Bolivia unearths "mega" natural gas field amid economic and political challenges

Bolivian President Luis Arce announced the discovery of a massive natural gas field earlier this week. The South American president told Bolivian citizens and media that the field has a capacity of 1.7 trillion cubic feet (TCF), making it the most significant natural gas discovery since 2005.

Arce said the new discovery has a market value of $6.8 billion.

Among the South American’s country’s primary sources of income, natural gas exports ranks as one of the highest. Still, the country’s production levels have been diminishing the last few years.

Traditionally, Bolivia’s export rate has remained strong as a result of demand from neighboring countries such as Argentina and Brazil.

Arce added that the new “mega field” would be a boost to Bolivia’s struggling gas industry and start “a new chapter” for the South American nation.

“This marks the beginning of a new chapter for the northern sub-Andean region, offering hope of maintaining our country as an important gas exporter,” said Arce, who was the target of a military coup last month. The embattled president has also been blamed by Bolivians for fuel shortages and problems with the economy.

The Bolivian president proudly touted that the mega gas field was “the most important discovery since 2005.”

Armin Dorgathen Tapia, the president of Bolivia's state-run energy company, Yacimientos Petrolíferos Fiscales Bolivianos (YPFB), said the discovery was a “new exploratory frontier,” and that the company plans to immediately invest $400 million in developing the field.

“We will have three additional drilling projects in the short term, including two delimiting wells in the Mayaya structure and an exploratory well in an adjacent structure to the east,” said Dorgathen Tapia. “For the early start of production, we plan to transport an existing plant and build a pipeline from Mayaya to Senkata, as well as evacuate the liquids to Sica Sica. This will allow us, in a first stage, to cover the domestic gas market in the west. We are proud for YPFB to make these investments.”

The new hydrocarbon field is expected to enter production in the next four years, according to a report published by Energy Connects. The company has vowed that drilling operations will take place outside of parks and “protected areas.”

The report indicated that YPFB Corporation’s project operator, Casa Matriz, has already invested an estimated $80 million in exploring the area.

“To date, tests have been conducted on the sands of the Tomachi formation with positive results, confirming gas production with associated condensate of 52 degrees API. There are still several levels to be tested,” said Fernando Arteaga, National Manager of YPFB’s National Exploration and Exploitation Management division.

The discovery comes less than a month after ADN America reported that Bolivia quelled an unsuccessful military coup against Arce, who is now hopeful that that an economic upswing could change his political fortunes.  

Some have questioned whether the coup was legitimate or a false flag operation orchestrated by Arce or other members of the government to rally support behind the president.

During the past few years, Bolivia's foreign exchange reserves have diminished, taking a toll on the country’s exports amid rising inflation.

The result of diminishing resources and rising inflation has created political malcontent and frustrated Bolivians who supported Arce in the 2020 presidential election since many believed his role as the country’s former economic minister would help recreate the financial boom it experienced from 2005-2014 when gas prices were higher.

Arce is expected to run for re-election in the upcoming 2025 presidential election, but the current government is currently divided between his supporters and dissenters who long for a return of former president, socialist Evo Morales.