With over 2.5 billion bbls of proven oil reserves and 16 trillion ft3 of gas, Argentina produced an estimated 804,000 bpd of oil and 4.4 billion ft3/d of natural gas in the early 2000s. In order to keep energy affordable to the poor, however, the government instituted oil and gas price controls, largely stifling investment. Oil production has fallen to 630,000 bpd and gas production has stagnated, sparking blackouts and frequent energy crises. There have been no major discoveries similar to those found in Brazil’s offshore basins.
Under liberal fiscal and petroleum legislation, the land locked country built up reserves of 26 trillion ft3 and exports exceeding 1 billion ft3/d. In 2005, however, Evo Morales was elected President on an entirely different platform and Bolivia’s liberal regime was overturned by a government that nationalised the gas industry.
With 13 trillion ft3 of proven reserves and 1.7 billion ft3/d production, Brazil has been aggressively building a gas pipeline infrastructure in order to tie in widely disparate sources and meet growing internal demand for electricity. The majority of Brazil’s current production occurs in the Campos and Santos basins, located offshore Rio. The 1400 km Gasene line is connecting gas networks in the southeast and northeast sections of the country, creating a nationwide market.
Chile has very few energy resources of its own, importing the vast majority of the coal, oil and natural gas needed to run its economy. Its modest gas reserves are located far from major consumption centres and produce under 200 million ft3/d. Its liberal fiscal and legislative regime has attracted international attention; however, in June 2008, it awarded eight blocks in the Magallanes basin. It has also built the Quintero regasification facility 155 km north of Santiago, and is planning a second facility further north to serve the needs of the mining sector.
With no current oil or gas production, Uruguay is moving to attract foreign investment and experience. It offered 11 continental shelf blocks in its offshore Atlantic region, and drew bids from six operators. Uruguay is also seeking bids for a floating LNG plant.
Peru, with 16 trillion ft3 of proven reserves, has long sought an outlet for its natural gas. Most of the proven reserves have rested in the Camisea gas field, located high in the Andes. In addition, Peru wants to export LNG.
Venezuela, with 151 trillion ft3 of proven reserves, is the undisputed gas giant of South America. During its prime years of oil output a decade ago, when the country was pumping 3.5 million bpd, it also produced over 5 billion ft3/d of associated gas. Most of the gas was used to provide energy to PDVSA and for reinjection to maintain field pressures, but business and consumers also consume approximately 500 million ft3/d domestically. During Chavez’ time in power, however, the oil sector has suffered several setbacks, including strikes, the forced turnover of heavy oil projects and the seizure of petroleum service companies that protested up to
US$ 12 billion in unpaid bills.
Further north, Mexico is expanding its natural gas sector in order to meet growing internal demand. The country has almost 12 trillion ft3 of proven natural gas reserves, half of which is associated with producing oilfields, and the rest with pure gas plays. The shortfall is made up from imports from the US, and LNG. In the last decade, Pemex has also been drilling in the Gulf of Mexico, and has found two large gas fields. The company hopes to drill and develop these resources in order to meet its domestic consumption needs, but exploration and production in the deepwater Gulf is a costly proposition, and Mexico’s constitution limits the participation of foreign oil companies, severely restraining a potential source of capital.
South American natural gas has great potential for petrochemical feedstock and fertiliser. US based CF industry, for instance, wants to build a 10,000 tpd fertiliser plant in Peru. The plant would initially rely on a spur line carrying Camisea gas to a fractionation plant in Pisco. Opportunities for building a continent wide network, however, are not on the near horizon.
Author: Gordon Cope, Hydrocarbon Engineering Correspondent