Tarija Department

Tarija Department holds 80-85% of Bolivia's proven natural gas reserves, making this southeastern region the keystone of the national energy economy. The Margarita-Huacaya gasfield alone produces over 19 million cubic meters daily, and for two decades Bolivia ranked as South America's second-largest gas exporter. Yet by 2025, declining production has reduced Bolivia to a net fuel importer—a collapse driven by the 2006 nationalization that deterred foreign investment in exploration.

The department demonstrates how keystone resource concentration creates both power and vulnerability. Tarija's gas revenues once fueled national growth and gave the region political leverage over La Paz. But the decision to nationalize hydrocarbons under Evo Morales created a classic succession trap: the state-owned YPFB became both regulator and operator, an inefficient politicized entity that reduced exploration and allowed reserves to deplete without replacement. The $1.4 billion Upstream Reactivation Plan attempts to reverse this decline through 56 exploratory projects across multiple departments.

Tarija also produces Bolivia's wine, an incongruous secondary economy in a landlocked nation better known for coca and quinoa. The department borders Argentina, and its milder southern climate supports viticulture impossible in the highland departments. This agricultural diversification represents an attempt to escape the source-sink dynamics that characterize Bolivia's extractive economy, though wine exports remain marginal compared to hydrocarbon revenues.