New Gas Discovery Brings Optimism for Bolivia's Energy Future

Such announcements of new discoveries give hope for Bolivia to arrest declining production – at least temporarily – while replenishing remaining reserves and providing economic gains via exports. Nonetheless, muted exploration activity and the announcement of just one or two such discoveries mean Bolivia is far from achieving these goals and the country will have to ramp up exploration activity, which may prove relatively costly given reservoir depths and associated complexities.

Domestic gas production, which has been in constant decline, currently stands at around 12 billion cubic meters per annum (Bcma), compared to about 20 Bcm in 2013, and is expected to continue declining to around 9 Bcma by the end of the decade, according to Rystad energy estimates. Production is expected to ramp up slightly thereafter, although the available undeveloped fields are not large enough to sustain this output for long (Figure 3).

Development of Mayaya Centro-X1 IE would help inject new volumes, with YPFB’s announcement saying the field could produce up to 10 million cubic meters per day of gas and between 500 and 1,000 barrels per day of liquids via a three-well development campaign. Nonetheless, development activity within the stipulated timeframe of two to three years is an ambitious target, given the location of the discovery – Mayaya Centro-X1 IE lies in an undeveloped area away from existing fields and would call for the establishment of new infrastructure to export produced volumes.

The relative lack of substantial new resources for development is depleting Bolivia’s proven reserves and, as such, the country’s reserve replace ratio. According to official records from Bolivia, the country’s proven gas reserves as of December 2018 were around 8.95 Tcf and it has since produced around 2.7 Tcf of gas between 2019 and 2023, while only managing to add about 1.1 Tcf of new gas volumes via exploration. The nation has a dual responsibility of replenishing reserves at its mature fields via various enhanced oil recovery (EOR) activities and spearheading exploration to explore its remaining subsurface potential.

Bolivia has long been an exporter of natural gas to Brazil and Argentina, but it has struggled to sustain volumes on the back of a steady decline in production over the past decade, barring a small gain in 2021 because of a recovery from the Covid-19 pandemic. Therefore, new exploration successes could lead to an increase in exploration activity and inject fresh hope in replenishing the country’s gas reserves.

By Rystad Energy