A Probing Look at Bolivia's Energy Investment Opportunities

If global analogues such as the Permian Basin or West Africa are any indication, Bolivia’s certified reserves will undoubtedly increase dramatically with a better understanding of the geology and with the application of new technologies.

Bold New Exploration in Frontiers; Revitalization in Mature Fields
I recently had the opportunity to participate in the First International Forum for Gas, Petrochemicals, and Green Fuels, August 28 – 31, in Santa Cruz de la Sierra, Bolivia.

Bolivia Hydrocarbon Minister Luis Alberto Sanchez in press conference about reserves

It was an international event organized by the Ministry of Hydrocarbons of Bolivia and also the national oil company, YPFB, as well as the Chamber of Oil and Gas. https://www.forogas.bo/

Foro Internacional del Gas, Petroquimica, y Combustibles Verdes / 28 - 31 Ago 2018 / Bolivia

A few months earlier, the American Association of Petroleum Geologists (AAPG) hosted its first ever Geosciences Technology Workshop in Bolivia. It took place June 6 – 8 in Santa Cruz. Some of the presentations are available here: http://www.searchanddiscovery.com/specialcollections/lar.htm

AAPG GTW June 2018

The August International Forum featured opportunities for investment in exploration and production of natural gas, infrastructure and marketing of gas, petrochemical production, and biofuels. http://www.energypress.com.bo/sugieren-una-sinergia-entre-ypfb-y-operadoras/

I was impressed by the opportunities to drill for new gas reserves in the southern part of Bolivia, to improve production in the mature fields, and to invest in gas pipelines.  I was also impressed with the biofuel (biodiesel and sugar cane-derived ethanol). LifeEdge inteview:

LifeEdge Interview, Chatting about Bolivia

The recent rise in the price of oil makes investment more attractive.  Here’s an article:http://www.lostiempos.com/actualidad/economia/20180903/precio-del-petroleo-es-oportunidad-mejorar-exploracion-bolivia

Transportation Hub in the Heart of Bolivia
Bolivia’s goal is to become a natural gas hub for all of South America. This is a very interesting plan, which takes advantage of the twin blessings of Bolivia: mineral resources and central location.

By having pipelines crisscrossing the country, it’s possible to have natural gas travel from fields in Bolivia to major markets, which include Brazil, Argentina, Chile, and Peru.  It’s also possible to facilitate the transport of gas from fields in Argentina to Peru, or from Peru to Brazil, etc.

Logistically, becoming a gas pipeline hub makes sense.

There are a few challenges, however:
1.  Pipelines need to stay full of gas.  Is there sufficient supply? Are there enough pipelines? Enough gas?  Enough pressure? There is for now, but the future will require more.

2.  Political stability is vital. Bolivia has a huge advantage in this area. For example, Ecuador is now experiencing problems in its petroleum-producing provinces.  Peru has become more stable than in the past, but there are still some outliers of violence. In Colombia, insurgents murdered three young professional petroleum geologists in September who were working in the Antioquia province. That said, there are some remaining issues with Chile (see article).

3.  Economic stability is critical.  If there is hyperinflation, there are always problems with day to day operations, as well obtaining spare parts, due to liquidity issues.

4.  Nationalization factor:  A plan to decrease the royalties (or taxes) paid to the government act as a tremendous incentive. If the government has (or states that it has plans to) nationalize foreign operations or companies, capital (as well as expertise) tends to flee the country.

5.  Transparency factor:  Governments that maintain transparency in the way that they attract investment, award contracts and concessions, are very likely to maintain stable investments.

6.  Wall of tariffs:  The world’s great empires tended to grow into empires through trade. Yet, paradoxically, when they feel threatened, they tend to engage in protectionism. Walls and trade barriers can be digital as well as physical and can apply to just about everything.

7.  Streamlining bureaucracy: Bolivia, like Peru, has done a great deal to streamline the process of doing business in Bolivia by reducing the number of permits needed.  It’s a good idea. After all, if you need 50 permits in Country X, while Country Y requires 5, where do you think people will likely do business? Time is money. Delays are painful, and, where there are tedious documents to be filled out and submitted through a bottleneck, there are often “facilitators.” So, requiring too many permit may trigger corruption.

8.  Natural gas can be used as feedstock for urea and other fertilizers. Special transportation is planned for urea, which will have a positive influence on the extensive agricultural sector near Santa Cruz.

9.  Natural gas can be feedstock for petrochemicals; specifically for low-density polyethylene (used for plastic bottles and bags) and also for polystyrene; used in cars, etc.

10.  Using sugar cane as feedstock for ethanol.  Being able to sell to more than one buyer creates a tremendous opportunity for small producers to diversify and also to justify much-needed capital improvements.

A Bright Future, Given Solid Governmental Partnering
The outlook for Bolivia looks very bright on many fronts.  In fact, one can already see progress as the city of Santa Cruz de la Sierra continues to experience tremendous growth, not only in natural gas, but also in the manufacturing and agricultural industries made efficient by the availability of energy.

AAPG Young Professionals paper presentation at YPFB - Santa Cruz, Bolivia

Susan Nash at YPFB, Santa Cruz, at AAPG YP meeting

Bolivia Plans to Expand Gas, Electricity, Green Fuel, and Petrochemicals Exports

Bolivia intends to expand its exports of LNG, electricity, petrochemicals, and green fuels in 2019 and beyond, announced the Bolivian Vice President, Alvaro Linero Garcia. In addition, exploration to develop reserves of gas are being encouraged through partnering with companies to conduct studies and to drill exploratory wells. In addition, mature fields will be the target of study and investment to revitalize the reservoirs through enhanced recovery methods.

Panel discussion with Luis Sanchez, Minister of Bolivian Ministry of Hydrocarbons, with experts discussing opportunities and expanded reserves.

The announcements were made at the closing ceremony of Bolivia's First International Forum on Gas, Petrochemicals, and Green Fuels, a four-day event in Santa Cruz (August 28-31) that had as a goal to encourage investment, and in doing so, presented a wide array of potential game-changers for partner companies, investors, and Bolivia.

With a goal of stimulating investment in exploring for hydrocarbons, the Minister of Hydrocarbons, Luis Sanchez, detailed the opportunities to participate in more than 10 blocks in Bolivia, many in the prolific Tarija and Chuquisaca regions.

First International Forum on Gas, Petrochemicals, and Green Fuels / Santa Cruz, Bolivia

Green fuels, including new ethanol sources from sugar cane grown by small cane farmers in the Santa Cruz region.

LNG terminals are being expanded, with the long-term goal of being a gas transportation hub for all of South America on the drawing board.

Exhibitions featured green fuel, LNG technology, pipelines, compressors, equipment for enhanced recovery, and more.

The importance of incentives for investors was stressed, along with access to new studies and data which can be reprocessed and analyzed to reevaluate existing reservoirs, and to identify stacked plays, shale plays, as well as improved producibility using new technologies.

Susan Nash, Ph.D. (center) after giving a talk on case studies of  successful exploration with new technology. Accompanied by YPFB engineers Ing Isabel Prudencio and (unidentified).

Distinguished Geoscientists Meet in Santa Cruz, Bolivia to Advance the Petroleum Energy Sector in Bolivia