Latin America has enjoyed robust economic growth in recent years, in part driven by rising global prices for commodities such as oil & gas. The discovery of new gas & oil reserves in Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Peru and Venezuela is causing changes in the relative importance of countries and in the relationships among them. Given the active role played by Brazil on relations among Latin American countries, we will deal with it from the perspective of Brazilian policy. Most of the studies on prospective energy markets, including the World Energy Outlook (WEO), tell us that oil & gas will remain dominant in world energy supply well throughout the first half of this century.
Their predictions assume that, without new energy and environmental policies, demand for oil will continue to grow at 1.6% per year. Natural gas demand will grow even faster, at 2.3% per year. Other experts say that new frontiers in oil & gas will spark innovations in E&P technology: Latin American countries are seeking to diversify energy matrices with a majority having biofuel policies. But, some reports appoint market restraints as the decline in oil reserves, the decrease in growth of industry sector and the new regulations against carbon emissions.
The oil & gas industry is being transformed by the technological developments needed to explore and develop reserve sites and refine liquid fuel. However, Latin America is a rich under-explored hydrocarbon region whose economic future is dependent on the development of secure energy supplies.
But the intensifying need to obtain supplies from more challenging conventional and non-conventional resources will impose very considerable demands on the sector's human, financial and intellectual capabilities.
Foreign investors are faced with E&P opportunities in some Latin America countries, enhanced oil recovery field rehabilitation projects, pipeline distribution and transmission projects, the construction of refineries and transport infrastructure for oil, gas, and derivatives, vessels, liquefaction and regasification terminals, as well as widespread local, regional and international electrification projects.
The current energy landscape and consequences of current policies
The energy situation is very different in the various regions of Latin America. In Central America and the Caribbean, there are greater opportunities for ‘oil diplomacy’. The reason for this is that in those regions several big energy producers cohabit with more than 20 countries that are net importers of crude oil and gas, also, there are its population, its market, its voting power in…
