Bolivia Upstream Opportunities
January 2022

Bolivia Oil & Gas Upstream Exploration and Development Opportunities

Bolivia is one of the most important natural gas producers in South America, and it plays a strategic role in the regional energy integration.

The Bolivian State has decided to promote new opportunities on exploration and development (E&D) in the upstream sector, providing relevant information on mature blocks and fields with hydrocarbon potential. In addition, it has implemented a new regulatory framework for this sector.

The Hydrocarbon Development Plan seeks a significant investment in exploration, storage and logistics, production, refining and industrialization, as well as in the improvement of the current structure and gas transportation.

The information provided in this report is an executive summary of publications made by the Bolivian government on currently available E&D opportunities, showing their hydrocarbon potential and investment attractiveness.

Regulatory Framework

The Political Constitution of Bolivia authorizes the O&G state company YPFB to:

  • Sign service contracts with public, mixed or private companies, Bolivian or foreign, for O&G production activities. The State pays a fee that has two components, recoverable costs and a retribution for the profits from block production.
  • Establish associations or mixed economy companies for the execution of exploration, development, refining and industrialization activities.  Furthermore, the Constitution establishes that YPFB must have a participation of at least 51% of the capital stock in these associations or companies.
  • The Legislative Assembly must explicitly authorize the signing of any O&G service contract.
  • Sharing Profits: Profits are split between YPFB and the holder on every Service Contracts.
  • Recoverable costs: These are the capital and operating expenses (CAPEX & OPEX) that the holders normally invest during the E&D periods. YPFB repays these costs as the asset is produced.
  • Profit: YPFB will pay the operator the corresponding profit as agreed in the oil services contract according to the gas produced in the block. 
  • Royalty Payment: This includes a payment to the Department (area of the country) where the E&D activities are carried out (12%) and a direct deposit to the National Treasury (6%).
  • Hydrocarbon Tax: A production tax payment of 32%.

Law No. 3058 is the most important legal framework for the regulation on the hydrocarbon sector. For exploration and exploitation purpose, this law sets out that the Bolivian territory is divided into two zones declared as Traditional and Non-Traditional. Traditional Zones are those where hydrocarbon production and infrastructure are commercially available.

Exploration Opportunities

The exploration opportunities described in this section are subdivided into “development bocks”, considering technical aspects, geological environments, economic evaluation, proximity and production facilities.

With these opportunities the Bolivian State seeks to reduce E&D costs using existing facilities and reducing risks by progressively acquiring Geological & Geophysical (G&G) data.

Relevant Information Yarara Block

relevant information ingre and huacareta blocks

relevant information sauce mayu, iñau and asero blocks

relevant information vitacua, rio salado, san telmo and astillero blocks

relevant information carohuaicho and irenda blocks

relevant information villa montes and aguaragüe blocks

Development Opportunities: Mature/Brown Fields

The objective of the Reactivation Plan for Mature/Brown Fields is to carry out field operations to produce remaining resources and reduce liquid hydrocarbon imports.

YPFB will conduct the reactivation operations itself or through national or international oil companies.

This section will describe the most relevant information on investment opportunities in mature fields.

The investment opportunities described in this document are based on information published in 2021. Currently some of these areas may have already been granted to private or public companies for study agreements, exploration, or seismic projects. Please contact our law firm for further information.

Contact

If you require more information, the PPO team remains at your disposal.

Pablo Ordoñez

PARTNER

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Carlos Covarrubias

SENIOR COUNSEL

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Bolivia Upstream Opportunities

January 2022

Bolivia is one of the most important natural gas producers in South America, and it plays a strategic role in the regional energy integration.

The Bolivian State has decided to promote new opportunities on exploration and development (E&D) in the upstream sector, providing relevant information on mature blocks and fields with hydrocarbon potential. In addition, it has implemented a new regulatory framework for this sector.

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