Efficiency of Bolivian Hydrocarbon Resource Development: Case Study of a Mega-Field in the Context of Regional Markets and Policy Framework Incentives
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Bolivia is a producer and the main exporter of natural gas in the South American market. The role of Bolivia as a natural gas provider to Brazil and Argentina has recently been put into question. Lagging investments in exploration, partially caused by the hydrocarbon fiscal regime changes that favor the government, has resulted in no major discoveries in the past decade. Current reserves and production are concentrated in three gas-condensate naturally fractured mega-fields in the Southern Sub-Andean province, with two of them producing for more than 15 years. The aim of this study is to quantify the impact of the past legislation modifications on the allocation of cash flow streams to the government and the contractor, and evaluate the feasibility of future drilling activities in a representative mega-field under the 2015 Hydrocarbon Incentives Law that aims to prevent the looming natural gas supply and demand gap. A review of the profitability of Bolivia’s current hydrocarbon extraction arrangements is useful in order to be able to forecast likely future revenue streams. This study briefly outlines the development of the regional gas trade and then proceeds to outline the architecture of the principal cash flows generated by the case study. The concurrent profitability of existing field operations is analyzed from the perspective of both the operator and the state with a range of outcomes depending on a sensitivity analysis of the regional gas price development, under various fiscal regimes and contractual arrangements. The actual optimum rate of monetization of these remaining hydrocarbon reserves in Bolivia will be affected by a requirement of attractive return on investment considering various gas prices and demand scenarios, as determined by competitive shale gas development in Argentina, offshore gas in Brazil, and LNG imports.
Sarmiento Michel, Juan Pablo (2017). Efficiency of Bolivian Hydrocarbon Resource Development: Case Study of a Mega-Field in the Context of Regional Markets and Policy Framework Incentives. Master's thesis, Texas A & M University. Available electronically from