Related Articles
Forward article link
Share PDF with colleagues

Electoral controversy paralyses Bolivia

Demonstrations turn violent as president Evo Morales inches to disputed victory

Protests have erupted across several of Bolivia’s major cities following a verdict from the supreme electoral tribune (TSE) that President Evo Morales won the country’s national election and a record fourth consecutive term in office.    

Anger and confusion among supporters of leading opposition candidate Carlos Mesa boiled over as an early poll, accounting for 84pc of the vote, indicated that the two nominees were heading for a run-off on 15 December. Initial figures showed Morales with 42.3pc of the vote versus 41.7pc for Mesa. 

The TSE then unexpectedly suspended coverage of the election for around 24 hours. With 95pc of the ballot calculated, the electoral body revealed that the result had decisively swung in favour of Morales, with 46.86pc compared to 36.72pc—the 10pc margin needed to win the election outright.

The Organisation of American States (OAS), an international observer, expressed concern with the electoral procedure. “The TES presented data with an inexplicable change in trend that drastically modifies the fate of the election and generates a loss of confidence in the electoral process,” OAS stated on 22 October.

Protests and violence soon spread across the country. Police clashed with demonstrators in La Paz, while electoral buildings were set ablaze in the mining city of Potosi and capital Sucre. 

The EU issued a statement insisting on an end to the violence and the need for an investigation. EU spokesman for foreign affairs and security policy Maja Kocijancic said it was “vital to guarantee the credibility of the electoral process, secure the confidence of the voters and respect the will of the Bolivian people.”

Put on hold

The leadup to the election had already been mired in controversy. Under the Bolivian constitution, only two consecutive terms are permitted. “Morales has been able to pursue a fourth term as a result of an interpretation established by the Bolivian constitutional court of his ‘right to be elected’,” says Enrique Barrios, partner at Bolivian law firm Guevara and Gutierrez.

58mn m3/d — October gas production

During the 2014 election, Morales was unable to stand for re-election, having already served two terms from 2006 and 2010. But the constitutional court instead ruled that he had only been president from 2009, reasoning that the state was re-founded with a new constitution and therefore was not re-elected.

In 2016, the government then proposed a referendum asking the public if consecutive terms could be extended. Morales lost the referendum but the decision was again returned to the courts. “The Bolivian constitutional court decided to interpret article 23 of the US convention on human rights and concluded that article 168 [the clause barring office terms to just two] was restrictive of the candidate’s political rights,” says Barrios. The result was Morales was able to stand for a fourth consecutive term.

Significant resource

The importance of the country’s natural gas sector was highlighted by both candidates and remains a crucial lifeline for Bolivia’s economy. The Andean nation has around 0.3tn m3 in gas reserves, according to the latest BP Statistical Review, and exports the majority to its neighbours Brazil and Argentina.

In October, the Bolivian minister of hydrocarbons Luis Sanchez said the country outputs 58mn m3/d, mostly as a result of improvements at the Sabalo field, operated by Petrobras in the San Antonio block, and the La Vertiente field, operated by Shell.

“The TES presented data with an inexplicable change in trend that drastically modifies the fate of the election and generates a loss of confidence in the electoral process" OAS

YPFB, the Bolivian state-owned oil and gas company, announced in September that the Sabalo field would receive a further $113mn in investment, aimed at boosting production by 2.5mn m3/d to 15mn m3/d. The country’s production capacity would then reach 60mn m3/d.

Bolivia has also strengthened its relationship with Russia. In July, Morales visited Moscow and agreed a 20-year 2.2mn m3/d natural gas deal with Russian fertiliser company Acron.

Together, YPFB and Acron will form a joint venture for commercialisation of urea from the Bolivian Bulo Bulo plant and Brazil’s Tres Lagunas facility—Acron is in the process of acquiring the Brazilian plant from Petrobras. The Bolivian state-owned company will hold a 12pc stake in the project with the possibility of extending it to 30pc in the future. Minister of hydrocarbons Luis Sanchez called it “another historic day for Bolivians.” 

Another joint venture was also agreed between YPFB and Gazprom to exploit Viticua gas, located in the Chuquisaca department. An investment of $1.1bn was confirmed, which by 2028 will output approximately 12mn m3/d of natural gas. Bolivian authorities said it would help the state generate $4.8bn.

Limiting factors

But there are long-term risks to Bolivian output. Brazil aims to ramp up its gas production from the pre-salt region. The Brazilian association of piped gas distributors (Abegas) stated associated gas production capacity could reach c.170-215mn m3/d by 2030.

Bolivia’s long-term gas contract with Brazil is due to end at the conclusion of the year. The director of Brazil’s national agency of petroleum, natural gas and biofuels Jose Cesario Cecchi suggested at an event with Boliva’s hydrocarbon minister Luis Sanchez that the deal may still be renegotiated. “Brazil needs more than 30mn m3/d of natural gas and Bolivia is a strategic partner in this mission.”

YPFB also wants to strengthen its position exporting gas to Brazil. The company expressed interest in increasing its current 12pc stake in Transportadora Brasileira Gasoducto Bolivia-Brazil (TBG), a pipeline company which operates a pipeline running from the Bolivian-Brazil border to Sao Paulo. Petrobras has been divesting its ownership of several Brazilian pipelines this year to help reduce its debt and has spoken of diluting its 51pc stake in TBG.

Another potential danger to Bolivian gas exports is Argentina’s shale gas reserves. “Bolivia has a major agreement with Argentina,” says Barrios. “However, this relationship could be affected by Vaca Muerta, an Argentinian field that is considered among the biggest fields in the world. It is possible that the natural gas demand of Argentina could reduce, [which]would at least imply a renegotiation of the agreement between Bolivia and Argentina.”

Also in this section
Investors warn complacent gas industry
11 November 2019
Firms need to step up climate change efforts in new ESG environment
Capital demands African regulatory stability
11 November 2019
Financial fundamentals and sustainability considerations will also be key to attracting the project financing required to develop recent discoveries
KRG keeps registering growth
8 November 2019
Isolated from instability in the south, the pioneers of the north’s independent oil industry are quietly pushing ahead