Oil and nation a history of bolivias petroleum sector

The development of Bolivia’s oil sector opened the eastern regions of the country to colonization and development, instigated the largest international war in twentieth- century Latin Am

Energy and Society

Brian Black, Series Editor

Titles in the Series

Oil and Nation: A History of Bolivia’s Petroleum Sector

Stephen C Cote

West Virginia University Press

Morgantown 2016

Oil and Nation

A History of Bolivia’s Petroleum Sector

Stephen C Cote

Copyright 2016 West Virginia University Press

All rights reserved

First edition published 2016 by West Virginia University Press Printed in the United States of Amer i ca

Library of Congress Cataloging- in- Publication Data

is available from the Library of Congress

Cover design by Than Saffel

Cover image by Than Saffel

Introduction ix

1 Discovery: The Sucre Pioneers 1

2 Standard Oil and the Reshaping of Eastern Bolivia 30

3 Oil and the Chaco War 62

4 Oil and Nation 92

5 Oil and the Revolutionary State 121

6 Fall and Rise of the Oil State 140

Notes 155

Bibliography 183

Index 195

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Central Intelligence Agency, 2006) Courtesy of the U.S Library of Congress Geography and Maps Division G5321.F7 2006 U5.

Figure 2 Bolivia, physical landscapes (Washington, D.C., Central

Intelligence Agency, 2006) Courtesy of the U.S Library of Congress Geography and Maps Division G5320 2006 U5

In May 2006, Bolivian president Evo Morales renationalized his Andean country’s gas and oil reserves He named the decree Heroes of the Chaco, invoking the indigenous soldiers of the Chaco War of the 1930s, who defended Bolivia’s petroleum fields from advancing Paraguayan troops Morales declared to the nation and the world, “For more than 500 years our resources have been pillaged This has to end now.”1 As the country’s first indig-enous president, Morales understood the historical connections between Bolivia’s natu ral resources, Bolivian nationalism, and indigenous identity politics He exploited historical constructions and memories of the Chaco War, of per sis tent economic de pen-dency, and of the long indigenous strug gle for basic rights and dignity to build the po liti cal capital necessary to demand more from the hydrocarbon sector to fund his economic and social goals Hydrocarbons (oil and natu ral gas) hold special significance

to Bolivians today, as they are one of a cluster of commoditized natu ral resources, along with water and coca, that both galvanized social movements to overthrow the neoliberal regime of Gonzalo Sánchez de Lozada in the Gas War of 2003 and set the stage for the historic election of Evo Morales in 2005

I watched the Gas War unfold when I was a gradu ate student earning my master of arts at the University of Connecticut I became captivated by the images of indigenous peasants and miners leaving their homes and work to encircle the La Paz basin

to protest a proposed natu ral gas pipeline The pipeline was not yet under construction, but Bolivians were out in the streets facing down their military Dozens lost their lives I learned how the pipeline protest was part of a larger historical strug gle to protect

x Oil and Nation

national resources from foreign companies, how the proposal to send the pipeline through Chile set off strong nationalist feelings against the country that had taken Bolivia’s seacoast in the late 1800s, and some of the ways in which the pipeline provoked emo-tional responses to racial and ethnic inequalities and injustices heightened by neoliberal economic policies enacted since the 1980s

I began to delve deeper into the role hydrocarbons have played in Bolivian history, which led to my 2011 dissertation at the Univer-sity of California, Davis, and this book Today, hydrocarbons make up more than half the country’s exports— surpassing min-erals by nearly 20  percent— demonstrating the need to write a comprehensive and dedicated study of the hydrocarbon sector and its historical context.2 Tin, which made up more than half the country’s exports from the early 1900s until the 1980s, now accounts for just 4  percent Much has been written about Boliv-ia’s tin, but oil’s story should now be added to the canon

Bolivia’s historic oil nationalizations help to clarify the tions between energy and society The 2006 nationalization was not the first attempt by a Bolivian leader to harness the country’s oil for social purposes It was, in fact, Bolivia’s third oil national-ization, although it was carried out in a diff er ent form from the others, as I will explain in chapter 6 The first nationalization came

connec-in 1936 and 1937, when the post– Chaco War “military socialist” government, as they called themselves, formed a state oil com pany and canceled Standard Oil Com pany of Bolivia’s contract The second was the expropriation of Gulf Oil properties in 1969 In this text, I will examine the nationalizations within a broader his-tory of Bolivia’s oil sector Oil, though not often associated with Bolivia, profoundly shaped the country’s social and natu ral land-scapes beginning in the late nineteenth century The development

of Bolivia’s oil sector opened the eastern regions of the country to colonization and development, instigated the largest international war in twentieth- century Latin Amer i ca, led to Latin Amer i ca’s first nationalization of a major foreign com pany, and shaped the

Bolivian National Revolution of 1952 In 1954, Bolivia’s state oil com pany achieved energy in de pen dence for the country.

These dramatic events occurred during, and because of, the global shift in energy regimes to oil.3 The transition to petroleum reshaped power relationships around the world as countries integrated the new energy source into domestic markets, export- growth policies, and military machines, in some cases leading to the paradoxical “resource curse,” which triggered negative eco-nomic and po liti cal effects in oil- producing countries.4 Oil, which powered machines, was also a source of economic and po liti cal power Nations that controlled oil reserves, refining pro cesses, and supply chains grew in geostrategic importance, especially with the advent of mechanized warfare in the early twentieth century As James Malloy and Eduardo Gamarra note in reference to Bolivia’s military dictatorships of the 1960s and 1970s, “ Because oil went to the heart of strategic questions and to critical notions of national security, the question was obviously of some significance to the military.”5 Less developed countries like Bolivia that possessed oil came to view the resource as a pos si ble cure for their social ills as well The potential for growth, modernization, and power from oil fired imaginations and fueled conflicts.6

An oil- based economy operates on a diff er ent scale than ous energy regimes, as oil is more efficient and cleaner burning than wood or coal, although it is certainly not what we would con-sider to be “clean” energy Oil- based technologies “sped up felt time” by intensifying transportation, communication, and indus-trial development throughout the world.7 Oil- based technologies were, as John McNeill writes, “something new under the sun.”8

previ-To be part of that emerging petroleum- based modernity, Bolivia had to secure access to sources of oil at home and abroad The outcome of the strategic dependence on this new energy source had tremendous po liti cal and social consequences, including the Chaco War, the nationalization of Standard Oil, and the Revolu-tion of 1952 Oil production also had environmental consequences

xii Oil and Nation

for Bolivia, including reshaping of the eastern lowlands and urban landscapes, as well as melting glaciers due to climate change.One of the most impor tant consequences of the transition to petroleum in Bolivia was the development of the eastern lowlands Santa Cruz de la Sierra grew from a small frontier city on the east-ern edge of the Andes in the first de cades of the twentieth century

to Bolivia’s largest city today The development of the petroleum industry in the eastern lowlands of Bolivia also led to a cultural dissonance between easterners and western highland Bolivians, even as the oil itself physically integrated the regions A conse-quence of this cultural difference in Santa Cruz is the presence of right- wing opposition to Evo Morales’s government The opposi-tion has used terms such as “productive” and “Western” to describe their outlook toward social and economic development, in con-trast to the highlands, which become, in this discourse, “less pro-ductive” and “less Western.”9 The historically constructed racist overtones of this rhe toric toward the majority indigenous high-landers, however, neglect to account for the large indigenous highland populations who inhabit Santa Cruz and work, produc-tively, throughout the eastern lowland departments and the rest of the country; the institutional barriers that the indigenous peoples have faced in Bolivia and throughout the Amer i cas since the arrival of Eu ro pe ans; and the enormous economic obstacles con-fronting developing countries

Regionalism and racism have determined internal po liti cal dynamics in Bolivia since in de pen dence and help to define the colonial legacy of the area then known as Upper Peru Rosanna Barragán explains the complicated relationship between Santa

Cruz and La Paz as “an opposition of east and west, collas (from the Altiplano) and cambas (from the lowlands), indigenous peoples,

whites and mestizos, tradition and modernity, collectivism and private initiative, peoples and oligarchs.”10 Barragán underscores the role of the central government in supporting the development

of the lowland departments through increased revenues from

mineral extraction after 1938 by state oil and mining companies,

turning on its head the argument from Santa Cruz autonomistas

( those advocating regional autonomy) that the state has blocked lowland development and takes too much revenue from the resource- rich lowland departments She accurately points out, however, that the hydrocarbon wealth is not legally the property

of the department where it resides but of the state

While demonstrating the importance of hydrocarbon revenues from the state to Santa Cruz after 1938, Barragán does not ade-quately explain the origins of the po liti cal differences between east and west before that period The roots of east– west divi-sions, I argue, can be found in the built landscapes of roads and oil camps constructed by Standard Oil Com pany in the 1920s and 1930s Geography shaped the approach taken by Standard Oil

in its development strategy and, subsequently, the construction of eastern Bolivian cultures that gazed away from the western high-lands and the large Aymara and Quechua populations that reside there, and toward the Western Eu ro pean and North American cap i tal ist markets In that way, the east identified more with pre-vailing ideas of global cap i tal ist integration Others wanted to protect Bolivia’s natu ral resources from continued foreign exploi-tation, which had increased the country’s economic (and po liti-cal) de pen dency on the developed cap i tal ist nations

While shaping the eastern lowlands, oil instigated the largest international war in Latin Amer i ca in the twentieth century The Chaco War between Bolivia and Paraguay in the 1930s was a piv-otal moment in Bolivia’s history that “made the Revolution of 1952 inevitable.”11 I have argued that the conflict was a war for oil, though not in the ways in which it has been depicted.12 The need for the increasingly strategic resource drove Bolivia eastward toward the Paraguay River to gain an outlet to export oil across the Atlantic Ocean The defense of the oil fields during the war, despite the loss of significant territory, gave Bolivians a victory on which to build their nation after the war Still, as James Dunkerly

xiv Oil and Nation

argues, the “sense of common betrayal, shared suffering, a ichaean vision of cowardice and heroism, a generational divide and ideological displacement compounded by the collective trauma of defeat in war,” drove reform efforts in the postwar period that culminated in the National Revolution of 1952.13

Man-Oil contributed to the Chaco War and its aftermath in other ways First, the demand for oil during war time changed the per-ceptions of many about the wisdom of granting concessions to for-eign companies, especially when Standard Oil declared neutrality

in the conflict and did not increase production for the war effort Second, the site of the oil fields, at first far from the front lines, became a strategic target for advancing Paraguayan troops and the focus of debates during peace negotiations And third, the geography, climate, and diseases of the oil regions contributed to Bolivia’s losses, as did the racial constructs that permeated the oil fields and front lines Bolivia’s entrenched oligarchy of mine owners

and hacienda owners in La Paz, known collectively as the rosca,

seemed out of touch with the country and its mostly indigenous populations, leading to demands for social changes after the war The historiography and lit er a ture of the Chaco War in the 1930s and 1940s was highly critical of the liberal economic and po liti cal order that the authors of dozens of novels, poems, and autobiog-raphies blamed not only for the war but for all of Bolivia’s po liti-cal, social, and economic prob lems.14

Oil and the role it played during and after the Chaco War shaped the Bolivian National Revolution of 1952 Scholars have written much about the role of miners and indigenous peasants in the revolution, and for good reason Tin miners and indigenous peasants had strug gled in the highlands for de cades to improve their living and working conditions and to gain basic rights, such

as access to education Many scholars have studied the strug gle of the highland indigenous peoples in Bolivia over the course of the late nineteenth and early twentieth centuries to bring attention

to a sector formerly portrayed as passive subjects exploited by

landowners, mine owners, and the state.15 Laura Gotkowitz ened the scope of this work and demonstrated that indigenous groups throughout the highlands were instrumental in the Revo-lution of 1952, while acknowledging their limits to social mobility after the revolution Others, such as James Dunkerly, studied the role of labor unions— and especially the Trotskyite tin miners—

broad-in the revolution Robert Alexander notes the revolutionary lbroad-inks forged in the mining camps, reminding us that indigenous peoples worked in the mines as well as on the land and maintained con-nections between the two worlds, which grew in importance during the revolution

I argue that oil also shaped the revolution Indians and miners, and Indian miners, fought the army in the highlands in April 1952 and achieved a quick victory over the military and the La Paz oli-garchy But the middle- class Chaco War veterans who controlled the revolutionary state apparatus believed that oil, and not tin, would provide the economic base for Bolivia’s future Economic

in de pen dence drove early revolutionary policy and discourse, with the first president, economist Víctor Paz Estenssoro, saying,

“If the government of the national revolution can consolidate itself with a sufficient economic and social base, the reactionaries, the

Rosca, and their servants will have lost all hope of returning to

power in Bolivia.”16 But attempts to reconcile the demands of the revolutionary miners with the moderate vision of the party lead-ers contributed to further instability and eventual conflict

If the Chaco War was a war for oil, and the Chaco War made the revolution “inevitable,” then we should look at the role oil played in the revolution Together, the importance of oil to the Chaco War and its outcome; the actual and mythological role of the state oil com pany in the postwar years as part of the reformist, nationalist, and revolutionary discourse; and the significance of oil to the revolutionary state form a largely untold story While major social achievements did take place after 1952, the revolu-tionary state decapitalized the new state mining com pany and

xvi Oil and Nation

by opening the sector to foreign companies to increase tion Left ists such as Guillermo Lora decried the latter act as “nation- selling.”17

produc-While focusing on oil, omitting either the mining sector or the indigenous populations would ignore the largest segment of state revenues in the twentieth century and the majority of the coun-try’s population To do so would also provide an incomplete story

of the oil sector Oil policy grew out of mining codes and ence with mining and other natu ral resource extraction, while the strug gle by indigenous populations for land, education, and po liti-cal inclusion shaped economic development policies and warped the country’s hierarchical social structure If mining and the strug gles of the indigenous populations are so impor tant to Boliv-ian history, then why focus on oil? Oil hastened transformations

experi-in rural experi-indigenous communities, urban built environments, and the mining economy Oil contributed to regional, racial, and other per sis tent po liti cal, social, and economic divisions Elite anxiety over the majority indigenous populations and the distinct geog-raphy of the landlocked Andean country heightened the sense

of urgency to develop the resource Th is anxiety, combined with Bolivia’s impoverished condition, built the foundations for war, nationalization, and revolution that are discussed here Oil became

so impor tant to the country that it nationalized this resource fi rst, before the tin mines, even though mining was by far the largest source of state revenue at the time; this has to do with both the

nature of oil and the po liti cal power of the oligarchy, the rosca Oil

was necessary to develop domestic industry and to build military strength Bolivia’s mining equipment, electricity generation, trains, tractors, and automobiles required oil or coal, but coal was mostly absent from Latin Amer i ca For marginal Bolivia to become a

modern nation, it needed to break the stranglehold of the rosca,

and it needed oil

Bolivia in Historical Context

Bolivia’s extraordinary and complex history is woven through with the majority indigenous populations and the country’s rich natu ral resource base The Spanish Empire extracted silver from the mountain at the famed Imperial City of Potosí in colonial

Upper Peru using Natives in corvée labor regimens called “mitas,”

after Incan practices Many thousands of Indians died in the mines while the silver went overseas to finance a warring and fre-quently bankrupt empire The silver began to run out in the late eigh teenth century, contributing to economic decline in the cen-tral Andes and growing unrest among the indigenous peoples and the Creoles ( those of Eu ro pean descent born in the Amer i cas) The long and brutal wars of in de pen dence in the early nineteenth century, following on the heels of the Tupac Amaru and Tupac Katari revolts in the late eigh teenth century, devastated the area

of Upper Peru that became Bolivia, named for the liberator Simón Bolívar after the wars.18 A de cade of fighting across the Altiplano— the high exposed plains over thirteen thousand feet in altitude between the eastern and western ranges of the Andes— laid waste

to villages, farmlands, and animal herds, while the mines flooded

It took the fledgling nation of Bolivia de cades to recover

In the nineteenth century, Bolivia faced obstacles to growth the size of the Andes Mountains, which divided the country in two The new republic did not possess the financial resources to restart the mines or to develop other industry Transporting goods over the Andes by mule and llama was costly, time consuming, and dangerous Much of the northern and eastern territory was unmapped, sparsely inhabited, and controlled by autonomous indigenous groups that had never been conquered by Spain In the

xviii Oil and Nation

late nineteenth century, Bolivia lost its seacoast in a war with Chile that left the country landlocked and even more geo graph i cally iso-lated The introduction of steam- powered technology in the late nineteenth century allowed silver mines to reopen and invigorate

an economy based until then on an Indian head tax Silver mining began to slowly revive the economy in the 1860s, followed by a short- lived rubber boom and then tin mining Railroads ran west

to the Pacific to export ore, haciendas grew and encroached on ditional communal lands throughout the highlands, and ethnic tensions rose

tra-Bolivia was a poor country in the 1800s The majority nous populations living on Bolivia’s Altiplano and in the central highlands worked the land and the mines in neo co lo nial and semifeudal conditions, as their ancestors had done for centuries Indigenous peoples strug gled with the state and local landowners for land and basic rights, negotiated changing social conditions, and survived, while a small group of white and mestizo elites, descen-dants of the Eu ro pean colonists, ran the government in favor of the interests of the mines and haciendas that they owned Today, nearly two- thirds of Bolivia’s populations identify themselves as indigenous The two major indigenous language groups are the Quechua and Aymara of the Bolivian highlands, who constitute more than 50% of Bolivia’s ten million inhabitants.19 Thirty other ethnic groups live scattered throughout Bolivia’s vast lowland territories The Chiriguanos are the majority ethnic group in the lowlands.20

indige-Nineteenth- century Bolivian politics mirrored trends

through-out Latin Amer i ca, where liberal and conservative caudillos

(regional strongmen) battled for control of the executive branch of government In Bolivia, there was little to distinguish the Conser-vative Party from the opposition Liberal Party They were both exclusive parties of white elites with similar policy objectives, which we would identify as classic liberal economics Both parties focused on expanding the mining sector, building infrastructure

to export ore to the Pacific Ocean, and gaining control over the large communal indigenous landholdings in the highlands, which they labeled unproductive Through corruption and occasional vio lence, the Conservatives held on to power in the capital city, Sucre, after the resurgence of the silver- mining economy in the 1860s The frustrated Liberals eventually or ga nized a rebellion The 1899 Federalist Revolution of the Liberal Party ended Conser-vative rule and shifted both economic and po liti cal power north

to La Paz and the tin mines.21 Tin became the major export and primary source of government revenues in the early twentieth century as silver declined, though the Indian head tax remained

an impor tant source of revenue for de cades The Liberals, and shoot parties who called themselves Republicans and Genuine Republicans, held power in La Paz until the middle of the 1930s During that period, Bolivians discovered oil in the sub- Andes.The Cenozoic- era Andean uplift that slowly drained the Atlan-tic Ocean eastward and left the Amazon Basin behind gave South Amer i ca its pres ent topography.22 In between the high mountains and the expansive lowlands were the geo graph i cally complex foot-hills of the eastern sub- Andes, a chain of north– south mountain ranges compressed by power ful geological forces into deep creases scrunched like an accordion The oil was entombed for millennia under impervious layers of rock, referred to by petroleum geolo-gists as capstone, deep inside the sub- Andean zone According to one geologist, the zone is “characterized by per sis tent longitudinal, overthrust asymmetrical anticlines that have eroded to a distinc-tive topography of parallel ridges and valleys.”23 Anticlines are domed formations coveted by petroleum geologists, but the sub- Andean terrain is difficult to traverse due to the thick vegetation and steep- walled valleys Even today, few roads connect eastern Bolivia to the west, and those that do endure flooding and mud-slides throughout the rainy season, making access to the oil regions challenging and costly East of the sub- Andean zone and south of the Amazon Basin lies the Gran Chaco, a grassy and

off-xx Oil and Nation

wooded savanna classified as dry tropical forest that crosses the borders of Bolivia, Paraguay, and Argentina.24 The sandy and clay soils of the Bolivian Chaco washed down from the Andes over millennia, leaving poor growing conditions for the indigenous groups that had migrated there The Native peoples fished, hunted, and gathered edible plants in their dispersed communities.Oil traveled upward through the faults and cracks of the sub- Andean geography and out to the surface of the deep canyons and hillsides, where people discovered it and found uses for it Natives smeared the oil on themselves and on their animals to heal wounds They ingested it to cure sicknesses They used it to light torches and to light the ends of the arrows they fired at their enemies’ huts Spanish conquistadores knew of Bolivia’s oil, as did ranchers in later times This story begins in 1896, when a medical doctor, on a secret government mission, discovered an oil spring and started a kerosene com pany with the intention of bringing Bolivia out of the darkness of poverty and backwardness and into

a modern enlightened world

Overview by Chapter

Chapter 1 questions how the experiences of Bolivia’s petroleum pioneers shaped the direction of oil policy, while analyzing the obstacles the pioneers faced developing a viable oil sector The attempts by the pioneers to find and exploit oil exposed them to the diverse geography, biota, cultures, and po liti cal persuasions

of this landlocked Andean country Because of this, the chapter serves as an introduction to Bolivian history and to the formation

of oil nationalism The petroleum pioneers were mostly Bolivian and Chilean, although others, including Eu ro pe ans and North Americans, found their way into the remote southeastern oil zones Many were speculators, but some, like Dr. Manuel Cuéllar of Sucre, had serious intent to develop viable petroleum enterprises None imagined the difficulties that awaited them, which serve to

demonstrate some of the structural prob lems that have thwarted Bolivian economic development While domestic businessmen strug gled to drill oil, the country’s leaders focused mostly on their personal mining and land interests in the highlands, ignoring a sector with the potential to transform the nation Those who lam-basted the government for this oversight became the forebears of Bolivian oil nationalism, the sentiment behind using oil to build the nation.

Chapter 2 examines the ways in which John D Rocke fel ler’s Standard Oil Com pany (New Jersey) was able to gain control over Bolivia’s most impor tant oil concessions, and the ways in which its activities constructed new landscapes and identities in eastern Bolivia The isolated oil regions built connections to the outside world through the transportation and communication infrastruc-ture erected by the oil com pany New businesses arose to ser vice the oil camps, and cultural influences from outside found their way into the isolated Bolivian Oriente (East) Eastern Bolivians began to construct separate and distinct identities from the west-ern highlanders And as the state began to pay more attention to the east and the oil sector as demand for oil grew during the 1920s, conflicts between the state and Standard Oil also grew, as the oil com pany, with diff er ent priorities than Bolivia, did not meet that demand The tensions reached a breaking point with the collapse

of the tin market at the onset of the Great Depression Po liti cal and legal battles stretched on for de cades and created more divisions, not only between the state and Standard Oil but also between the eastern lowlands, where the oil was located, and the western high-lands, where the government, increasingly seen by the eastern regions as either neglectful or obstructionist, was centered Oil nationalism in the east took on diff er ent tones than oil nationalism

in the west, although both regions had grand ideas about oil’s potential to build the nation

Chapter 3 asks how the Chaco War was, and was not, a war for oil, and questions the ways in which petroleum shaped the

xxii Oil and Nation

conduct and outcomes of the war The chapter reexamines the causes of the war, discusses the oil politics, and reveals the develop-ment of social movements that agitated for nationalization of the oil reserves Bolivians discovered the strategic and social signifi-cance of their oil during the campaign as motorized vehicles sped into the Chaco Boreal, as Paraguayans advanced toward the oil camps, and as Bolivians— mostly indigenous highland conscripts— shed blood defending the oil reserves The war remade the country’s oil into a sacred symbol of the nation The war also fundamentally reshaped relationships between the indigenous highlanders and the state, labor relations, and the role of the state in the economy.Chapter 4 examines the ways in which the foundation of the state oil com pany and the cancellation of Standard Oil’s contract transformed the role played by the state in the oil sector As the post- Chaco governments seesawed between reformers and the tra-ditional oligarchy, the semiautonomous state oil com pany accom-plished remarkable achievements in the areas of production and distribution The experience demonstrated that Bolivians could do

a better job at exploiting the country’s resources than could a eign com pany, bolstering the prestige and influence of the oil nationalists But to demonstrate that point, the state oil com pany had to overcome tremendous internal divisions, which foreshad-owed the revolutionary state’s prob lems running the country.Chapter 5 discusses the role oil played in the National Revolu-tion of 1952 While the tin miners who fought in the revolution achieved their goal of nationalizing the large tin mines, the revo-lutionary state defunded the new state mining com pany in favor

for-of the state oil com pany Tin revenues bolstered oil exploration and distribution networks to the culmination in 1954 of Bolivian energy in de pen dence The state oil com pany not only satisfied domestic demand but also began exporting small quantities of oil Oil also became a tool for the revolutionary state to gain credit from international lenders, but using oil as a bargaining chip allowed the United States to gain influence and enact loan

conditions that threatened the state oil com pany, oil nationalists, and the revolution itself.

Chapter 6 is a brief overview of the hydrocarbon sector from

1956 to the pres ent The active role played by the state in the carbon sector continued to divide eastern lowlanders from La Paz over the distribution of revenues and control of the reserves The chapter examines the ways in which the fight over control of the oil reserves shaped conflicts that continue to divide the country.The conclusion sums up the importance of oil to understand-ing the regional, po liti cal, racial, and environmental conflicts that mark Bolivia’s landscape today Even as the hydrocarbon resources have given the state the means to fund social programs, improve its international economic standing, and diversify its economic base, the state oil com pany requires new sources of oil and natu-ral gas in order to continue to serve this role, putting the state at odds with populations, usually poor and indigenous, affected by extraction

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chapter 1

Discovery

The Sucre Pioneers

Dr. Manuel Cuéllar read and reread the letter from his brother, José, with alarm The year was 1896 in Bolivia’s capital city, Sucre, located at nine thousand feet in a beautiful valley in the central eastern Andes José was living in Asunción, the capital of Para-guay, as a fugitive from justice after murdering a Chilean diplo-mat whom he had accused of having an affair with his wife.1 José had written the letter in Quechua, the language of the Inca Empire spoken by José and Manuel’s mother and still spoken by 30  percent

of Bolivia’s population He used Quechua to hide the letter’s contents from the Paraguayans, few of whom would have understood the Andean language José warned his brother of Paraguayan troops crossing into Bolivian territory in the lowland plains of the Chaco Boreal, an area in dispute between Bolivia and Paraguay since the middle of the nineteenth century Dr. Cuéllar deci ded to act

on the information

Cuéllar, like his father, was a surgeon trained in Paris Also like his father, who had seen action in the Bolivian military, Cuéllar had a strong sense of nationalism in a country that was deeply divided by race, ethnicity, class, and region Nationalism, accord-ing to social anthropologist and theorist of nationalism Ernest Gellner, is “a po liti cal princi ple, which holds that the po liti cal and national unit should be congruent.”2 Bolivia was anything but A majority indigenous country, the indigenous people had been

2 Oil and Nation

marginalized, subjugated, and discriminated against since long before the founding of the republic Most of Bolivia is lowland tropics, but most of the population live in the central valleys and high plains of the Andes Mountains The cultural and geographic diversity led to isolated, separate, and competing regions and iden-tities, while the minority ethnic and racial rule led to per sis tent vio lence and conflict Gellner went on to define nationalist senti-ment as “the feeling of anger aroused by the violation of the princi ple [nationalism], or the feeling of satisfaction aroused by its fulfillment.” Few Bolivians felt satisfaction at the state of their country in the late nineteenth century Some would or ga nize into nationalist movements, defined, again by Gellner, as “actuated by

a sentiment of this kind [nationalist].” The nationalist movements

included groups formed by Dr. Cuéllar and his patriotic sucreño

(residents of Sucre) brethren

Dr. Cuéllar hoped to cure his nation of its many social and logical ills In 1895, along with other doctors and faculty of Sucre’s prestigious San Francisco Xavier University, Cuéllar founded a medical institute The institute contained the country’s first bac-teriological laboratory at a time when many still questioned germ theory Doctors at the laboratory developed vaccines that greatly improved health conditions in Sucre’s department of Chuquisaca, a large area stretching from the Andes to the southeastern lowlands.3

bio-The institute also had scientific sections for metallurgy, omy, and chemistry, and a library that can still be visited As the Instituto Médico Sucre (Sucre Medical Institute) began its diffi-cult task of improving Bolivia with the latest medical science, Cuéllar became consumed with stopping Paraguay from threat-ening the country’s territorial integrity He saw both missions as having the same ultimate goal of building a strong and modern Bolivia

astron-Bolivia had suffered a major territorial loss just fifteen years earlier in the War of the Pacific Chile took Bolivia’s nitrate- rich department on the Pacific coast, leaving the country landlocked

Losing territory to Paraguay in the east would have been painful with the lingering memory of the stinging loss to Chile in the west

Dr. Cuéllar deci ded to take his brother’s letter to Bolivia’s dent, Mariano Baptista Caserta (in office 1892–1896), and offered

presi-to lead an expedition disguised as a scientific mission presi-to verify the alleged Paraguayan intervention.4 The president referred the matter to his Council of Ministers, which approved the expedition but provided little funding The doctor would pay most of the costs for the supplies, guides, and mules out of his own pocket

Although the Council of Ministers was certainly concerned about the Paraguayans, Bolivia had few resources to contribute to the mission The silver- mining economy of the famed mountain

of Cerro Rico at Potosí, which had helped feed the coffers of the Spanish Empire in the colonial era, had collapsed during the wars for in de pen dence in the early 1800s The mines had filled with water and would require heavy capital investment to drain them New steam- powered technology drove a resurgence of mining in Potosí and throughout Latin Amer i ca in the latter half of the nine-teenth century In Sucre— the administrative center for the mines

of Potosí— a particularly self- aware group of elites arose, who modeled themselves on high Eu ro pean culture.5 But by 1896, when

Dr. Cuéllar began the expedition east from Sucre, the silver ore was again depleted, along with the country’s trea sury, and the elite became much less self- assured

The expedition spent weeks crossing the arduous terrain of the sub- Andean mountains, composed of ten thickly forested chains running from north to south between Sucre and the lowland plains of the Chaco Boreal While lush and beautiful, travel across the mountains was challenging Hardly any roads ran through the deep valleys or along the steep ridges, and those that did would wash out in the rainy season, which varies greatly in intensity between November and April Few towns existed in the area, and many of the indigenous populations shunned outsiders as a result

of missionary activity and colonization over the centuries that had

4 Oil and Nation

violently encroached on their lands and introduced devastating epidemics A series of missions ran like a line of forts along the frontal range of the sub- Andes and protected colonizers from groups such as the Tobas and Matacos, who controlled much of the area.6 Some indigenous people took advantage of the missions and the ser vices that they provided Coincidentally, the line of missions would closely mirror the later location of oil camps Natives attacked Cuéllar’s expedition on the edge of the Chaco near the town of D’Orbigny, named for the French scientist who had explored the region earlier in the nineteenth century and provided its first paleontological and geological studies Cuéllar retreated to Sucre without learning of any Paraguayan advance into the disputed territory, although the topic would recur until war broke out in the 1930s

The trip back must have been even more challenging The group, dejected at their failure, had to climb thousands of feet up primitive trails into the subtropical forests Some of the mules devel-oped sores from carry ing the heavy loads over the poorly main-

tained paths Dr. Cuéllar’s guides suggested a remedy The cambas— a

general term for people living in eastern Bolivia— showed the doctor

a nearby spring with a dark viscous liquid oozing from the ground.7

They applied the liquid to the sores to help them heal Dr. Cuéllar suspected that the substance was petroleum and brought samples back with him for testing

Laboratory analy sis confirmed that the substance was leum and of a high quality Dr. Cuéllar gathered investors to start Bolivia’s first oil com pany Like the medical institute and the mis-sion to defend Bolivia’s territorial integrity, the oil com pany had a grander nationalist scope Cuéllar and his partners hoped to mod-ernize their country with the petroleum they had discovered (or, more accurately, been shown) The other investors also lived in Sucre and participated in scientific and civic organ izations, such

petro-as Sucre’s Geo graph i cal Society Many had been educated in Eu rope and influenced by con temporary pseudoscientific concepts, such as

the positivism of Auguste Comte, which was popu lar in Latin American elite circles at the time The positivist slogan of Order and Pro gress can still be found on Brazil’s flag These white and mestizo elites of Sucre lived in a country that had a majority indigenous population, that was mired in underdevelopment and poverty, and that had recently lost its seacoast to Chile in a mili-tary conflict They may have found it easy to equate national weakness with racial constructs, as suggested by the Eu ro pean ideologies, like positivism and social Darwinism, to which they had been exposed Despite the influence of ideas of racial degen-eracy proposed by pseudoscience, or perhaps because of it, the Sucre elite strived to make Bolivia more like the Eu rope that many of them had witnessed and admired Dr. Cuéllar and the medical institute even commissioned Gustave Eiffel to design a smaller model of his famous Pa ri sian tower for the city of Sucre

in 1906 The replica had a meteorological station on the top form Today, visitors to Parque Bolívar can climb the tower to admire views of the city

plat-Cuéllar formed plat-Cuéllar y Cía with Ernesto Reyes Molina and José Prudencio Bustillo Reyes, from an elite family with large landholdings, was a founding member of Sucre’s Geo graph i cal Society.8 The com pany applied for two petroleum concessions from the government, which were granted in 1899 The men planned to haul barrels of crude on the backs of mules from the seepage at Mandiuti, where Cuéllar had “discovered” the petro-leum spring The analy sis he had obtained from a laboratory in the United States revealed a sweet (sulfur- free), light crude, excel-lent for producing kerosene for lighting, which was the largest worldwide use for petroleum at the time.9 Kerosene became the replacement fuel for lighting, as global whale hunts had decimated the whale population, putting the cost of whale oil out of reach to most people

The business partners sent Prudencio into the region to scout for more sources of petroleum During that expedition, the wildcatter

6 Oil and Nation

allegedly lost his life to a wildcat.10 It is more likely— according to Roberto Querejazu Calvo, who wrote a biography of one of the oil business partners— that Prudencio died from a tropical disease

at the Santa Rosa de Cuevo mission in Macharetí Tales of the tropical region told by explorers and adventurers fired the oil-men’s imaginations even as they stymied interest in investing in the harsh area The South American tropics had gained the nick-name Green Hell, as travelers from Eu rope and the United States constructed narratives of a primitive and dangerous territory that thwarted the advance of Western civilization— a region replete with diseases, hostile Natives, and dangerous animals like ana-condas and jaguars While many disparaged the region, others found much to admire The counternarrative of the tropics, espe-cially the Amazon Basin, as a “Green Cathedral” or an Eden fueled diff er ent emotional responses yet, as Candace Slater argues, tended

to neglect the presence of the many people who lived there by imagining a pristine wilderness, which led to dangerous miscon-ceptions.11 The emerging designation of the southeastern Boliv-ian subtropics as an oil region would create diff er ent narratives still, ones that called to mind the gold lust of Spanish conquista-dores in this neo co lo nial era Like the conquistadores, the oilmen would see the region and its inhabitants as obstacles to conquer and subdue in pursuit of profit And like the many that died in pursuit of El Dorado, oilmen like Prudencio would sometimes find the obstacles insurmountable

Harvey Bassler, an oil geologist with the U.S Geological Survey, explored Bolivia’s oil regions with a team of geologists in 1921 and, despite the treacherous conditions, proclaimed the land “miracu-lous” with “fabulous wealth waiting for men to exploit.”12 Bassler had taken a leave of absence from his government job and was representing the Car ter Oil Com pany, an affiliate of Standard Oil The nature found by explorers and travelers in Bolivia was sometimes inviting— the beautiful semitropical forests and mountain

views— and sometimes deadly The president of the Royal Geo

graph-i cal Socgraph-iety called a descrgraph-iptgraph-ion of northeastern Bolgraph-ivgraph-ia by the famous British explorer Major Percy Fawcett “a picture of famine and death, with a background of insect bites.”13

Fawcett, who dis appeared searching for El Dorado (or as he called it, the lost city of Z) in the Brazilian Amazon in 1925, had explored and mapped Bolivia’s northeastern regions for a bound-ary commission after the 1903 Acre War Bolivia fought Brazil over land rich in rubber trees and ended up losing yet more national territory over a natu ral resource, as it had to Chile with its nitrates

on the Pacific coast In a 1910 speech to the Royal Geo graph i cal Society about his work in Bolivia, Fawcett stated:

Indian ethnological details are most complex West of the

Cordilleras are the Quichuas [sic] and Aymaras, descendants

of the Incan empire; east an infinity of small tribes distinct

in feature, language, and customs Hovering on the confines

of civilization are the savages, debased and intelligent, dwarfs and well developed, usually cannibals, and preserv-ing a revengeful hostility against every body outside their own tribe In the heart of the continent they are beyond the pale of communication, and their origin is shrouded by that veil of conjecture behind which lies all Indian history prior

to the last Incan dynasty.14

In response to the En glishman’s portrayal of his country, Bolivian consul to London, Col o nel Pedro Suárez, stated, “Major Fawcett has told you a great deal about the wild animals and insects he has met with during his explorations in some of the more outlandish places he has passed through, but I can assure you that the towns are not so bad as you may imagine from what he has said It is quite true that there is a great number of insects and wild animals, but

in regard to the savages, they are greatly reduced in number now.”15

8 Oil and Nation

Suárez did not elaborate on who these “savages” were, or how they had been reduced in number, but his comments would have been interpreted within the prevailing currents of social Darwin-ism, which predicted the eventual disappearance of certain races and nationalities Social Darwinists misapplied Darwin’s ideas on survival of the fittest species to human socie ties, ethnicities, and even countries Bolivia, a majority indigenous country in a tropi-cal zone, did not fare well in this pseudoscientific racial discourse, and many of Bolivia’s elites agreed with the negative assessment while privileging themselves.16 For example, Bolivia’s 1900 national census stated incredibly that due to famine, epidemics, and chronic alcoholism, the “indigenous race” was on its way to extinction The authors of the census added, “It is up to the reader to decide whether this will be a good thing, given the fact that the cause of backwardness in our civilization is the indigenous race, which is particularly unresponsive to innovation and pro gress.”17 A 1920s president, Bautista Saavedra, stated that if “we must exploit the

Aymara and Qhechwa [sic] Indians for our benefit or exterminate

them because they are an obstacle and a hindrance to our gress, let us do so frankly and energetically.”18 The Aymara and Quechua of the Bolivian highlands— who, far from disappearing, make up a majority of Bolivia’s population today— had a longer history of integration with the Eu ro pean cultures than did the smaller and dispersed indigenous groups of the lowland Amazo-nian basin and Chaco Boreal The daily contact and integration between the indigenous peoples and the whites in the highlands added to elite anx i eties and served as a justification for the ongo-ing vio lence against the indigenous populations in this age of social Darwinism

pro-Bautista Saavedra, mentioned above, was a lawyer and owner from the La Paz area before becoming president He had gained national notoriety for defending hundreds of indigenous men on trial between 1900 and 1904 over a massacre committed during the 1899 civil war Named the Federalist Revolution, the

land-civil war was fought between members of the Liberal Party— led

by Col o nel José Manuel Pando and backed by tin- mining interests from the La Paz region— and the Conservative Party, backed by the silver miners of Sucre The Liberal Party had been shut out of politics by the Conservatives, but the Conservatives were losing clout as the silver economy declined

The Liberals recruited an army of Aymara Indians led by Pablo Zárate Willka, promising to protect their land from ongoing encroachment and to provide better access to education for the highland Indians But after the war, the Liberals moved the presi-dent and national legislature from Sucre to La Paz and put the Indian leaders, their former allies, on trial The trial was a roving spectacle through four highland cities that hardened the social divisions between the races by blaming indigenous savagery and degeneracy for a war time massacre committed by Indians in the town of Mohoza.19 The actual reason for the massacre is still unclear The Indians may have mistaken the victims for enemy troops or may have been retaliating against an act of aggression against the community by their allies in the Liberal army, which was common during the war In any case, the conditions for the indigenous peoples did not improve, as Pando and the Liberals had promised before the fighting Instead, indigenous communi-ties found themselves on the defensive from encroaching land-owners throughout the highlands.20 The Sucre elite, many of whom were opposition Conservatives, also lost po liti cal and economic power after the war Many began looking for new economic opportunities

Dr. Cuéllar and Ernesto Reyes were among them They attracted investors after the fighting was over and formed the Sindicato de Petróleo de Sucre, renamed shortly thereafter the Incahuasi Petro-leum Syndicate The com pany hired a Welsh geologist, Atanasio Pryor Treweek, who conducted at least two explorations into the cordillera east of Sucre in the department of Chuquisaca.21 Tre-week submitted a technical report to Dr. Cuéllar on July 28, 1911,

10 Oil and Nation

which stated the potential for an oil reserve in the province of Azero.22 The rock formations contained fossils showing that the area had once been a seabed and therefore might possess the organic ingredients for petroleum.23 The region had both a layer

of porous sandstone, which could hold petroleum, and a layer of shale, which could provide a cap for any oil fields Treweek had located (or been shown) seepages in the nearby pueblos of Caman-daiti, Capirenda, Madiuti, and Vitiacua, and in the mission at Macharetí He considered the area to be the same geological for-mation ( today called the Tarija Basin) that extended south into Tartagal, Argentina, the location of a known oil field He recom-mended bringing in equipment from Argentina over the road from Yacuiba, on the border, to the small eastern city of Santa Cruz.24

Treweek died sometime around 1912, some say from a tropical disease but more likely, according to Querejazu Calvo, from a combination of sunstroke and whiskey while on one of his scout-ing trips.25 After Treweek’s death, the Incahuasi Petroleum Syndi-cate hired a North American geologist and engineer, Charles Hayman, to continue the technical work He submitted a report

on November 26, 1913, that echoed many of Treweek’s findings.26

Hayman expressed glowing optimism for the future of Bolivia’s oil industry

Cuéllar’s other partners included Javier Saavedra; Adolfo Costa

du Rels, who wrote the popu lar 1931  novel Bewitched Lands;

Ismael Arana Tardío; Enrique Jáuregui Rosquellas; and Dr. Carlos Calvo, who was a lawyer and national deputy.27 In 1899, the Sucre entrepreneurs obtained concessions of 74,400 hectares from the state.28 Costa du Rels later dedicated his 1931 novel to some of his oil com pany partners:

To the memory of Ernesto Reyes Molina, one of the first to discover petroleum in Bolivia, who died poor and forgotten; Atanasio Pryor Treweek, En glish engineer, who sleeps his

last sleep in Tarairí, among the petroleum- yielding fields of the Bolivian Chaco; Ismael Arana Tardío, an old gentleman- dreamer of Basque descent He died poor, his heart crammed with hopes and illusions These last two were my compan-ions on expedition and adventure While they spied out the secrets of nature in a ferocious aspect, I watched human pas-sions well up, increase, and storm like the brimming rivers of our Amer i ca, which carry away those who know not how—or are unable—to resist them.29

In the novel, Costa du Rels traveled with Treweek to a hacienda in the petroleum region, where they hunted spotted bears, encoun-tered exotic (and sexually permissive) Natives, and discussed how best to deal with Paraguayan incursions at the border They found oil throughout the area Though it is a fictional account, the petro-leum discoveries and the descriptions of Treweek, who suppos-edly loved whiskey and hunting, had more than a hint of truth to them Certainly the attitudes toward the people and the land mir-rored the author’s own views He described a wilderness to be con-quered and civilized along with the Native peoples Costa du Rels saw oil as one more piece of the civilizing mission that he dreamed would lift Bolivia from its backwardness He wrote:

Highways would stretch out like white ribbons across the mysterious Chaco, as well as snakelike steel rails at which the rattlesnakes would strike The whistle of the locomotive would dispel the forest sorceries; two hundred wells at inter-vals between Villa- Montes and Santa Cruz, and enormous gushers would bespatter the astonished thunder- hatching clouds with petroleum The land would be tamed, disci-plined, and conquered, and its fierce inhabitants gradually forced back northeastward toward Brazil In that way, we would be serving the country, serving in the most civic sense

of the word.30

12 Oil and Nation

Besides partnering in the Incahuasi Petroleum Syndicate, Costa

du Rels obtained a 200,000 hectare oil concession of his own in Azero, which he sold to U.S investor Spruille Braden in 1917.31

In 1914, Dr.  Cuéllar traveled to Paris, where he met with Simón Patiño, the Bolivian tin baron, to ask for financing Patiño owned tin mines in Bolivia and Malaysia, at one time controlling

25  percent of the world’s tin output, as well as owning smelters in London and Germany He moved to Eu rope in 1924 after a heart attack, which he claimed kept him from returning to the Bolivian highlands, but also in anger at tax policies that targeted the tin mines By 1930, he owned nearly half the world’s tin- smelting capacity.32 During World War II, Patiño was one of the wealthiest men in the world and gained the nickname Rocke fel ler of the Andes Patiño lent Dr. Cuéllar sixty thousand pounds sterling for his oil com pany Cuéllar used the funds to buy drilling equipment from the industrialist Percival Farquhar and to hire a U.S engi-neer In 1916, the com pany drilled a well to the depth of one hun-dred meters near Charagua, but with no success Patiño became the majority shareholder of the com pany, which changed its name back to the Sindicato de Petróleo de Sucre, and kept it afloat into the late 1920s

Dr. Cuéllar was in some ways representative of the Latin ican elite of his time and in some ways a pioneer He brought the latest medical and scientific ideas from Eu rope after receiving a French medical degree in 1891, and he applied them to his coun-try with nationalistic fervor.33 Cuéllar is known as the father of modern surgery in Bolivia and, like his father before him, was chancellor of Sucre’s San Francisco Xavier University, one of the oldest universities in Latin Amer i ca He founded the Escuela Libre

Amer-de Medicina ( Free School of Medicine) in Sucre, founAmer-ded the Instituto Médico de Sucre (Sucre Medical Institute), and served as director of the country’s Public Health Department During the Chaco War, he served as chief of Sucre’s Zona Militar Sanitaria (Military Health Zone) He was a delegate to the League of Nation’s

Advisory Committee on the Traffic in Opium and Other gerous Drugs, where he defended coca use because of the com-mercial benefits the leaf brought Bolivia He served as president

Dan-of the Sucre Municipal Council, as a national deputy, and as a delegate to the Unión Médica Franco- Iberoamericana (Franco- Iberoamerican Medical Union), later named the Unión Médica Latina (Latino Medical Union) Plus, he ran an oil com pany He

died on December 12, 1945, and the words “descubrió el petróleo

en Bolivia” (discovered petroleum in Bolivia) were carved on his

pink marble mausoleum

Though Dr. Cuéllar claimed to be the discoverer of Bolivia’s petroleum, petroleum had been known in Bolivia for centuries, if not millennia The Guaraní of eastern Bolivia, who called the sub-

stance itani, used it to heal animals, for lighting, as an insecticide,

as a medicine to treat muscle pains and arthritis, and for warfare.34

Cuéllar was not even the first person of Eu ro pean descent to find oil in Bolivia Fermin Núñez— conquistador and captain of the King’s Militia— and Father Álvaro Alonso Barba also “discovered” petroleum in Bolivia, already being used by indigenous peoples.35

The year was 1590, and the Spanish priest, who had an alchemical laboratory in a cave near Tarabuco, thought of marketing the substance But the petroleum’s isolated location made the cost of transport too great when other sources of fuel, mainly wood, were more abundant near the Spanish settlements.36 Captain Fermin Núñez was on a quest for precious metals when he encountered Father Barba and showed the priest the source of the oil The Span-ish captain explored the region for the mythical indigenous king named El Dorado, who could supposedly be found in the equally mythical gold- filled city of Manoa Over time, the name El Dorado became associated with an imagined city of incredible wealth and

a great temptation for conquistadores and trea sure hunters through the ages, including the ill- fated expedition of the En glish explorer Major Percy Fawcett in the 1920s.37 The quest for Boliv-ia’s oil by the early petroleum pioneers in some ways echoed these

14 Oil and Nation

previous quixotic ventures for gold, as the pioneers strug gled to find and produce oil but mostly failed due to a lack of capital and technology, along with some bad luck The state, moreover, did not

or could not provide the assistance that would have made it pos ble for the pioneers to succeed

si-The state did little more than grant concessions si-The ment of José María de Achá, for example, granted Juan Manuel Velarde concessions in the southeastern Bolivian departments of Chuquisaca and Santa Cruz in 1865.38 Eventually, however, the state canceled the concessions for lack of production Velarde attempted

govern-to dig some wells by hand but found only water He retired govern-to his hometown, where, as one author wrote, “he exercised his profes-sion as a lawyer without the risks and dangers of living in a land infested with bellicose Indians.”39 In 1867, two Prus sians obtained concessions in the department of Tarija from the government of the infamous caudillo Mariano Melgarejo.40 The state also can-celed these concessions for lack of production The site would later prove to have one of the richest petroleum deposits in the country Like Father Barba three centuries earlier, the costs of accessing the isolated oil regions presented too much of an impediment to exploit what was at the time a relatively new product with unclear market value Although it granted concessions, the state did not build the roads or railroads that would have been necessary to market the oil, provide maps or other geological information (which it did not possess), or help with marketing or other subsi-dies The pioneers were completely on their own

Other Pioneers

A number of Bolivians and some foreigners obtained oil sions in Bolivia’s tropical and subtropical lowlands Many pur-chased the concessions as a speculative concern, hoping to sell them at a later time if the oil sector grew successful, but others planned to operate oil companies Their stories illuminate the

conces-obstacles to oil prospecting in Bolivia, the tensions between businessmen and the state, and the growing social and cultural divisions between eastern and western Bolivia Other petroleum pioneers from Sucre included Mamerto Urriolagoitia, who obtained two concessions of 1,036 hectares in 1911 in Azero Prov-ince, where Dr.  Cuéllar and Ernesto Reyes held concessions.41

Urriolagoitia’s son, also named Mamerto, would become dent of Bolivia from 1949 to 1951, just before the National Revolu-tion José Prudencio, Jacinto Calavi, and Enoc Echalar obtained small concessions in Azero in 1911.42 One large concession of 25,000 hectares was granted to a woman named Josefa Padilla y Cuevo in the same province.43

presi-The most well known of the Santa Cruz petroleum pioneers was Luis Lavadenz Reyes, who drilled Bolivia’s first oil well Born in Sucre, he studied civil engineering in Santiago, Chile, for two years before dropping out in 1898 to get married.44 He then took a job surveying properties in Santa Cruz, where he was well established

in the upper circles by 1902 A militant of the ruling Liberal Party,

he edited a newspaper and was a founding member of the city’s

Club Social.45 In 1907, he deci ded to travel to Argentina for cal care after contracting malaria, a disease that was rampant throughout the lowlands This meant a long journey on mule to the border at Yacuíba, and then on to Pocitos, Argentina, where

medi-he could catch tmedi-he train to Buenos Aires

Along the way, Lavadenz and his party stopped at a friend’s ranch in the small southeastern pueblo of Saipurú to rest Lavadenz mentioned to his friend, Crisólogo Vaca, that one of the mules had

a large sore on its back Vaca told him of a nearby lake that tained a “miraculous” liquid (petroleum) that would cure the mule,

con-much like the camba guides had done for Dr. Cuéllar.46 Lavadenz brought a sample of the petroleum with him to the National Chem-istry Office of Buenos Aires for analy sis A Dr. Ernesto Longobardi declared it a light, high- quality, sulfur- free crude.47 The firm of Stillwell and Gladding in New York confirmed Longobardi’s