Pagina Siete’s editorial:
Few investments in exploration
One of the sources of major revenue of the Treasury comes from the export of natural gas to Argentina and Brazil. YPFB, the State-owned company, is responsible for doing that work. One of the most important challenges faced by this entity, and the State as a whole, are the declining reserves of this energy. Since the arrival to power of Evo Morales, seven years ago, those reserves have not increased, in fact have been reduced, especially because the exploratory activities have been minimal compared with what is needed.
A couple of weeks ago [editorial’s date is 5/28/13], the Fundacion Jubileo [Jubilee Foundation] issued a report which shows the delays of the exploratory activities and noted that the announcement of YPFB that 14 wells will be explored this year “seem insufficient”.
According to Raúl Velázquez, Jubileo, only 13% of the total planned investment for this year, estimated $2,242 million dollars, will go to investment. The rest is devoted, among other issues, to exploitation.
Jubileo noted that at the public hearing of accountability and prospects for 2012 was established that between 2011 and 2012 the budget for exploration fell from $351 million to $232 million.
“In contrast, since March, the Government intensified via exports, the accelerated monetization of oil reserves, which were mainly discovered in the so-called neo-liberal phase, according to other experts”, says Rolando Carvajal commenting on the study of Jubileo.
YPFB has failed to get partners to make those explorations, especially because the tax system repels any interest. Several calls to companies, and promises of future incentives, have ended in nothing. At a recent international forum of hydrocarbons the Vice President returned to insist on incentives for private companies who come to Bolivia to explore. It is still not known if this latest attempt will have greater success than in the past. The other issue that prevents the arrival of investments is, in general, bad weather for them. Although the Government denies it, nationalization policy, coupled with the super-heavy tax burden, makes in the hydrocarbon sector, specifically exploration investments to be reluctant to arrive in country.
That is why the State is trying to, now, do those exploration tasks by itself, but does not have the experience and the necessary technicians to do so. While not having settled or balanced the tasks of exploration and exploitation, this can become the Achilles heel of all Bolivian politics of tax revenue.
Very thoughtful analysis, however I have serious doubts that anyone inside current government would be wise enough to analyze this editorial and make adjustments… it is simply far beyond their mentalities…