Will Bolivia Become South America’s ‘Energy Heart’?

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Bolivian Hydrocarbon Minister Luis Sánchez touted the success of the country’s energy sector last month, saying the nationalization of its natural resources were to thank. // File Photo: Bolivian Government.

Bolivian Hydrocarbon Minister Luís Sánchez last month lauded the country’s achievements in the gas and hydrocarbon sectors, saying the country could become South America’s “energy heart,” thanks in part to the nationalization of its natural resources. Also last month, however, an official from Brazil’s mines and energy ministry said his country wants to start a pilot project next year to explore the possibility of tapping unconventional oil and natural gas reservoirs in an effort to become more energy independent. Brazil is one of Bolivia’s main natural gas importers. What is the outlook for Bolivia’s energy sector, and has the nationalization of oil and gas been as successful as the government says? Will Brazil continue to be a main importer of Bolivian gas? How will Bolivia’s energy sector fare as unconventional energy sources become more popular in Latin America?

Iván Rebolledo, a managing partner at TerraNova Strategic Partners LLC, and president at the Bolivian-American Chamber of Commerce: “Indeed, Evo Morales’ government was successful in forcefully renegotiating contracts with the hydrocarbons sector at the outset of his presidency, mistakenly referred to as nationalization. These actions led to very significant changes in royalty distribution and exponential gains for the Bolivian treasury, which in turn helped implement numerous cash transfer programs and other initiatives that helped in social development. According to recent World Bank figures, annual GDP growth has hovered around 4.8 percent since 2010, while extreme poverty has gone from 36 percent to 17 percent. Unfortunately, from that early period to the present, the government has been unsuccessful in attracting significant investment in the hydrocarbons or overall extractive industries sectors, mainly due to…”

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