$500 Billion Fuels Latin America’s Oil and Gas Surge

Latin America’s oil and gas industry is soaring, driven by high barrel prices and OPEC’s strategic supply cuts.

Amidst the Ukraine conflict, these elements are propelling new exploratory projects, defying the global trend of reducing fossil fuel reliance.

By 2030, investments in this sector across Latin America are poised to reach $500 billion.

Brazil, Argentina, and Guyana are leading this investment wave, according to a Rystad Energy report requested by Bloomberg Línea.

OPEC’s recent move to slash an additional one million barrels per day (bpd), matched by Saudi Arabia’s parallel voluntary cut, aims to sustain high oil prices.

This scenario elevates the appeal of deep and ultra-deepwater projects, particularly Brazil’s lucrative pre-salt reserves.

These projects offer superior efficiency and lower emissions compared to conventional methods.

Schreiner Parker from Rystad Energy underscores the trend toward advancing only elite projects.

This shift is steered by the rising emphasis on Environmental, Social, and Governance (ESG) criteria.

The Rystad study encompasses current and future projects alongside investments announced by key players and projections by Rystad itself.

Brazil emerges as the investment leader, funneling about $165 billion into its oil and gas sector from 2023 to 2030.

State-controlled Petrobras is spearheading this investment spree, allocating $73 billion for exploration & production (E&P), predominantly in pre-salt projects.

Petrobras CEO Jean Paul Prates champions ongoing investments in oil and gas to cater to global energy needs, focusing on producing environmentally friendlier oil.

The company looks forward to securing exploration licenses for significant areas like the Foz do Amazonas basin.

Petrobras’ Potential

Walter de Vitto of Tendências Consultoria recognizes Petrobras’ potential to develop promising assets from recent auctions.

He highlights the Equatorial Margin as a key area for cost-efficient exploration.

Investment trends in oil and gas vary globally, yet Latin America attracts substantial funds, especially for new deep-water discoveries in Brazil and Guyana.

Rystad forecasts a 17% annual increase in offshore and pre-salt investments in the region.

Notable zones include Brazil’s major fields, Guyana’s Stabroek Block, Suriname’s Block 58, and Argentina’s Vaca Muerta shale gas area.

Experts predict Vaca Muerta’s output might exceed one million barrels per day at its peak in 2033, necessitating continuous development and infrastructural investments.

Argentina’s megacampo is expected to see an 8% yearly increase in investments.

De Vitto points to Vaca Muerta’s infrastructural challenges, especially in transportation, requiring significant investments.

Additionally, he notes that Javier Milei’s election in Argentina, advocating for privatization, could enhance the appeal of new investments.