About | Contact | Mongabay on Facebook | Mongabay on Twitter | Subscribe

Bolivia-Petroleum and Natural Gas

MONGABAY.COM
Mongabay.com seeks to raise interest in and appreciation of wild lands and wildlife, while examining the impact of emerging trends in climate, technology, economics, and finance on conservation and development (more)

WEEKLY NEWSLETTER

Bolivia Index

Figure 9. Primary Petroleum, Natural gas, and Minerals, Activities, 1988

Source: Based on information from Orlando D. Martino, Mineral Industries of Latin America, Washington, 1988, 22.

Petroleum had been known to exist in Bolivia since the colonial period, but serious exploration did not begin until 1916. In that year, foreign firms probed for oil, marking the start of a long and sometimes bitter relationship between foreign oil companies and the Bolivian government. The government nationalized the oil industry from 1916 to 1920, denationalized it from 1920 to 1937, and nationalized it again in 1937 under the control of YPFB, where it remained in 1989. A revision of the country's petroleum code in 1952 allowed foreign companies to drill for Bolivian oil. Nevertheless, the only successful company--Bolivian Gulf, a subsidiary of Gulf Oil--was nationalized in 1969 in an acrimonious dispute with the government. Two foreign firms, Occidental International and Tesoro Petroleum, held service contracts with YPFB in the late 1980s.

Oil production peaked in the early 1970s but declined throughout the rest of the decade and into the 1980s (see table 7, Appendix). Production dropped from 47,000 barrels per day (bpd) in 1973 to only 21,000 bpd in 1988, the result of price fluctuations, obsolete machinery, minimal exploration, YPFB mismanagement, and declining reserves. As part of the NPE, the government restructured YPFB into three autonomous subsidiaries in 1985 and reduced its payroll by one-third. One of YPFB's major goals was to accelerate oil exploration and improve its inadequate reserves-to-production ratio. Proven reserves were estimated at 158 million barrels in 1988. In order to augment reserves, most economists believed that Bolivia would need to rely more on foreign oil companies for exploration.

Oil exploration in Bolivia in the 1980s remained highly regulated by the government, but revisions in the country's petroleum code were expected after 1988. For exploration purposes, the country was divided into four regions, three of which were higher risk areas; in the fourth region, where reserves were unknown, YPFB had exclusive rights for exploration. The YPFB's region was located in southeastern Bolivia, and the other regions covered the rest of the country's mostly unexplored subsoil. YPFB, however, also issued contracts for foreign oil companies to explore portions of its own select region and others. In September 1988, Occidental signed a thirty-year contract with YPFB for exploration and production in a 2.5- million-hectare area, encompassing the Madre de Dios and Lapachos regions of La Paz, Beni, and Pando departments. YPFB also managed the country's oil refineries, which had a 74,000 bpd capacity, or three times more than output. The refineries, located in Santa Cruz, Cochabamba, and Chuquisaca departments, produced a diverse range of petroleum products, such as lubricating oils, gasoline, naphthas, jet fuels, diesel, solvents, and ether (see fig. 9).

Seventy-five percent of Bolivia's oil was drilled in four Santa Cruz oil fields--La Peña, Monteagudo, Caranda, and Camiri--with the balance provided by fields in the departments of Chuquisaca and Tarija. A major new field, Vuelta Grande, was scheduled to begin production in 1989, providing upwards of 5,500 bpd. Most oil fields had large reserves of associated natural gas.

Natural gas reserves in 1988 were estimated at 33 billion cubic meters. The primary gas fields were concentrated in Santa Cruz and Tarija departments, with additional fields scattered in various other departments. In 1988 natural gas production equaled roughly 13 million cubic meters a day, almost half of which was reinjected. Sixty-five percent of all gas production originated from four large gas fields in Santa Cruz: Río Grande, Colpa, Vuelta Grande, and Caranda. In the late 1980s, YPFB exported close to 90 percent of the country's gas, about 6 million cubic meters a day, to Argentina via an 847-kilometer gas pipeline that was constructed in 1972, extending from Santa Cruz to the border town of Yacuiba. In total, 4,346 kilometers of gas and oil pipelines of varying sizes extended through the country in 1988. Domestic gas use, equivalent to about 10 percent of production in 1988, was expected to increase when a gas pipeline connecting the highlands to the lowlands opened in 1988 and as electricitygenerating plants increasingly turned to gas as their source of power.

The contentious nature of negotiations between Bolivia and Argentina for purchasing natural gas in the mid-1980s demonstrated the subsector's dependence on foreign markets. Disagreements revolved around the market rate Argentina paid for Bolivian gas, the proportion of currency and in-kind payments, and Bolivia's failure to make its debt payments to Argentina, its largest bilateral creditor. Following a two-year period that nearly bankrupted Bolivia's treasury, the two nations signed a comprehensive agreement in 1987. Under the accord, Bolivia agreed to cut its gas price by 20 percent and peg it to market levels. Argentina resumed its gas payments to Bolivia with 80 percent of its payment in convertible currencies and 20 percent in goods, such as wheat. In the late 1980s, however, the status of the agreement beyond 1992 remained unclear.

After more than ten years of negotiations, in 1988 Bolivia and Brazil signed a preliminary agreement that was to pave the way for exports of natural gas, urea, and polyethylene to Brazil in the early to mid-1990s. Although the details were still being finalized in 1989, the pact was slated to include a 600-kilometer gas pipeline from Santa Cruz to the border town of Puerto Suárez and then to São Paulo; 3 million cubic meters of gas exports a day; the manufacturing of 200,000 tons a year of urea fertilizers and 100,000 tons of polyethylene, used for packaging and tubing; and a series of other thermal and hydroelectric projects. If the supply of gas did not reach Brazil by 1992, however, and the Argentine agreement was not renewed, Bolivia faced a potentially untenable cash-flow situation by 1993.

Data as of December 1989

Background		Bolivia, named after independence fighter Simon BOLIVAR, broke away from Spanish rule in 1825; much of its subsequent history has consisted of a series of nearly 200 coups and countercoups. Democratic civilian rule was established in 1982, but leaders have faced difficult problems of deep-seated poverty, social unrest, and illegal drug production. In December 2005, Bolivians elected Movement Toward Socialism leader Evo MORALES president - by the widest margin of any leader since the restoration of civilian rule in 1982 - after he ran on a promise to change the country's traditional political class and empower the nation's poor, indigenous majority. However, since taking office, his controversial strategies have exacerbated racial and economic tensions between the Amerindian populations of the Andean west and the non-indigenous communities of the eastern lowlands. In December 2009, President MORALES easily won reelection, and his party took control of the legislative branch of the government, which will allow him to continue his process of change.
Location		Central South America, southwest of Brazil
Area(sq km)		total: 1,098,581 sq km land: 1,083,301 sq km water: 15,280 sq km
Geographic coordinates		17 00 S, 65 00 W
Land boundaries(km)		total: 6,940 km border countries: Argentina 832 km, Brazil 3,423 km, Chile 860 km, Paraguay 750 km, Peru 1,075 km
Coastline(km)		0 km (landlocked)
Climate		varies with altitude; humid and tropical to cold and semiarid
Elevation extremes(m)		lowest point: Rio Paraguay 90 m highest point: Nevado Sajama 6,542 m
Natural resources		tin, natural gas, petroleum, zinc, tungsten, antimony, silver, iron, lead, gold, timber, hydropower
Land use(%)		arable land: 2.78% permanent crops: 0.19% other: 97.03% (2005)
Irrigated land(sq km)		1,320 sq km (2003)
Total renewable water resources(cu km)		622.5 cu km (2000)
Freshwater withdrawal (domestic/industrial/agricultural)		total: 1.44 cu km/yr (13%/7%/81%) per capita: 157 cu m/yr (2000)
Natural hazards		flooding in the northeast (March-April)
Environment - current issues		the clearing of land for agricultural purposes and the international demand for tropical timber are contributing to deforestation; soil erosion from overgrazing and poor cultivation methods (including slash-and-burn agriculture); desertification; loss of biodiversity; industrial pollution of water supplies used for drinking and irrigation
Environment - international agreements		party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship Pollution, Tropical Timber 83, Tropical Timber 94, Wetlands signed, but not ratified: Environmental Modification, Marine Life Conservation
Geography - note		landlocked; shares control of Lago Titicaca, world's highest navigable lake (elevation 3,805 m), with Peru
Population		9,775,246 (July 2009 est.)
Age structure(%)		0-14 years: 35.5% (male 1,767,310/female 1,701,744) 15-64 years: 60% (male 2,877,605/female 2,992,043) 65 years and over: 4.5% (male 193,196/female 243,348) (2009 est.)
Median age(years)		total: 21.9 years male: 21.3 years female: 22.6 years (2009 est.)
Population growth rate(%)		1.772% (2009 est.)
Birth rate(births/1,000 population)		25.82 births/1,000 population (2009 est.)
Death rate(deaths/1,000 population)		7.05 deaths/1,000 population (July 2009 est.)
Net migration rate(migrant(s)/1,000 population)		-1.05 migrant(s)/1,000 population (2009 est.)
Urbanization(%)		urban population: 66% of total population (2008) rate of urbanization: 2.5% annual rate of change (2005-10 est.)
Sex ratio(male(s)/female)		at birth: 1.05 male(s)/female under 15 years: 1.04 male(s)/female 15-64 years: 0.96 male(s)/female 65 years and over: 0.79 male(s)/female total population: 0.98 male(s)/female (2009 est.)
Infant mortality rate(deaths/1,000 live births)		total: 44.66 deaths/1,000 live births male: 48.56 deaths/1,000 live births female: 40.57 deaths/1,000 live births (2009 est.)
Life expectancy at birth(years)		total population: 66.89 years male: 64.2 years female: 69.72 years (2009 est.)
Total fertility rate(children born/woman)		3.17 children born/woman (2009 est.)
Nationality		noun: Bolivian(s) adjective: Bolivian
Ethnic groups(%)		Quechua 30%, mestizo (mixed white and Amerindian ancestry) 30%, Aymara 25%, white 15%
Religions(%)		Roman Catholic 95%, Protestant (Evangelical Methodist) 5%
Languages(%)		Spanish 60.7% (official), Quechua 21.2% (official), Aymara 14.6% (official), foreign languages 2.4%, other 1.2% (2001 census)
Country name		conventional long form: Plurinational State of Bolivia conventional short form: Bolivia local long form: Estado Plurinacional de Bolivia local short form: Bolivia
Government type		republic; note - the new constitution defines Bolivia as a "Social Unitarian State"
Capital		name: La Paz (administrative capital) geographic coordinates: 16 30 S, 68 09 W time difference: UTC-4 (1 hour ahead of Washington, DC during Standard Time) note: Sucre (constitutional capital)
Administrative divisions		9 departments (departamentos, singular - departamento); Beni, Chuquisaca, Cochabamba, La Paz, Oruro, Pando, Potosi, Santa Cruz, Tarija
Constitution		7-Feb-09
Legal system		based on Spanish law and Napoleonic Code; has not accepted compulsory ICJ jurisdiction; the 2009 Constitution incorporates indigenous community justice into Bolivia's judicial system
Suffrage		18 years of age, universal and compulsory (married); 21 years of age, universal and compulsory (single)
Executive branch		chief of state: President Juan Evo MORALES Ayma (since 22 January 2006); Vice President Alvaro GARCIA Linera (since 22 January 2006); note - the president is both chief of state and head of government head of government: President Juan Evo MORALES Ayma (since 22 January 2006); Vice President Alvaro GARCIA Linera (since 22 January 2006) cabinet: Cabinet appointed by the president elections: president and vice president elected on the same ticket by popular vote for a single five-year term; election last held 6 December 2009 (next to be held in 2014); note - per the new constitution, presidents can serve for a total of two consecutive terms election results: Juan Evo MORALES Ayma elected president; percent of vote - Juan Evo MORALES Ayma 64%; Manfred REYES VILLA 26%; Samuel DORIA MEDINA Arana 6%; Rene JOAQUINO 2%; other 2%
Legislative branch		bicameral Plurinational Legislative Assembly or Asamblea Legislativa Plurinacional consists of Chamber of Senators or Camara de Senadores (36 seats; members are elected by proportional representation from party lists to serve five-year terms) and Chamber of Deputies or Camara de Diputados (130 seats; 76 members are directly elected from their districts [7 or 8 of these are chosen from indigenous districts] and 54 are elected by proportional representation from party lists to serve five-year terms). elections: Chamber of Senators and Chamber of Deputies - last held 6 December 2009 (next to be held in 2015) election results: Chamber of Senators - percent of vote by party - NA; seats by party - MAS 26, PPB-CN 10; Chamber of Deputies - percent of vote by party - NA; seats by party - MAS 89, PPB-CN 36, UN 3, AS 2
Judicial branch		Supreme Court or Corte Suprema (judges elected by popular vote from list of candidates pre-selected by Assembly for six-year terms); District Courts (one in each department); Plurinational Constitutional Court (five primary or titulares and five alternate or suplente magistrates elected by popular vote from list of candidates pre-selected by Assembly for six-year terms; to rule on constitutional issues); Plurinational Electoral Organ (seven members elected by the Assembly and the president; one member must be of indigenous origin to six-year terms); Agro-Environmental Court (judges elected by popular vote from list of candidates pre-selected by Assembly for six-year terms; to run on agro-environmental issues); provincial and local courts (to try minor cases)
Political pressure groups and leaders		Bolivian Workers Central or COR; Federation of Neighborhood Councils of El Alto or FEJUVE; Landless Movement or MST; National Coordinator for Change or CONALCAM; Sole Confederation of Campesino Workers of Bolivia or CSUTCB other: Cocalero groups; indigenous organizations (including Confederation of Indigenous Peoples of Eastern Bolivia or CIDOB and National Council of Ayullus and Markas of Quollasuyu or CONAMAQ); labor unions (including the Central Bolivian Workers' Union or COB and Cooperative Miners Federation or FENCOMIN)
International organization participation		CAN, FAO, G-77, IADB, IAEA, IBRD, ICAO, ICC, ICCt, ICRM, IDA, IFAD, IFC, IFRCS, ILO, IMF, IMO, Interpol, IOC, IOM, IPU, ISO (correspondent), ITSO, ITU, LAES, LAIA, Mercosur (associate), MIGA, MINUSTAH, MONUC, NAM, OAS, OPANAL, OPCW, PCA, RG, UN, UNASUR, UNCTAD, UNESCO, UNFICYP, UNIDO, Union Latina, UNMIL, UNMIS, UNOCI, UNWTO, UPU, WCL, WCO, WFTU, WHO, WIPO, WMO, WTO
Flag description		three equal horizontal bands of red (top), yellow, and green with the coat of arms centered on the yellow band note: similar to the flag of Ghana, which has a large black five-pointed star centered in the yellow band; in 2009, a presidential decree made it mandatory for a so-called wiphala - a square, multi-colored flag representing the country's indigenous peoples - to be used alongside the traditional flag
Economy - overview		Bolivia is one of the poorest and least developed countries in Latin America. Following a disastrous economic crisis during the early 1980s, reforms spurred private investment, stimulated economic growth, and cut poverty rates in the 1990s. The period 2003-05 was characterized by political instability, racial tensions, and violent protests against plans - subsequently abandoned - to export Bolivia's newly discovered natural gas reserves to large northern hemisphere markets. In 2005, the government passed a controversial hydrocarbons law that imposed significantly higher royalties and required foreign firms then operating under risk-sharing contracts to surrender all production to the state energy company. In early 2008, higher earnings for mining and hydrocarbons exports pushed the current account surplus to 9.4% of GDP and the government's higher tax take produced a fiscal surplus after years of large deficits. Private investment as a share of GDP, however, remains among the lowest in Latin America, and inflation remained at double-digit levels in 2008. The decline in commodity prices in late 2008, the lack of foreign investment in the mining and hydrocarbon sectors, and the suspension of trade benefits with the United States will pose challenges for the Bolivian economy in 2009.
GDP (purchasing power parity)		$43.38 billion (2008 est.) $40.88 billion (2007 est.) $39.08 billion (2006 est.) note: data are in 2008 US dollars
GDP (official exchange rate)		$16.6 billion (2008 est.)
GDP - real growth rate(%)		6.1% (2008 est.) 4.6% (2007 est.) 4.8% (2006 est.)
GDP - per capita (PPP)		$4,500 (2008 est.) $4,300 (2007 est.) $4,200 (2006 est.) note: data are in 2008 US dollars
GDP - composition by sector(%)		agriculture: 11.3% industry: 36.9% services: 51.8% (2008 est.)
Labor force		4.454 million (2008 est.)
Labor force - by occupation(%)		agriculture: 40% industry: 17% services: 43% (2006 est.)
Unemployment rate(%)		7.5% (2008 est.) 7.5% (2007 est.) note: data are for urban areas; widespread underemployment
Population below poverty line(%)		60% (2006 est.)
Household income or consumption by percentage share(%)		lowest 10%: 0.5% highest 10%: 44.1% (2005)
Distribution of family income - Gini index		59.2 (2006) 44.7 (1999)
Investment (gross fixed)(% of GDP)		18% of GDP (2008 est.)
Budget		revenues: $8.039 billion expenditures: $7.5 billion (2008 est.)
Inflation rate (consumer prices)(%)		14% (2008 est.) 8.7% (2007 est.)
Stock of money		$3.998 billion (31 December 2008) $3.032 billion (31 December 2007)
Stock of quasi money		$6.339 billion (31 December 2008) $4.729 billion (31 December 2007)
Stock of domestic credit		$5.433 billion (31 December 2008) $4.759 billion (31 December 2007)
Market value of publicly traded shares		$NA (31 December 2008) $2.263 billion (31 December 2007) $2.223 billion (31 December 2006)
Economic aid - recipient		$582.9 million (2005 est.)
Public debt(% of GDP)		45.2% of GDP (2008 est.) 46.3% of GDP (2007 est.)
Agriculture - products		soybeans, coffee, coca, cotton, corn, sugarcane, rice, potatoes; timber
Industries		mining, smelting, petroleum, food and beverages, tobacco, handicrafts, clothing
Industrial production growth rate(%)		10.6% (2008 est.)
Current account balance		$2.015 billion (2008 est.) $1.984 billion (2007 est.)
Exports		$6.448 billion (2008 est.) $4.49 billion (2007 est.)
Exports - commodities(%)		natural gas, soybeans and soy products, crude petroleum, zinc ore, tin
Exports - partners(%)		Brazil 60.1%, US 8.3%, Japan 4.1% (2008)
Imports		$4.641 billion (2008 est.) $3.24 billion (2007 est.)
Imports - commodities(%)		petroleum products, plastics, paper, aircraft and aircraft parts, prepared foods, automobiles, insecticides, soybeans
Imports - partners(%)		Brazil 26.7%, Argentina 16.3%, US 10.5%, Chile 9.5%, Peru 7.1%, China 4.8% (2008)
Reserves of foreign exchange and gold		$7.722 billion (31 December 2008 est.) $5.318 billion (31 December 2007 est.)
Debt - external		$5.931 billion (31 December 2008) $5.385 billion (31 December 2007)
Stock of direct foreign investment - at home		$5.998 billion (31 December 2008)
Stock of direct foreign investment - abroad		$NA
Exchange rates		bolivianos (BOB) per US dollar - 7.253 (2008 est.), 7.8616 (2007), 8.0159 (2006), 8.0661 (2005), 7.9363 (2004)
Currency (code)		boliviano (BOB)
Telephones - main lines in use		690,000 (2008)
Telephones - mobile cellular		4.83 million (2008)
Telephone system		general assessment: privatization begun in 1995; reliability has steadily improved; new subscribers face bureaucratic difficulties; most telephones are concentrated in La Paz and other cities; mobile-cellular telephone use expanding rapidly; fixed-line teledensity of 7 per 100 persons; mobile-cellular telephone density slighly exceeds 50 per 100 persons domestic: primary trunk system, which is being expanded, employs digital microwave radio relay; some areas are served by fiber-optic cable; mobile cellular systems are being expanded international: country code - 591; satellite earth station - 1 Intelsat (Atlantic Ocean) (2008)
Internet country code		.bo
Internet users		1 million (2008)
Airports		952 (2009)
Pipelines(km)		gas 4,883 km; liquid petroleum gas 47 km; oil 2,475 km; refined products 1,589 km (2008)
Roadways(km)		total: 62,479 km paved: 3,749 km unpaved: 58,730 km (2004)
Ports and terminals		Puerto Aguirre (inland port on the Paraguay/Parana waterway at the Bolivia/Brazil border); Bolivia has free port privileges in maritime ports in Argentina, Brazil, Chile, and Paraguay
Military branches		Bolivian Armed Forces: Bolivian Army (Ejercito Boliviano, EB), Bolivian Navy (Fuerza Naval Boliviana, FNB; includes marines), Bolivian Air Force (Fuerza Aerea Boliviana, FAB) (2009)
Military service age and obligation(years of age)		18-49 years of age for 12-month compulsory military service; when annual number of volunteers falls short of goal, compulsory recruitment is effected, including conscription of boys as young as 14; 15-19 years of age for voluntary premilitary service, provides exemption from further military service (2009)
Manpower available for military service		males age 16-49: 2,295,746 females age 16-49: 2,366,828 (2008 est.)
Manpower fit for military service		males age 16-49: 1,666,697 females age 16-49: 1,906,396 (2009 est.)
Manpower reaching militarily significant age annually		male: 108,304 female: 104,882 (2009 est.)
Military expenditures(% of GDP)		1.9% of GDP (2006)
Disputes - international		Chile and Peru rebuff Bolivia's reactivated claim to restore the Atacama corridor, ceded to Chile in 1884, but Chile offers instead unrestricted but not sovereign maritime access through Chile for Bolivian natural gas and other commodities; an accord placed the long-disputed Isla Suarez/Ilha de Guajara-Mirim, a fluvial island on the Rio Mamore, under Bolivian administration in 1958, but sovereignty remains in dispute
Electricity - production(kWh)		5.495 billion kWh (2007 est.)
Electricity - production by source(%)		fossil fuel: 44.4% hydro: 54% nuclear: 0% other: 1.5% (2001)
Electricity - consumption(kWh)		4.665 billion kWh (2007 est.)
Electricity - exports(kWh)		0 kWh (2008 est.)
Electricity - imports(kWh)		0 kWh (2008 est.)
Oil - production(bbl/day)		51,360 bbl/day (2008 est.)
Oil - consumption(bbl/day)		60,000 bbl/day (2008 est.)
Oil - exports(bbl/day)		10,950 bbl/day (2007 est.)
Oil - imports(bbl/day)		6,172 bbl/day (2007 est.)
Oil - proved reserves(bbl)		465 million bbl (1 January 2009 est.)
Natural gas - production(cu m)		14.2 billion cu m (2008 est.)
Natural gas - consumption(cu m)		2.41 billion cu m (2008 est.)
Natural gas - exports(cu m)		11.79 billion cu m (2008)
Natural gas - proved reserves(cu m)		750.4 billion cu m (1 January 2009 est.)
HIV/AIDS - adult prevalence rate(%)		0.2% (2007 est.)
HIV/AIDS - people living with HIV/AIDS		8,100 (2007 est.)
HIV/AIDS - deaths		fewer than 500 (2007 est.)
Major infectious diseases		degree of risk: high food or waterborne diseases: bacterial diarrhea, hepatitis A, and typhoid fever vectorborne diseases: dengue fever, malaria, and yellow fever water contact disease: leptospirosis (2009)
Literacy(%)		definition: age 15 and over can read and write total population: 86.7% male: 93.1% female: 80.7% (2001 census)
Education expenditures(% of GDP)		6.4% of GDP (2003)