Bolivia Crisis Thwarts Shell Gas Exploration
(Bloomberg) -- Natural gas exploration by global oil companies in Bolivia, key to growing the country’s sagging economy, has stopped amid an escalating political crisis that has left the Andean nation rudderless.
Royal Dutch Shell Plc, Total SA and Repsol SA have all stopped or severely limited drilling on exploration wells, said Alvaro Rios, a former hydrocarbons minister and director of Gas Energy Latin America, a consultancy. Nationwide protests flared after a flawed election culminated with Evo Morales, South America’s longest-serving president, announcing his resignation on Sunday.
There’s no evidence Bolivia’s output or exports are affected. But new wells are key to revitalizing an aging industry as the economy slows and neighbors Brazil and Argentina seek to boost their own production. Shell has halted work on its Yapucaiti exploratory well, cut staffing at its Jaguar well and temporarily closed two offices “as a precautionary measure,” Cindy Babski, a spokeswoman, said in an email.
“Some of the exploration wells have been stopped,” the consutant Rios said by telephone from Santa Cruz, adding that most of Morales’s cabinet, including the hydrocarbons minister, have also resigned. “There is no established power in Bolivia.”
Total and Repsol didn’t immediately respond to e-mails seeking comment.
Bolivia’s oil and gas revenues have plunged by more than half since 2014. Meanwhile, public debt soared to 54% of gross domestic product in 2018, according to the International Monetary Fund. Economic growth in the country slowed to 4.2% in 2018 from a peak of 6.8% in 2013 due in large part to waning gas exports, according to the World Bank.
Election irregularities in the first round of presidential voting last month triggered weeks of violent clashes, with looting and arson, and intervention from the country’s armed forces. Morales said he was leaving office to avoid violence, adding that he wouldn’t flee the country since he hadn’t stolen anything.
Morales presided over an expanding economy and reduced poverty during his 14 years in office thanks to robust natural gas production from fields that were mainly discovered during previous administrations. For decades, Bolivia relied on captive markets in Brazil and Argentina where it could charge prices in excess of international benchmarks.
In recent years, though, its two eastern neighbors made large natural gas discoveries and invested in infrastructure to receive seaborn imports, undermining Bolivia’s pricing power.
To contact the reporter on this story:
Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net
To contact the editors responsible for this story:
Tina Davis at tinadavis@bloomberg.net
Reg Gale, Pratish Narayanan
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Rystad Looks at the Buzz Around White Hydrogen
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension