What’s going on in Argentina, Brazil, Venezuela, and Colombia?
Leer en Español: Mercado de petróleo en América Latina
Since the second half of the 19th-century, crude took over as the most important asset in the world, a title recently lost to data on a global scale. Nevertheless, South America still depends largely upon its price to finance the welfare of millions. The Latin American Post prepared a brief of the most important news in the oil market.
British Echo Energy plc. announced an agreement with Argentinian Compañía General de Combustibles S.A in which Echo will gather 50% of Fracción C, Fracción D, Tapi Aike, and Laguna de Los Capones in onshore Argentina. The area of 11,153 square kilometers now makes 2.03 million barrels a day extraction. It could be increased to 14.25 if Fracción C, D. Tapi Aike, and Laguna undergo exploration.
Bottom line: Argentinian oil production is on the rise.
Brazilian Petrobras is expected to negotiate with British Petroleum as a letter of intent for said union was delivered on the first days of November 2017. Both companies worked alongside for the acquisition of the Alto do Cabo Frio in which both Petrobras and BP bought 40% while the remaining quota was assumed by CNODC. The deal could mean an important advance for BP’s market valuation, analysts conclude.
Bottom line: Petrobras has a solid operation, which has been shadowed by Brazilian corruption. A change in hands for Petrobras won’t disturb operations but increase the market’s confidence.
Russia remains Nicolás Maduro’s dutiful ally after former colleagues China and India vowed to stop lending money to the Venezuelan regime. International market spectators claim Russian Rosneft’s $6 billion loan to the Socialist mandate in exchange of oil futures –a fixed quantity of oil in a given time- was risky due to the recent default bells ringed by the South American government. Putin’s tenure stays strong.
Bottom line: Russia is gaining political power through economic means. Venezuela is well-known for finding ways to pay off its debts, as it occurred when PDVSA offered Rosneft’s 50% of its refineries in the U.S. under Citgo.
Canadian SNC-Lavalin announced a contract with Colombia’s Ecopetrol in order to structure the theoretical engineering framework for medium and high complexity projects during the 2018-2020 period. SNC-Lavalin has showed steady results in Latin America’s oil and gas industry while Ecopetrol’s revenues have not improved after the 2015 oil shock.
Bottom line: Colombia owns vast resources but lacks the technical capacity to exploit them. In the aftermath of the crisis, the Latin American country seeks foreign assistance in order to advance its productive efforts.
David Eduardo Rodríguez Acevedo | Latin American Post
Copy edited by Susana Cicchetto