Bolivia’s centrist government will respect all existing hydrocarbons and lithium agreements as part of a push to rebuild investor confidence after years of instability, the country’s energy minister said in an interview.

Mauricio Medinaceli, appointed by President Rodrigo Paz in November, said the pledge to honor deals signed by the previous leftist government with Russia and China - even if it disagrees with how they were awarded - was intended as a “first message to investors."

“Our contracts will be respected,” the minister told Reuters in La Paz on January 16, adding that the same applied to oil traders that supplied fuel last year and to the firms involved in lithium exploration.

"Ideology doesn’t put food on the table; we cannot, out of ideological or geopolitical zeal, act otherwise," he said.

Bolivia holds vast reserves of lithium and natural gas, but output has lagged after nearly two decades of state control that deterred foreign investment, as companies fretted over lack of certainty.

The South American country has been heavily dependent on foreign fuel supplies, including diesel from Russia, vessel tracking data show, as local production subsides.

President Paz has moved to reverse long-frosty ties with Washington and multilateral lenders after years of Bolivia's alignment with Venezuela, China, Iran and Russia.

Medinaceli said the government would discuss next steps with Chinese and Russian companies that have signed lithium agreements which generated widespread criticism from investors, politicians and businesses, for their lack of public oversight. But he said no deals would be torn up altogether.

“These are companies that invested money here,” he added. “Now we must find a way to move forward within the framework of the signed contract.”

OIL AND GAS OVERHAUL

Bolivia is drafting a sweeping hydrocarbons law and a separate lithium law to attract foreign capital after nationalization of strategic industries under the previous leftist administration hurt output over roughly a decade.

Bolivia's state-owned energy firm, YPFB, which controls energy trading, will remain part of the system but no longer dominate it, Medinaceli said.

The reform, due to be presented in the first half of this year, is designed to lure private firms back into exploration through a more flexible tax and royalty system and new contract models, he said. Several US and regional energy companies have shown interest, he added, without naming them.

If Congress approves the law this year, Bolivia plans to launch oil and gas exploration bidding rounds in 2027.

FUEL SUBSIDIES

As part of the government's economic plan, several fuel subsidies were lifted on December 18, sparking protests. Officials have since negotiated agreements with major labor unions, though analysts caution that further economic reforms could trigger demonstrations again.

Medinaceli said the subsidy cuts were essential to stabilize public finances. The next step was to transfer much of fuel supply and logistics to private operators, through 10 wholesale distribution blocks, each with five-year contracts designed to ensure investment recovery.

"The trend is to establish medium- and long‑term contracts with stable prices," he said, “We want to send a message that Bolivia respects its contracts.”