Latin America is buzzing with exploration and production
activity, especially where countries are teaming up for joint
benefits. Many countries in Latin America are steering away from
costly imports and are instead finding ways to protect their
businesses and consumers against rising energy prices by delving
into untapped resources at home.
Peru should see a new LNG
plant by 2009 that will
supply LNG to much of western Latin America. Spain's Repsol YPF and
US Hunt Oil have agreed to participate in the upstream phase of the
Camisea gas project and develop the Peru LNG project, which will
build the new plant on Peru's southern coast.
Venezuela's PDVSA
teamed up with Spain's
Repsol YPF in September 2005 to handle production of various
reserves in Venezuela. PDVSA will gain access to a portion of
Repsol's Argentinean crude output. Venezuela also has recently
signed pacts with Argentina and Brazil, a move that President Hugo
Chavez hopes will strengthen ties with Latin America and reduce its
dependence on the US as the biggest buyer of its oil.
PDVSA and Brazil's Petrobras plan to
cooperate on a major
expansion of oil and gas activities in both Venezuela and Brazil.
The projects could help boost Venezuela's oil and gas shipments,
while giving Petrobras an opportunity to increase foreign activity.
The Orinoco Belt region of Venezuela is the possible location of
a joint extra-heavy crude facility controlled by Petrobras and PDVSA.
US Chevron, Repsol YPF and several other companies are
eyeing the region as
well. After Venezuela's Energy Ministry draws up a new development
scheme, there could be 27 separate E&P blocks, up from the current
four blocks.
Currently, Mexico's Pemex has a monopoly over exploration and
production for gas and oil, but Mexico is considering opening up E&P
of non-associated gas to the
private sector. Only
Mexican companies will be granted concessions and Mexico's domestic
supplies must be ensured before any exports will be allowed. Mexican
President Vicente Fox is promoting the reform in an effort to reduce
dependence on imports.
Mexican private companies and state-owned Pemex are entertaining
the possibility of jointly investing in upstream natural gas
developments in Bolivia and Peru and
exporting the production
to Mexico. Production at home in Mexico is not expected to be able
to keep pace with demand, so looking to other Latin American sources
for the product would aid in diversifying the country's imports.
Bolivia is one of the few
Latin American countries that has seen its exploration and
production decline; its E&P investment was slashed by 40% in the
first half of 2005. Declining investment in the upstream sector
comes at a bad time for Bolivia since gas exports and total gas
throughput were up for the first half of the year.
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