Petrobras returns to Bolivia's oil fields as government bets on foreign expertise

The boliviano has lost ground on nearly every trading day since President Rodrigo Paz's government abandoned the Bs 6.96 fixed exchange rate that had held for fifteen years, and today the U.S. dollar trades near Bs 9.96 in the official market —having touched Bs 10.50 in recent sessions— while Economy Minister José Gabriel Espinoza insists the dollar will stabilize below Bs 11 within the coming days. That promise, repeated with variations since the flexible regime took effect, captures the central tension defining the Bolivian economy right now: a government trying to manage an orderly devaluation while inheriting a fuel crisis, a rising external debt burden, and a corporate sector on the brink of collapse after fifty days of blockades that, according to Los Tiempos, left fourteen dead and estimated losses of USD 2.7 billion.

The scale of the currency adjustment cannot be understated. The Banco Central de Bolivia has recorded the official dollar trading above Bs 10 on twenty-nine occasions since the new regime took effect, and importer trade associations warn that the true cost increase goes beyond the exchange rate itself: customs duties, now calculated on a higher reference value, push the real cost of importing well above what the official quote suggests. The Instituto Boliviano de Comercio Exterior has acknowledged that the float "brings the economy in line with reality," but warns that the real challenge is attracting foreign currency, not simply devaluing. An economist quoted by El Deber went further, arguing that it was the banks themselves that drove the initial dollar surge as they repositioned into the new currency reality.

Espinoza, who was sworn in as minister on Bloomberg and pledged fiscal discipline, faces a scenario in which banking sector profits have fallen 58% due to the mandatory loan deferral —a measure the business community rejects outright, viewing it as a threat to corporate operational continuity— and in which the reformulated budget has already cut Bs 20 billion to bring the fiscal deficit down to 9%. The government claims to have posted a surplus in January and proclaims that Bolivia has "overcome the period of greatest liquidity pressure," but the Cámara Forestal reports a 66% drop in exports, agricultural producers denounce that diesel is selling on the black market at Bs 14 per liter —more than double the regulated price— and Confeagro has declared a national emergency.

The fuel crisis is, in this context, the multiplier for every other problem. YPFB admitted a lack of fluidity in supply and promised "additional nominations" to eliminate the lines, while the government officially acknowledged that the diesel shortage will extend through the end of July. Gasoline, according to the state oil company, has already normalized, but LPG is scarce in Santa Cruz, where cylinders sell for Bs 35 in neighborhood stores. Expert Carlos Delius was categorical in El Deber: the structural solution to the fuel problem requires a political agreement and a reform to the Constitución Política del Estado, since the roots of the shortage lie in decades of subsidies that distorted production, consumption, and investment in the sector. Industrialists, for their part, are calling for the subsidy not to return and blame the blockades for sinking what remains of economic activity.

Against this backdrop comes the most significant news of the week for long-term energy policy: Bolivia and Brazil have agreed to technical working groups for greater participation by Petrobras, whose ADRs trade on the New York Stock Exchange, across Bolivia's entire oil chain, including the restructuring of YPFB. This marks a first-order strategic shift. During the MAS governments, Petrobras was gradually pushed to the margins after the 2006 nationalization; its return in a role of technical partner and eventual operator signals that the Paz government is betting on attracting international private capital and know-how to solve what state management could not. The question analysts have yet to answer is whether that process can move quickly enough to ease the shortages before the accumulated economic damage becomes irreversible.

The external financing architecture is taking shape rapidly. CAF sealed a USD 3.1 billion strategic alliance, the IDB committed up to USD 4.5 billion, and Bolivia returned to international debt markets with a USD 1 billion sovereign bond issuance. Country risk has fallen below 500 basis points, S&P upgraded the sovereign credit rating, and the government anticipates the arrival of some USD 3 billion in investment. In parallel, the release of dollar deposits —the so-called "corralito bancario" that froze savings for months— will begin on July 15 under a one-year schedule, which should inject dollar liquidity into the financial system and help stabilize the exchange rate, though banks are already warning that the mandatory loan deferral continues to erode their capital.

Bolivia also holds 80% of the critical minerals the global economy demands, according to Los Tiempos, and the lithium sector is watching with interest the visit of European Union delegates. However, an investigation cited by the same outlet reveals that USD 1 billion was invested in lithium industrialization with meager results, and that the state-owned enterprises created during sixteen years of MAS government accumulated losses of Bs 4.058 billion. Minister Espinoza, who rules out an "old-style" adjustment that would punish the poorest, is looking at an economy that economist Gonzalo Chávez himself defines as a "primary-exporter, trader-driven model that has begun to hit bottom."

What to watch in the coming weeks is the speed at which the exchange rate stabilizes below Bs 11 —or fails to do so— the pace of disbursement of CAF and IDB funds, concrete progress in the technical working groups with Petrobras, and whether the government can present at the business summit called by the private sector a credible emergency plan that goes beyond the financial relief decrees analysts have deemed insufficient. Minister Espinoza warned that growth could turn negative in 2026 if the effects of the 47 days of conflict are not offset by structural measures. That warning, delivered by the government itself, is the most honest measure of the size of the challenge.

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**Petrobras (NYSE: PBR)** — Bolivia and Brazil agreed to technical working groups to expand the Brazilian state-owned oil company's participation across Bolivia's entire energy chain, including the operational restructuring of YPFB. The agreement represents Petrobras's most significant return to the Bolivian market since the nationalizations under the MAS government, with direct implications