Decline: Bolivian Gas Exports to Brazil Could End by 2030, Causing Losses in the Sector

Written by Bruno Teles

Published on 20/01/2023 at 15:18

As exportações de gás boliviano para Argentina e Brasil podem acabar até 2030, fazendo com que haja prejuízo no petróleo e gás (Foto/divulgação)

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According to a report by Wood Mackenzie, bolivian gas production will decline even faster, falling from 1,400 mmcfd in 2022 to 400 mmcfd in 2030.

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

According to some reports, a new push for exploration and new discoveries in Bolivia will be necessary to reverse the production trend; however, initial efforts have not been successful. “In 2021, the Bolivian government announced an exploration plan, but only three of the twenty announced sites were drilled and are dry. Additionally, Bolivia’s fiscal terms are among the least competitive in the Latin America region. These have done little to attract foreign capital for more exploration contracts,” added Kuy Hun Koh Yoo, the upstream analyst for Latin America at Wood Mackenzie.

If the projections are confirmed, it completely changes the gas landscape in South America. Argentina is already on its way to self-sufficiency in the coming years, with the expected development of its unconventional gas reserves from Vaca Muerta, located in the Neuquén Basin. In Brazil’s case, “it still requires many imports,” recalled Henrique Anjos, gas and energy analyst at Wood Mackenzie for Latin America.

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For this reason, Bolivians hope to replenish all their reserves and, with the decline in demand from Argentina, increase supply to Brazil starting in 2025, when they will see a window of several opportunities for client diversification here. The projected decline will also have a dramatic effect on the export market. Natural gas is a crucial sector for Bolivia’s economy, with some exports to neighboring Brazil and Argentina playing a fundamental role. Exports to these two countries represent over 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 many imports,” said Henrique Anjos, gas and energy analyst for Latin America at Wood Mackenzie. “If Bolivia cannot develop additional production, exports will be halted by 2030 as domestic demand surpasses production. Alternative energies may play an important role in filling the gap of domestic gas.” In 2022, Brazil felt, more in practice than in theory, the limitations of Bolivian supply. After signing a more advantageous contract with Argentina, Bolivia significantly reduced its volumes destined for Petrobras – from about 20 million m³/day to almost 15 million m³/day.

Decline: Bolivian Gas Exports to Brazil Could End by 2030, Causing Losses in the Sector

According to a report by Wood Mackenzie, bolivian gas production will decline even faster, falling from 1,400 mmcfd in 2022 to 400 mmcfd in 2030.

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Decline: Bolivian Gas Exports to Brazil Could End by 2030, Causing Losses in the Sector

According to a report by Wood Mackenzie, bolivian gas production will decline even faster, falling from 1,400 mmcfd in 2022 to 400 mmcfd in 2030.

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While communities suffer from water scarcity and the advancing desert, women in Morocco use nets high up in the mountains to trap fog droplets, fill reservoirs, and transport drinking water through more than 10 km of piping.

China has begun the second phase of energy assistance to Cuba with a 120 MW solar generation plan, and the first result is a photovoltaic park with batteries that regulates voltage, controls frequency, and provides local autonomy to an island suffocated by chronic blackouts.

Germany installed vertical solar panels on a lake in Bavaria, and the result broke conventional logic: instead of producing energy at midday peak, the plant generates more early in the morning and in the evening, exactly when families turn on appliances and factories are in full swing.

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