Joel Michel Varona

The nationalization of the hydrocarbons in Bolivia has not only changed the course of the South American nation’s history, but in the last eight years, has also made this sector the steam engine of the national economy. Since the start of the process, the government and energy sector have implemented various programs such as the National Development Plan, the Bolivian Hydrocarbon Strategy, Plans for Investment, Exploration, Industrialization, as well as the Hydrocarbon Agenda.

In Bolivia hydrocarbons were returned to the people, thanks to the government of Evo Morales (far left), next to Álvaro García, vice president of Bolivia (far right) in the natural gas liquids separation plant in Río Grande, which produces Liquefied Petroleum Gas (GLP) and stabilized gas.

The nationalization through state owned Treasury Oil Fields Bolivia (YPFB) generated a boom for the country. The encouraging results led to an investment of just over 3 billion dollars, a record amount in the history of the national industry.

This process of investment benefits areas such as exploration, exploitation, storage, refining, transportation, separation plans, industrialization, gas networks, commercialization and smaller investments.

On May 1, 2006, President of Bolivia, Evo Morales, decreed the nationalization of the hydrocarbons sector, a decision which, according to the president of the YPFB, Carlos Villegas, was fundamental, as it saved the business from extinction and transformed it into the most important company in Bolivia.

Carlos Villegas, president of YPFB, said that the decision to nationalize the hydrocarbons sector in Bolivia was fundamental to rescuing the company from extinction and transforming it in to the most important business in Bolivia.

Villegas recalled that due to decisions taken by Bolivian governments associated with United States interests, focused on privatization of public companies, the YPFB was languishing in the liquidation process.

It has been eight years since the sector was nationalized, a politically, economically and socially vital decision by Evo Morales. The 4th International Gas and Oil Congress, organized by the YPFB was recently held in the western city of Santa Cruz de la Sierra, Bolivia, to which experts, executives and authorities in the field of hydrocarbons, attended.

Among the companies participating were the Russian Gazprom, YPF from Argentina, Pdvsa from Venezuela, Ecuadorian Petroamazonas, Petrobras from Brazil and the Chinese National Petroleum Corporation Company. During the event it was announced that the Bolivian Liquefied Petroleum Gas (GLP) industry is forecast to produce 1,400 tons of gas per day as of January 2015, which will enable the country meet its domestic needs and consolidate an export plan in Latin America.

The hydrocarbon industry is the most important sector of the Bolivian economy, with taxes and royalties.

According to Patricio Norris, director of the GLP Business Development Group of the Dutch company Trafigura, Bolivia is on track to lead the gas industry in Latin America. He commented that in order to strengthen the sector the country must consider regional markets, since lower transportation costs would mean greater earnings.

Norris explained that Brazil will shortly achieve self-sufficiency, but won’t have surplus to export, while Chile, Paraguay and Uruguay must overcome various differences to produce GLP on a large scale. One of the main proposals of the 4th International Gas and Oil Congress was to create a block of hydrocarbon producing Latin American countries in order to increase cooperation in this field.

During his speech, Miguel Matías Galuccio, president of Treasury Oil Fields Argentina, stated that they are planning to create a congress – called G-10 - which will bring together the major hydrocarbon powers in Latin America.