
09 Nov Was the Contract with Argentina Fulfilled, or Did Bolivia Run Out of Natural Gas?
Recently, I’ve been hearing the phrase, “the gas sales contract with Argentina was fulfilled,” implying that the contractual term had concluded and that the fact that Bolivia’s didn’t deliver natural gas volumes to Argentina was a contractual issue and, not a result of dwindling gas production capacity. But what’s the real story?
A good place to start is by examining the contract between YPFB and ENARSA, signed in March 2010, particularly Annex D, which I’ll share here:
I’ve highlighted the last rows of the table in red to emphasize that the initial agreement committed Bolivia to supply 27.7 million cubic meters per day (MM mcd) until 2026—just two years from now.
When this contract was signed, I remember the prevailing question among Bolivia’s hydrocarbon professionals: Did our country have enough reserves to supply Brazil, our domestic market, and Argentina? The reality showed that we did not. Numerous addenda were signed with both Brazil and Argentina to reduce delivery volumes, as Bolivia’s productive capacity has steadily diminished.
If we had implemented prudent hydrocarbon policies, those 27.7 MM mcd in the table could have represented an additional USD 3 billion in export revenue for Bolivia—a sum we need now more than ever.
Why did many of us see this coming? Because the gap between what we committed to supply to Argentina (according to the initial contract) and what we actually delivered has steadily grown. Look at the following figure:
The red line shows the volume sent, while the blue line represents the agreed volumes. It’s clear that, since around 2014, this gap has only widened.
The hydrocarbon policies Bolivia adopted over 15 years ago are now showing their consequences.
Whenever I think about Bolivia’s hydrocarbon sector, one story comes to mind: “The Grasshopper and the Ant.” We enjoyed the harvest, but we neglected the sowing.
S. Mauricio Medinaceli M.
27 de septiembre de 2024
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