Latin America has agreed on numerous projects in 2006 that will mean increased exploration and production, as well as improved cooperation between Latin American countries and the rest of the world. Agreements are currently being finalized to jointly develop oil fields in the coming years and foreign companies are solidifying plans to increase their investments in Latin American countries.
There have been significant oil finds in Latin America in 2006, indicating that there will be more as well. New plants will need to be built to accommodate the introduction of ultra low sulfur diesel. Less dependence in Latin America, as in other countries, on imported energy will allow for better "...ability to pursue a broad range of foreign policy and national security objectives," says a report by the Council on Foreign Relations released in October.
Click on the links below to find out about the major events in each region this year.
Brazil
Mexico
Venezuela
Bolivia
Argentina
Panama
Brazil has seen record-breaking production of both ethanol and oil in the second half of 2006. US fuel ethanol imports for August were the highest ever recorded in mid-October, with the bulk coming from Brazil. Oil produced in Brazil by Petrobras was reported in October to have passed 1.9 million b/d for the first time.
Brazil's oil giant Petrobras and partner BG Group on October 4 announced a "significant" oil find in the ultra deepwater Santos Basin, offshore Brazil. Test results indicate that there will be significant light finds in that area and will be a new frontier for Brazilian drilling.
Petrobras plans to more than triple its production of light crude to around 590,000 b/d by 2011, as it moves to substitute more of its quality crude needs from domestic fields.
Petrobras is also in discussions to buy TonenGeneral's majority stake in the 100,000 b/d Okinawa refinery in western Japan, and hopes to conclude the deal before the end of 2006, it said in early October. Early this year Petrobras bought a 50% stake in the Pasadena, Texas, refinery from Belgium's Astra for around $370 million.
Mexican state Pemex announced plans on October 19 to spend $3 billion to introduce ultra low sulfur gasoline and diesel throughout Mexico. During the first phase, Pemex will sell premium-grade gasoline with 30 ppm of sulfur content, down from 250 ppm currently. By January 2007, Pemex is scheduled to sell diesel with 15 ppm of sulfur. Regular-grade ULS gasoline is to go on sale in the third quarter 2008. In order to meet its targets, Pemex said it aims to build 11 new plants at its refineries and modernize a further 18.
Researchers at the Mexican Petroleum Institute have developed technology to improve the quality of ultra-heavy crudes that is safer and cheaper than any of the alternatives on the market. Pemex said in October that the new technology "provides a significant increment in yields of distillates from heavy crudes while eliminating a high proportion of the sulfur, metals and asphaltenes that they contain."
As part of a raft of cooperation agreements, Venezuela agreed in August to produce with China 200,000 b/d in Venezuela's Orinoco heavy oil belt by 2010. China and Venezuela will also develop other mature fields, helping joint PDVSA-Chinese production reach 400,000 b/d by 2011. PDVSA also signed a pact with Iran's Petropars to carry out a joint reserves study on a Venezuelan offshore natural gas block. Venezuelan and Vietnamese energy officials met in early October to discuss possible cooperation in exploration and production, heavy oil projects in the Orinoco belt, and refining.
Citgo, the US-based affiliate of Venezuelan state oil company PDVSA plans to supply 100 million gallons of heating oil, at a 40% discount, to benefit 459,000 Americans in 18 states, up from 181,000 in eight states last year.
All ten foreign companies that prospect and produce oil in Bolivia signed new operating contracts in October, according to the terms of president Evo Morales' nationalization decree, that will allow them stay in the country. Repsol YPF of Spain said it believes that the new operating contracts it signed with Bolivia will gurantee the return on its current and future investments.
Repsol YPF said in October that it plans to invest $2.34 billion in Argentina in the 2007-09 period, with an aim to build reserves and increase production by developing marginal areas and using new technology to step up output at maturing fields.
Argentina's Energy Secretariat issued a decree on Oct. 2 tightening controls on the export of diesel fuel, gasoline, fuel oil and other petroleum products in an effort to guarantee domestic supply. Under the new rules, oil companies must register for authorization from the Department of Fuels before exporting these and other products. A deficit of fuel at independent service stations and of fuel oil and diesel oil at power plants is the result of excessive exports of these products.
Panamanians approved in a referendum in October a project to expand the Panama Canal by building a new set of locks that will allow the waterway to handle bigger ships and heavier traffic demand. The project is estimated to cost $5.25 billion and will be paid by Panama Canal users through toll increases.
Created: November 6, 2006
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