The Bolivian government has confirmed its role as a “key intermediary” in the transportation of Argentine natural gas destined for Brazil. This decision arises due to a lack of incentives and a state policy that, according to experts, has been inefficient in the exploitation of natural gas in Bolivia.

ISSUE 134 | 2024

Raúl Serrano

Iver von Borries, an expert in gas, oil, and energy regulation, explains that the lack of incentives has led to a decrease in the replenishment of natural gas reserves by production companies, causing Bolivia’s “megafields” to enter a phase of decline. He states that this situation has necessitated a reevaluation of YPFB’s role, which would shift from being a major producer and marketer of gas in the region to a new role as a “carrier” or intermediary in transportation, noting that revenues from this activity will be considerably lower.

Profile
	A lawyer, he has been advising major national and international companies in the Oil & Gas sector in Bolivia for 23 years. He advises the Bolivian Chamber of Hydrocarbons and Energy (CBHE) and serves as legal counsel for a dozen upstream, services, and supplies companies in the Oil & Gas and Energy sectors. He was a postgraduate lecturer (Master’s in Business Management in Oil and Gas) at INEGAS. He has been honored by the Bolivian Senate for his contributions to Hydrocarbons Law in Bolivia. He has been named “Lawyer of the Year in the Hydrocarbons and Energy Sector” in Bolivia by the International Gas & Energy Forum (IGEF) for two consecutive years. He is an arbitrator at arbitration centers nationally, in Peru, and Argentina. He is a partner at the law firm Wayar & von Borries.
IVER VON BORRIES

For her part, Daniela Durán, a lawyer and industry expert, notes that Bolivia has all the necessary technical infrastructure to serve as a transit country for gas transportation from Argentina to Brazil. She indicates that the pipelines running from Yacuiba, through Río Grande to Mutún, along with the compression plant, are equipped to handle larger quantities of gas than Argentina can currently offer. However, Durán warns that limitations in Argentina’s transportation and compression systems could become a bottleneck.

LEGAL AND REGULATORY FRAMEWORK

Regarding the necessary regulations for Bolivia to assume this new role, both von Borries and Durán agree that the recent Supreme Decree No. 5206, issued on August 28, 2024, establishes the legal foundation for Bolivia to utilize its transportation capacity for Argentine gas. This decree introduces the concept of “Transit Gas” and defines the rules for its transportation, facilitating the necessary modifications to YPFB’s statutes so it can assume the role of “aggregator” and sign the corresponding contracts with Argentine production companies.

Profile
	With over 22 years of experience in the oil sector, including successful negotiations as a team leader, drafting and analyzing contracts, and providing technical legal advice on various aspects of the oil and gas industry, including exploration and production (E&P) contracts, gas supply agreements (GSA), and gas transportation agreements (GTA). Over 7 years of valuable experience as a CEO, making high-level executive decisions in administration and management.
DANIELA DURÁN

ONGOING NEGOTIATIONS

Von Borries also points out that the aforementioned regulation establishes a deadline for Customs and the Regulatory Entity (National Hydrocarbons Agency) to, within the scope of their functions, take responsibility for providing the regulatory and procedural framework necessary for the transportation of Transit Gas without major issues and according to the concept of this new service/business.

Currently, YPFB is in negotiations with Argentine gas producers to formalize a contractual model that would allow it to act as an aggregator and transporter of gas. This new role would provide YPFB with the opportunity to charge for the transportation service, although, as von Borries notes, the revenues from this role would still be lower than those generated from direct gas commercialization.

In conclusion, as Bolivia faces a decline in its natural gas reserves, the country is adapting to a new scenario where it could capitalize on its gas transportation infrastructure to become a strategic transit route in regional energy trade, offering an alternative during a challenging national economic situation.