussed in several documents: link01link02link03. In a standard worldwide production sharing contract, the state allows the recovery of operating and capital cost. Returning to the fatherhood analogy, in the world, parents usually cover reasonably the costs of their children.

The new Bolivian Constitution, for its part, insinuates that parents shouldn’t cover their children’s  costs, what they should do is give them an allowance, for this reason the Constitution has the following text: "YPFB [Bolivian oil company] is authorized to sign contracts under the service regime, with public, mixed or private companies, Bolivian or foreign, so these companies, in their name and on their behalf, perform certain activities in the production chain in exchange of a fee or service payment. This "Remuneration or service payment" doesn’t necessarily imply cover costs. I must add that at the international level in a standard service contracts, the State gives a compensation to the company and this company should manage operations in order to cover (or not) operation and capital costs.

The first regulation of costs (year 2008) refers to Operating Contracts (where parents cover the children costs), but the new regulatory regulation of costs creates the figure of Oil Services Contract, where it’s not clear State's obligation to cover these costs. That is to say, under the Oil Services Contract figure there is apparently no obligation to recognize the costs, because it refers the new Constitution.

The new regulation also has other topics that are of great interest: 1) the existence of price limits for costs; 2) the ANH (regulatory body of hydrocarbons in Bolivia) is responsible for determining and approving such limits; 3) non-recognition... you read well "no recognition" of environmental liabilities prior to the signing of contracts (Article 16), by the way, this was already established in previous regulation; 4) tax issues for investments transfers (Article 13); 5) it seems to me that regulation #24051 was amended (article 15); 6) What is meant by "amount" in Article 20? Each of them is important and may be the subject of another post.

I wanted to discuss contractual issues because this new rule raised new doubts (once again) with State-Operators relationship. We are not only talking about setting limits to costs, now we introduce disturbances in the type of contractual relationship between Bolivian State and Operators. All this, once again, convinces me the need to provide a comprehensive solution to all the problems of the sector through a unique, clear, simple and consistent legal framework. Using a simple analogy, it’s time to buy a new tire... the one we have is already "very old".

Well my friends, as always was a pleasure share these ideas with you, for those interested in see this discussion you can visit my Youtube channel, see the following link. Only 10 days remain to return to my beloved Bolivia and seek new for new horizons and adventures.

Mauricio Medinaceli Monrroy

Kabul, September 13th 2017


 The results of the so-called "nationalization" of hydrocarbons in Bolivia with official data 

Today, I feel happy. I imagine that this is the kind of happiness of the detective who solves a case, of the student who receives a good grade, of the theoretician who proves a theory. Today I’m happy because YPFB (oil state company) finally published information that I’ve been looking for a long time... since 2007. This information refers to the fiscal results of the so-called "nationalization" of hydrocarbons in Bolivia.

In many times that I tried to approximate this number collecting information from many different sources. I tried to give consistency to the data, crossing fingers to minimize the error. Some examples you will find in the following linkslink01link02link03link04 and link05.

The issue is that YPFB published, officially, the data in question and now with complete security I can confirm my suspicions of past years. The so-called "nationalization" of hydrocarbons increased the government take (over wellhead revenues) from 50% (already existing with the Hydrocarbons Law 3058) to 64%. For my friends from other countries, let me explain you that in Bolivian the Government Take is measured on the gross revenues at wellhead, “we don’t like” the right and common approach of GT measured over the net benefit of the operation.

As you can see in the following table, the so-called "nationalization" process ranged from 11% (excluding 2007) to 17%; on average (the last column in gray) was 14%. If you add this number to the royalties and the current production tax (IDH) the total GT is 66% (don’t forget the measure is over gross revenues at wellhead) leaving 34% as gross retribution for the operator (that includes recoverable costs), see the following figure. Now, I hope, the reason of my happiness is more clear, my previous suspicions were not far from the reality, see link01link02link03link04 and link05.



However, the information provided by YPFB doesn’t end here, according to YPFB, from the green part (in the "cake" I present) it’s necessary to deduct the patents and upstream taxes, that’s why I used the words "gross retribution". The payment of patents is minor, so we can put it aside. What strikes me are the amounts paid by "Upstream Taxes", in many cases are greater than the resources obtained from the so-called "nationalization" process. I have my doubts about the items considered here. Do they include taxes paid by YPFB? Do they include taxes paid by service companies? Do they include taxes paid by companies that only carried out exploratory work? Therefore, and until the National Tax Service don’t officially publish this information the doubt will still be around my head.

Now, as my mother would say, "nobility obliges", I must congratulate the technical people of YPFB for the publication. If you allow me a couple of suggestions for the future: 1) publish this information by field and; 2) perform this exercise, at least, on annual basis. On the other hand, it’s the turn of the National Tax Service, it’s in their hands to publish the taxes not only paid by the upstream, but also, by the other segments of the chain, thus, on solid bases we can talk about the future of the sector.

As you maybe already know, I opened my channel in Youtube channel, so I invite you to take a tour and watch video1video2 and video3. In these videos I discuss the recent increase in the natural gas prices applied to the industrial sector in Bolivia.

A pleasure to have shared with you these data and ideas, there are only 17 days remaining to go back to my beloved country. I finished this contract and now I’ll try to look for opportunities at home next to my family and especially my dear Santi, who doesn’t stop to amaze me with this types of conversations:

After leave some food  on the street for some street dogs, Santi told me: "Dad, it's also time for us to think about people."

A hug my dear friends

Mauricio Medinaceli Monrroy

Kabul, September 7th  2017


March 8th 

Thanks to my dear friend Cecilia Ayala, I had the fortune to share my economic ideas across many countries of South America. I was in charge of Microeconomics and all the training was called "Economic Tools for Environment Conservation" with the always important support of CSF. Thanks to this experience I met excellent people whom work with the environment, from that time I have very good friends. Now this experience it's been reproduced with UNAM and another group of good friends, Lalo, Eglé and Angela. 

In Ecuador, one of the participants told me a very interesting story related to the Huaorani people. In short, due to the oil activity in the region where these people live, the Huaorani suddenly began receiving large amounts of money from the operating companies (I will not enter into the discussion of how and why) in the region. 

Apparently the men whom initially handled these resources didn't do it in the best way... surronding quickly to new vices. In such a situation, were the Huaorani women whom took control of these funds (because they didn't want to expose their children to that vices) and began a textile enterprise internationally recognized today and with vey good expectations. I tried to find bibliographical references that confirm or not this story, I found 2, please have a look: click1, click2. 

At this time when the word "Congratulations" appears politically incorrect, I wanted to share with you a story that points (or highlights) a virtue (of the many) that I find in women. People who never cease to build a better world. 

Thank you for everything you do for us all.


 Kabul, March 8, 2017


 Who is who in the Gas Exporting Countries Forum?



Exports of natural gas from Bolivia to Argentina: This is how a cycle looks like

After four months since I wrote something about the hydrocarbons sector (and by they way it was vetoed) I don’t want to miss these holidays to share something with you.

The two major export markets for Bolivian natural gas are Brazil and Argentina, the first one agreed during the last thirty years and the second one activated in 2004 and consolidated later. The fact is that the people (like me) whom dedicate our time to study this sector, from time to time, try to elucidate a reality that many times is out of our hands.

Well, this time I want to present some realities Bolivian natural gas exports to Argentine. For that I used ... Oh, how ironic! Data published by the Ministry of Mining and Energy of our brother country where information is published until November 2016... something that deserves my most sincere congratulations. There is no doubt that the agile and transparent information reflects that there is nothing to hide.

Below there’s a graph with the monthly value of natural gas exports from Bolivia to Argentina… now, maybe, the reference to the title is a bit more clear: This is how a cycle looks like. In 2010, the monthly value was around US$ 50 million, by 2016 was slightly higher.


In this sense, the following question then arise: What factors explain this cycle? Let's go by parts then. The following graph shows the export volume (expressed in millions of cubic meters per day) during the same period of analysis. It’s clear that the cycle’s "ascending" part is because, among other things, an increase in the volume; after this climbing part this variable stabilized at 15 million cmd.


On the other hand, the "descending" part of the cycle is seen in the following figure. In it, I present the unit value of natural gas imports from the Argentine perspective, under normal conditions (which certainly exist), this behavior should also be observed in the unit value of exports from the Bolivian perspective. Note, dear reader, how the prices of the years 2015 and 2016 were well below the "lived" in the past.


When international oil prices started their declining phase (and so did the Bolivian gas export prices), there were few voices (in Bolivia’s Government) explaining to the population that such decrease would be offset by an increase in the natural gas production. The data... these stubborn data, tell us that this offset didn’t happen.

Last week we were talking with Santi (my 8 years old son) about the life problems and how to get out of them, while he was trying to tied his shoe’s laces he told me those captivating phrases that children say, without even realizing them: "Dad, everything is a question of will".

An excellent 2017 for all of us, that those pains that sometimes bitter our hearts can be offset with a clear positive attitude towards life, so the cycles... that we live from time to time be more bearable.

Mauricio Medinaceli Monrroy

La Paz, December 30th. 2016.


Natural Gas Sales from Bolivia to Argentina

(August 5th. 2016)

According the Ministry of Energy and Mining of Argentina (see link) the average monthly natural gas import volumes from Bolivia to Argentina are below contractual agreements, see the black and blue lines of the figure. This situation necessarily involves the activation of contractual clauses between the two countries.


LPG exports from Bolivia

(August 3th. 2016)

According the Natitonal Institute of Statistics in Bolivia (and La Razon newspaper) during 2016 LPG export volumes "nearly tripled" (see link), but the unit export value (say the price) declined by just over 37%. For a national equivalent, in 2015 LPG "export price" was (approximate) Bs 30.4 the balloon of 10 kg and in 2016 this "price" dropped to Bs 19.1. Naturally this decrease occurs because international oil prices fell in recent months.

How can we compare LPG exports value with natural gas exports? Have a look of the data: natural gas exports until June 2016 = 3,036 million US$, LPG exports = 8 million US$.


Medinaceli Mauricio Monroy



    In the Blog section I invite you to read: "The future of Bolivian natural gas exports to Brazil"


    Visitors Counters


    Follow us on:
    Phones: (591 2) 2751364 / (591) 72050547
    Address: Calle 1, Nº 305, Alto Següencoma, La Paz - Bolivia.