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Foreign Affairs, Trade and Development Canada

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Canada helps Bolivians benefit from their oil and gas resources

Courtesy of BHARP
Milka Hinojosa, Bolivia's first female petroleum engineer at a production facility in Chaco.

Bolivia is one of the poorest countries in Latin America. Canada is helping Bolivia to consolidate good governance practices, reform public-sector institutions, establish better regulations in strategic economic sectors, and reduce poverty.

Changing the face of the oil industry

The oil and gas (hydrocarbon) industry is a key driver of Bolivia's economy, accounting for more than 50 percent of the government's annual revenues and the country's exports. Canada has been helping Bolivia develop its hydrocarbon sector since 1994, with significant results.

Governance

Through Canada's international development projects, Bolivian government agencies have received training and technical assistance to monitor and manage the petroleum industry. This includes support to establish regulatory agencies, operational guidelines, national legislation and environmental standards. Having internationally accepted procedures and standards has led to increased hydrocarbon production and export.

"Canadian advisors helped Bolivia implement a regulatory framework and laws that led to huge investments in large-scale exploration and development," says industry expert Tony Galisheff. "Since then, ten times as many natural gas reserves have been discovered in Bolivia, including three of the world's fifty largest deposits."

Bolivia's ability to deal with foreign companies has been strengthened too. "Canada helped us develop a tariff structure for companies transporting oil and natural gas," says Gonzalo Castro, a former official in Bolivia's Ministry of Hydrocarbons and Energy. "We learned arbitration techniques and how to do regulatory audits of international companies. Now we have the technical skills and knowledge we need to meet and negotiate with international teams."

Benefits for the poor

Canadian expertise has also helped Bolivia increase its tax revenues from oil and gas companies. With the assistance of the Canada Revenue Agency, this project has helped establish a specialized unit to collect and manage taxes paid by the oil and gas companies.

"Bolivians are tired of tax evasion and corruption," says Waldo Cerutto, a former manager of this specialized unit. "The project has improved public confidence that oil and gas taxes are being collected and distributed fairly. People used to boo us; now they applaud us. Better tax collection improves economic stability, which contributes to political stability in Bolivia."

Annual Bolivian government revenues from the hydrocarbon sector quadrupled from US$546 million to US$2 billion between 2004 and 2007. Most of this increase is being spent on social equality initiatives-clinics, schools, roads, and job creation programs-to help impoverished Bolivians.

As a result of two other Canadian projects, some indigenous communities now play a more active role in oil and gas development in their regions. Aboriginal technical teams plan and monitor operations, assess environmental impact, and negotiate fair compensation for their communities.

Equality between women and men

The project has also helped open the door for women professionals to enter the petroleum industry. Through high school career-orientation programs and university internships, women are breaking down barriers that limited their access to jobs in the hydrocarbon sector.

When Martha Saucedo left high school in La Paz, no one thought she could become a petroleum engineer. "My father asked why I'd go into a man's career, instead of some job like teaching that women can do," she says. "And oil companies didn't think women could handle the tough field conditions." But after a one-year internship funded by Canada, Martha is now monitoring operations in Bolivia's oil fields as a full-time employee in the Ministry of Hydrocarbons and Energy and mentoring other young women eager to get into the field.

"Canada has made a significant contribution to Bolivia's oil and gas industry,'' says Gonzalo Castro. "We have learned a lot from Canadian experience and expertise."