Increase in oil and gas production in Latin America: responding to the energy crisis and expanding opportunities

Oil and gas production in Latin American and Caribbean countries has experienced an average increase of 9% since February 2022 in response to the energy crisis triggered by the Russian invasion of Ukraine.

Carlos Garibaldi, the executive secretary of the Association of Oil, Gas, and Renewable Energy Companies of Latin America and the Caribbean (Arpel), announced this during an industry conference organized by Vienna’s Organization of Petroleum Exporting Countries (OPEC).

Garibaldi clarified that the extent of the increase varies across countries. Argentina witnessed a 14% rise, while Brazil observed an 8% increase.

On average, natural gas and crude oil production in the region have risen by 9%, with a potential 5% increase in exports.

It is worth noting that 60% of Latin America’s energy supply still relies on hydrocarbons.

Venezuela, among the countries with the highest potential in the region, has managed to enhance its oil extractions after the recent easing of US sanctions.

Garibaldi emphasized that the search for alternatives to Russian oil sources prompted a shift in the US approach towards Venezuela.

The country’s current crude oil production is at its highest since the early 2020s.

However, Garibaldi stressed that the Venezuelan government needs to establish a stable regulatory framework and hold free elections before the lifting of sanctions can be considered.

Regarding Brazil, Garibaldi recommended a continued focus on offshore exploration to sustain production beyond 2027.

He also highlighted the increased shale oil production in Argentina’s Vaca Muerta sedimentary formation.

Experts predict that production could surpass one million barrels per day by 2035, generating significant oil exports for Argentina, potentially reaching US$20 billion in value when combined with gas exports.

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