Bolivia delays elections again as gas sector sputters

Market: Natural gas, Oil products
24/07/20

Gas-rich Bolivia's caretaker administration has delayed general elections for a third time as it seeks to recover from the Covid-19 pandemic.

Following the resignation of former president Evo Morales in November 2019, new elections were supposed to have been held in January. These were first moved to May and then 6 September. The new tentative date is 18 October.

The move might give caretaker president Jeanine Anez room to improve her standing as she runs for a full five-year term, but she faces a possible backlash as the economy, particularly the key natural gas sector that traditionally accounts for the bulk of foreign earnings, fails to recover.

In a May report on Bolivia, the International Monetary Fund (IMF) forecast a "significant decline" in the price of Bolivia's gas exports in second half 2020. The forecast is based on lower international oil prices that underpin the price of Bolivian gas exported through pipelines to neighboring Argentina and Brazil.

The gloomy IMF report was followed by a June blow to Bolivia's state-owned YPFB's gas exports to Brazil's state-controlled Petrobras. YPFB announced that it accepted a request from Petrobras to lower minimum supply to 10mn m3/d. The two parties had reached agreement in March setting the minimum at 14mn m3/d and the maximum at 20mn m3/d. The original sales contract called for 24mn-30mn m3/d of supply.

Bolivia's gas production averaged 51.5mn m3/d in January, before falling to 39.3mn m3/d in March and 28mn m3/d in April, its lowest in years, according to the hydrocarbons ministry. April 2019 production averaged 36.6mn m3/d.

The extent of the crisis is also seen in the country's diesel and gasoline imports. Fuel imports were 253,929 tons (12,000 b/d) in the first five months of 2020, down from 885,570 tons in the same period last year, according to Bolivia's statistics institute.

Anez, who announced on 10 July that she had tested positive for Covid-19, is struggling in the polls, potentially opening the way for an opposition figure close to Morales, who is in exile in Argentina.

A Celag survey in early July found nearly 65pc of Bolivians unhappy with Anez's economic management and almost 60pc with her policies to combat the pandemic. The poll had her in a distant third place, with 13.3pc. In front was Luis Arce, finance minister under Morales for more than a decade, with 42pc, and former president Carlos Mesa with 27pc.

By Lucien Chauvin

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Australia’s gas leaders hit out at market intervention

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01/04/25

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