ENERGÍABolivia addressed the urgencies and priorities of the national energy agenda in a context of a hydrocarbon crisis. Participants made it clear that gas must continue to set the agenda and that lithium is not the solution.
ISSUE 146 | 2025
Vesna Marinkovic U.
Bolivia’s economic crisis, largely driven by the decline in hydrocarbon production, has placed at the center of the debate the urgent need to define clear policies for the energy sector. Against this backdrop, the magazine’s colloquium brought together two relevant voices from the energy field: Engineer Enzo Michel, Executive Director of the Bolivian Chamber of Hydrocarbons and Energy (CBHE), and Dr. Iver Von Borries, managing partner at the law firm Wayar & Von Borries, both with extensive experience linked to the sector.
The discussion revolved around four main points: the need for a State policy that provides short-term certainty, the role of investment and operational excellence in reversing the crisis, the importance of regional energy integration, and finally, the urgent priorities that should be addressed in the 2025–2026 period.
In his first intervention, Engineer Michel stressed the importance of generating clear and lasting rules of the game that restore confidence to the private sector. He recalled that neighboring countries such as Argentina, Peru, Colombia, and Brazil have already sent strong signals to investors through bilateral agreements and stable legal frameworks, while in Bolivia uncertainty has caused a steady decline in investment. “It’s no surprise to anyone that investments have been falling; we need commitments that endure over time at least 10 to 20 years to reverse the curve,” he stated.
VON BORRIES: “NATURAL GAS MUST REMAIN THE BASIS OF OUR ECONOMY”
For his part, Dr. Iver Von Borries agreed on the need to urgently rethink the country’s energy policy but warned that Bolivia cannot rely solely on lithium as the backbone of its fiscal revenues. He reminded that it is still an incipient sector at the global level, with extraction techniques not yet fully consolidated, especially regarding environmental aspects, which generates a high degree of uncertainty about its future sustainability.
In this regard, Von Borries suggested that the national strategy should return to what the country knows and has developed for decades: natural gas exploitation. “Beyond a clear government policy, what is needed is political will something we unfortunately haven’t seen in recent years,” he said, questioning the lack of reserve replenishment and the absence of proper sector planning.
The lawyer also emphasized the urgency of modernizing the current regulatory framework. He recalled that Hydrocarbons Law 3058 dates back to 2005 and, in addition to being outdated, contains articles incompatible with the State’s Constitution enacted in 2009. “It’s an outdated, unfair law with unconstitutional provisions. A new law should be passed in the next legislature, but in the meantime it is essential to issue clear, applicable regulations that truly generate incentives to restore foreign investment confidence,” he argued.
With this stance, Von Borries agreed with Michel that legal certainty and clear long-term rules are unavoidable conditions for Bolivia to overcome its current hydrocarbon and economic crisis.
“WE NEED TO ACTIVATE PROJECTS IN THE MEGA FIELDS AND BUY TIME FOR EXPLORATION”
In his second intervention, Engineer Michel warned that Bolivia’s gas production curve is in decline and, although this will not be strongly felt in the next two or three years, by 2028 or 2029 supply could intersect with demand, creating a critical scenario of shortages.
Faced with this situation, he proposed splitting the problem into two stages. In the short term, he suggested activating certain projects in currently producing fields, especially in mega fields like Sábalo, Margarita, and Incahuasi, where technical activity is still possible, although not profitable under current conditions. “With certain incentives we can activate short-term projects, and for the medium and long term we need a new Hydrocarbons Law with much more certainty and competitive conditions compared to the region,” he explained, recalling that Bolivia’s fiscal burden exceeds 80%, while in neighboring countries it is around 50%.
He stressed that all Bolivian fields are mature and in decline, which makes it necessary to prioritize immediate investments in those that already have infrastructure, transport, and production facilities. He also mentioned the need to assess new exploration areas, such as the Madre de Dios basin, though he acknowledged these are longer-term projects.
One of the main obstacles, he noted, is that mega fields currently allocate between 60% and 70% of their production to the domestic market, at prices six times lower than export prices. This discourages new investment and jeopardizes continued operations, as some activities do not even cover operating costs. To reverse this situation, he highlighted the importance of the Incentives Law proposed by the CBHE to the Government, which offers an additional two dollars per thousand cubic feet destined for the domestic market—a measure that would allow projects to be reactivated, increase production, and secure surpluses for export.
Finally, he warned that the effort must be accompanied by more rational use of natural gas in the domestic market. “Given its very low price, we haven’t made the best use of it. If we achieve a more balanced scheme, we could even make room for renewables and sustainably reduce our gap,” he emphasized.
VON BORRIES: “WE ARE FAR TOO LATE, BUT WE CAN STILL REBUILD TRUST”
Asked whether the measures under discussion could bear fruit in the short, medium, or long term, Dr. Iver Von Borries was categorical in stating that the energy sector’s production cycles are long and that Bolivia is already facing a critical situation. “In oil and gas, out of every ten wells drilled, seven turn out negative; that’s a global rate, and in Bolivia we are far too late,” he warned. Nonetheless, he insisted on seeing the “glass half full” and urged that the next government, regardless of political orientation, make rebuilding investor confidence a cornerstone. In his view, this requires a unified Legislative Assembly capable of passing bills that can recover lost time and send clear signals to the market.
“We’re not just talking about a crisis in terms of gas; we’re also talking about an electricity crisis in the medium term. Combined-cycle turbines depend on natural gas, and without gas we cannot produce electricity. The same goes for CNG, household gas, and the entire consumption chain that sustains the population,” he explained, without ruling out possible blackouts in the near future, with the corresponding economic and social impact.
The third axis of the colloquium introduced a new challenge: analyzing whether attracting investment can be complemented by strengthening regional energy integration. At this point, the debate opened on the need to strengthen relations with neighboring countries like Argentina, and with markets already connected by pipelines, not only to transport gas but also for Bolivia to achieve tangible economic benefits in a crisis context.
MICHEL: “THE NEXT GOVERNMENT COULD BE THE FIRST TO IMPORT GAS IF WE DO NOT ACT WITH URGENCY”
When addressing the issue of regional integration, Michel highlighted that Bolivia holds a key competitive advantage: the pipeline system that connects Argentina with Brazil through Bolivian territory. However, he warned that the country is not sending clear signals to its strategic partners. “The perception in Argentina is that Bolivia is imminently going to become a gas-importing country. That raises doubts as to whether we are truly a reliable partner for long-term contracts with Brazil,” he said.
He recalled that for years Bolivia was a secure supplier for the region, but today it is seen as a nation in decline. In light of this, he stressed that the main challenge is to prevent gas supply and demand from crossing, something that could happen by the end of the decade. “I always say that the next government, regardless of its political orientation, could be the first to import gas if we don’t make urgent decisions,” he warned.
“…the bioceanic corridors are being designed to avoid passing through Bolivian territory…”
The executive emphasized that gas projects are not solved overnight: they require legal changes, environmental licenses, drilling that can cost up to $100 million per well, and take at least 12 months to complete. For this reason, he reiterated the need to act as soon as possible to attract investments and activate projects that guarantee domestic supply while maintaining export capacity.
Regarding energy integration, Michel argued that Bolivia remains the best alternative for the region, provided it first secures its own domestic market and sends clear signals of stability. He also pointed out that it will be inevitable for the next government to discuss tariffs, since excessively high costs could make transportation projects from Vaca Muerta to Brazil unfeasible, bringing prices closer to liquefied natural gas (LNG) levels. “That is the benchmark we must consider when we think about regional integration,” he concluded.
INVESTMENT AND LEGAL CERTAINTY: THE OTHER SIDE OF INTEGRATION
For his part, Von Borries was blunt in stating that the main obstacle to advancing regional energy integration lies not only in production capacity, but also in the lack of an attractive and reliable legal framework for investors.
“We need to call things as they are. The first thing we must do is recognize that what has been done in the last 20 years has not been right. The nationalization of hydrocarbons, which at the time was presented as a political victory, is now taking its toll. The exit from ICSID and the dismantling of 23 bilateral investment treaties left Bolivia isolated and without guarantees for foreign capital,” he said.
The expert recalled that the lack of legal security has made the country an unattractive destination for large-scale investments. “If we want to seek fresh money, we will not find it in the domestic private sector, because there are no entrepreneurs with that capacity. The only option is to turn to multilateral organizations or attract foreign companies. And those companies exist in the Middle East, in Europe, in the United States, in Brazil; but none will come if we do not rebuild trust,” he added.
Iver also warned that major regional connectivity projects, such as the bioceanic corridors, are being designed to bypass Bolivian territory, which demonstrates the country’s loss of competitiveness in the region.
“Today, the main task of the next government must be to rebuild legal security and offer competitive fiscal conditions. With a government take close to 80%, we will never be attractive, no matter how many natural resources we have. What companies care about is the rate of return in the shortest possible time, and Bolivia does not offer that today,” he concluded.
TIMELINES FOR REACTIVATING PRODUCTION
For now, and as a short-term measure, Michel recommended starting from a realistic and transparent diagnosis of the situation. “The first step is to recognize reality. This is not about political or alarmist messages; it’s the objective situation of the country. We need an Incentives Law that is already under discussion in the Chamber of Deputies, which has allowed us to gain some time. In Bolivia, approving a petroleum service contract has taken up to seven years, and that is unsustainable. With this law we could renegotiate deadlines, economic terms, and eliminate unnecessary bureaucracy, which in six months would allow us to activate environmental licenses and prepare contractual addenda,” he explained.
Michel noted that the first year of the reactivation process in the hydrocarbon sector would be marked by regulatory adjustments and the activation of permits, while in the second year (2027) projects could begin execution in areas with short-term potential, such as northern Sábalo, Caipipendi, Incahuasi, and fields operated by YPFB Chaco and YPFB Andina.
“We must be realistic: we are not going back to producing 60 million cubic meters of gas in the short term. It’s about moving step by step and, above all, rebuilding investor confidence. And this also applies to YPFB, because at the end of the day it is a company and must be guided by profitability criteria. We cannot continue pushing uneconomic projects,” he stressed.
He recalled that despite the decline in production, Bolivia still has significant potential. He cited a 2022 Ryder Scott study that identified a portfolio of around 30 TCF of resources, although not classified as reserves. “This shows there are opportunities in the southern Sub-Andean, northern Sub-Andean, and the Madre de Dios basin. The southern Sub-Andean can be worked on in the short term, but the other cases are medium- and long-term bets, because they require infrastructure and maturation,” he explained.
Finally, Michel insisted that the country must accelerate discussion on a new Hydrocarbons Law. “The faster we have a renewed legal framework, the sooner we can attract frontier exploration investments. For 20 years we have not assumed that risk, and that is why we now face decline. Wells are expensive, deep, and highly uncertain, but they also offer important rewards. If Bolivia does not offer competitive fiscal conditions, those investments will simply be made elsewhere,” he remarked.
A CLOSING WITH WARNINGS AND HOPES
The colloquium concluded with a message that sought to put the immediate challenge into perspective. Experts agreed that Bolivia must understand that it is not only about aiming for high percentages of state participation, but about creating conditions that allow real investments to flow. “It is better to have 50% of something than 80% of nothing,” summarized Iver Von Borries, emphasizing the urgency of modifying the current regime so that both international and domestic companies, public and private, can find viability in the country through public-private partnerships.
In summary, two positive aspects were identified that allow for some optimism: on the one hand, the existence of a draft Incentives Law that, if passed, could become the first step toward greater certainty; and on the other, the fact that Bolivia still retains significant hydrocarbon potential, particularly in gas, even if these have not yet been translated into reserves.
Nevertheless, the magnitude of the challenge also became clear: the country is undergoing a specific and concrete crisis in the hydrocarbon sector, which is already impacting the national economy. The lack of exploratory investments, the absence of legal security, and the delay in modernizing the regulatory framework have placed Bolivia at a crossroads that, if not quickly resolved, could compromise both energy security and macroeconomic stability.
The conclusion of the dialogue was categorical: Bolivia’s hydrocarbon and economic future will depend on technical, smart, and urgent decisions that enable the country to overcome the current crisis and regain its attractiveness in the regional and international markets.
“…the existence of a draft Incentives Law that, if passed, could become the first step toward greater certainty…”
