Decline: Exports of Bolivian gas to Brazil may end by 2030, causing losses in the sector

According to a Wood Mackenzie report, Bolivian gas production will decline even faster, falling from 1.400 mmcfd in the year 2022 to 400 mmcfd in the year 2030. 

“Production in Bolivia has been in constant decline since 2015, with a slight increase in 2021,” says Amanda Bandeira, Upstream analyst at Latin America by Wood Mackenzie. “However, with few new discoveries and little supply in the mature fields, production will start to decline at a much faster pace. Currently, domestic demand consumes around 30% of the total supply. By 2030, domestic demand will likely outstrip this supply and we could see Bolivia become an importer.”

According to some reports, it will take a new push for exploration and new discoveries in Bolivia to reverse the production trend, however, initial efforts were not successful. “In 2021, the Bolivian government announces an exploration plan, but only three of the twenty announced prices have been drilled and are dry. Furthermore, Bolivia's fiscal terms are among the least competitive in the Latin American region. These have done little to attract capital from outside the country for more exploration contracts,” added Kuy Hun Koh Yoo, Wood Mackenzie's Latin America Upstream analyst. 

If the projections are confirmed, the gas tray of the South America. Argentina is already moving towards self-sufficiency in the coming years, with all the expected development of the unconventional gas reserves of Vaca Muerta, located in the Neuquén Basin. In the case of Brazil, “it still requires a lot of imports”, was what Wood Mackenzie's gas and energy analyst for Latin America, Henrique Anjos, recalled. 

For this reason, Bolivians hope to replenish all their reserves and, with the drop in demand from Argentina, increase supply to Brazil from 2025 onwards, when it will see a window of various opportunities for diversifying customers here. The decline that was projected will have a dramatic effect on the export market as well. Natural gas is a totally crucial sector for Bolivia's economy, with some exports to neighboring Brazil and Argentina playing a key role. Exports to these two countries represent more than 70% of total gas sales and 20% of total exports. 

“Argentina has expanded its production, reducing the importance of Bolivian gas, but Brazil still requires a lot of imports,” said Henrique Anjos, Gas and Energy analyst for Latin America at Wood Mackenzie. “If Bolivia fails to develop additional production, exports will stop by 2030 as domestic demand outstrips production. Alternative energies can play an important role in replacing the domestic gas gap.” In 2022, the Brazil felt, more in practice than in theory, the limitations of the Bolivian offer. After signing a more advantageous contract with Argentina, Bolivia greatly reduced its volumes destined for Petrobras – from around 20 million m³/day to almost 15 million m³/day.