From Boom to Collapse and the Hope for Reform
La Paz, May 14, 2026. The hydrocarbon crisis in Bolivia has reached a critical turning point. Between falling production and the depletion of reserves, the sector is undergoing a transformation that can be explained through the metaphor of the first five books of the Bible.
🔍 GENESIS: The origin of the crisis (2006). The current situation stems from the so-called “Nationalization” of 2006. For 20 years, policy focused on monetizing existing reserves and expansive public spending, while neglecting investment in exploration. The result: the risk capital necessary to ensure long-term sustainability was driven away.
👣 EXODUS: The flight of risk capital. Consequently, Bolivia experienced an “investment exodus.” The private operators that remained in the country prioritized recovering their capital and operating costs, while shifting their strategic interests to neighboring countries with more attractive legal frameworks.
📜 LEVITICUS: The regulatory straitjacket. The legal framework of the last two decades, consolidated in a markedly statist Constitution, became an obstacle to modernization. These laws, based on nationalist ideology, prevented the regulatory changes required by the sector to adapt to the international market.
📊 NUMBERS: The harsh statistical reality. Today, the figures present an alarming outlook:
- Reserves: Reduced to just 3.7 Tcf.
- Gas Production: Dropped to 26 MMmcd (million cubic meters per day), back to pre-2006 levels.
- Liquid Production: 24,000 bbl/d (while 75,000 bbl/d of fuel are consumed).
- Dependency: Nearly 100% import dependency for diesel and ~60% for gasoline.
- Imminent Risk: The shadow of importing LPG and natural gas looms over the national economy.
📖 DEUTERONOMY: The new Hydrocarbons Law. Faced with this scenario, the government of Rodrigo Paz Pereira is promoting a “short law” (ley corta) to reorganize the sector. The “pillars” of this new stage include:
- Tax Reform: Overcoming the distortive 50/50 formula between the State and companies which, in reality, reaches 70/30 in favor of the State.
- Real Prices: Valuing production at international prices (oil) and export prices (gas).
- YPFB Re-engineering: Removing its marketing monopoly and reducing its administrative “obesity.”
⚡ LOOKING TOWARD THE FUTURE: Energy Transition
It’s not all about gas. The energy sector is preparing for a shift in the energy matrix with a new Electricity Law, soon to be presented to the Legislative Assembly. The goal is clear: To reduce dependency on hydrocarbons, leverage the country’s abundant renewable sources, and electrify transport and industry.
It is still possible for hope to be reborn in the Bolivian energy sector!
Health and regards,
Francesco