There are numerous reasons why countries should strive to be more oil independent. U.S. oil and gas companies like Triple Diamond Energy Corp. are doing their part by drilling for oil on U.S. ground for U.S. consumption. Still, much of the oil we depend on is imported from other countries. Boliva’s recent stand to take control over their oil and gas resources offers a glimpse of the problems that can occur when countries depend on others for their oil and gas.

The Plentiful Supply of Oil and Gas in Bolivia

The natural gas resources found in Bolivia are the second largest supply in South America and third in the Western Hemisphere.  Until May 1st 2006, private companies were able to utilize the natural resources found in Bolivia.  However, on that date in May, the Bolivian President decided to no longer allow private companies to profit from Bolivia’s resources. 

The Bolivian President Takes a Stand

Until that time Petrobas, a major Brazilian corporation, and Exxon Mobile were able to gain large amounts of wealth thanks to the Bolivian resources.  The President of Bolivia decided that his country should take control of their natural resources for their own benefit rather than continue to help foreign countries gain wealth.

A Bold Decision Requires Bold Action

While many in the natural gas industry expected the President’s decision, his aggressive actions caught many by surprise.  After banning foreign companies from utilizing their natural gas, the President sent troops to the gas fields to enforce the new rules. This move, while aggressive, is not without reason. 

Venezuela, the location of the largest supply of natural gas in South America, previously made the same declaration that completely voided contracts with private companies.  After these contracts were voided, private drilling companies were evicted from 32 oil fields unless they would agree to a 60% stake of all future oil yields to the state owned oil company.  Ecuador also has taken a more aggressive stance when dealing with foreign companies by setting a limit on the profits of all companies that are not native to Ecuador.

Bolivia’s Quest to Become Oil Independent

While Bolivia can severely restrict foreign companies, they cannot completely cut ties with the major foreign gas companies that have done business in Bolivia until recently.  At this point Bolivia does not have the resources needed to extract and utilize the natural gas found in their country.  Properly extracting all natural resources requires state of the art technology, geologists, and physical equipment that that country simply does not possess.

Until Bolivia is able to properly utilize its resources without international help they will have to do without the capital natural gas was bringing the company.  In order to nurture the new feelings of pride and nationalism, the President of Bolivia will need to encourage citizens to learn from and study the technology and procedures of other major natural gas corporations. When Bolivia is truly able to independently explore and extract the natural gas located in its reserves, they will truly be able to benefit from the new laws and business practices of Bolivia.