Bolivian natural gas industry needs more exploration activity

Bolivian natural gas industry needs more exploration activity
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Incahuasi gas field: history and current situation

Incahuasi gas field is situated 150 miles from Santa Cruz, Bolivia by the Andean Cordillera.It contains one of the largest gas reserves of the country. There are the following facilities on the territory:

  • wells (3 units)
  • a gas treatment plant
  • pipeline (which links the field with the export pipeline).

There is a great problem with the developing of the field as it is supported only by the Latin American countries, which are still developing economies. The top export countries for Bolivia are Argentina and Brazil. According to the representative of Bolivian Incahuasi project manager for Total (the company, which is developing the field on behalf of the government), it is more and more hard to extract the gas from under the Andean foothills. Totally laid 90 miles of pipeline along a route through the hills with an angle of inclination, which exceeded 30 degrees. With the variety of topography and altitudes on the gas field, the situation becomes more and more complicated.

Luis Guillermo Acha, the head of the leading oil and gas state-owned company (YPFB), claims that they are planning to enlarge the gas reserves by 11 trillion cubic feet by 2020. They also want to invest $5 billion in the exploration.

The issue of investment

The majority of experts say that the oil and gas sector faces great complications. One of the reasons for the problems is connected with the nationalization of YPFB. As a result, it is the only company, which has a right to sell exports, while all the rest of the organizations have to sell their products through them. Lots of companies are afraid of investing in the exploration of gas fields, as they are looking for stability, institutional independence, safety, and ease of business development.

The absence of exploration leads to the lack of reserves. Thus, in 2016, there was a US $2.1 billion fine imposed by Energia Argentina on YPFB for the failure to meet the delivery targets. It was connected not just with the decline in gas production but also with the rise of consumption by the internal market.

Nevertheless, there are experts, who are more positive. Acha from YPFB assures that the investments are already on their way. Besides, many companies still want to work in Bolivia, while the county can become not just an energy supply hub but also a significant logistics center if the infrastructure of Bolivia will be improved.