03 Mar 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