Natural Gas Production Networks: Resource Making and Interfirm Dynamics in Peru and Bolivia

Abstract

Economic geographers have largely shown concern about the interaction between extractive industries and local economies by studying how lead firms create economic linkages with national firms. From a global production networks approach, this work looks to deepen the understanding of interfirm dynamics in extractive industries. This work has a critical position over previous research, however, because such contributions do not consider how resources are socioecologically produced. This article shows that the socioecological relations that make natural gas an exploitable resource are critical to study the articulation between global and local firms. The contingent interaction between states, firms, and the biophysical properties of nature set up the conditions for interfirm dynamics because it creates (or does not create) a steady and continuous demand of services to perform specialized activities. This was the case in Bolivia where the neoliberal reforms of the early 1990 s, the massive involvement of lead firms, and the characteristics of natural gas deposits created conditions to develop industry-specific suppliers. Conversely, Peru has not been able to appraise its natural gas reserves and did not set up conditions for such suppliers. Therefore, the resource-making process is crucial for studying how global production networks and extractive industries are shaping the geography of uneven development.