ypfb came into existence following a decree law issued by General Toro in 1936 and took on real importance with the nationalisation of Standard Oil in the following year. For the next 20 years it achieved slow but steady growth until, by the mid-1950s, it had become an important prop to the Bolivian economy, although its scale of operation was still insignificant by international standards. In the next decade, the company suffered from the consequences of Bolivia's dependence on the USA and from competition with Gulf Oil. In 1969, however, ypfb underwent a major expansion with the nationalisation of Gulf and it thus became a significant earner of foreign exchange for the first time. Its economic importance increased further with the completion of a natural gas export pipeline to Argentina in 1972 and with the world price increases of 1973–4. Continuing financial difficulties, however, and the vagaries of Bolivian geology contributed to an increase in problems for the agency. Serious difficulties became apparent in 1977 and have since become increasingly pressing. It is possible that ypfb is once more heading for crisis.

During the whole period YPFB has had to operate in a political environment that could best be described as difficult. Bolivia could never be described as genuinely politically stable for, even when there was continuity in La Paz, there were frequent upheavals in the provinces and severe constraints on many forms of economic policymaking.