In general, oil and gas producers in South America—apart from Argentina and Brazil and with the exception of Colombia and Guyana—have to face many difficulties in sustaining or increasing their hydrocarbon reserves and production. After several years of scarce exploration activities, Bolivia only this year approved several projects in non-traditional areas, while production in mega-gas fields is in decline.
On the other hand, in Colombia, the new government of President Gustavo Petro, which at the beginning of this year approved a fairly aggressive investment, prefers to import hydrocarbons from Venezuela again, instead of continuing to invest in new deposits, while guaranteeing the investments of his predecessor. Only Guyana, thanks to the investments of ExxonMobil, continues to accumulate new discoveries that will surely make this small country a major player in the coming years.
Bolivia. At the beginning of October, the Bolivian Senate unanimously approved five new exploration contracts for the exploitation of hydrocarbons in the regions of Santa Cruz, Chuquisaca and Tarija, which have great oil and gas potential. After approval of the law in the Legislative Assembly, and subsequent enactment by the government, the state-owned company, YPFB, signed contracts with Canacol Energy and Vintage Petroleum Boliviana, to carry out exploration and exploitation activities in the areas of Ovai, Florida Este (Santa Cruz), Carandaiti (Chuquisaca), Sayurenda and Yuarenda (Tarija).
One month after the announcement, YPFB confirmed that at the end of November, it will begin drilling the Mayaya Centro-X1 I.E. exploration well. The trajectory of the well will be vertical, and the main objectives are to study the stratigraphic column of the area of Lliquimuni at a depth of 5,500 m. However, to strengthen investments in exploration activities, YPFB’s president said in a statement during the Río Oíl Gas 2022 congress that Malaysian state oil company Petronas has shown a strong interest in the Bolivian exploration projects that will soon be announced.
Colombia. At the end of August, state oil company Ecopetrol confirmed the presence of gas through the new Gorgon-2 exploration well, located in ultra-deep waters of the southern Colombian Caribbean, about 70 km from the coast. Ecopetrol and Shell are partners in the southern Caribbean blocs, with a 50% stake, each. Ecopetrol announced that the Gorgon-2 exploration well has ascertained the presence of gas at a water depth of 2,400 m, and a total depth of about 4,000 m.
The well, therefore, confirms the extension of a gas field discovery made in 2017 with the Gorgon-1 well. The opening of this new frontier is in line with Ecopetrol's strategic plan to maximize the value of its portfolio of exploration projects, focusing on deep and ultra-deepwater assets, which will, therefore, increase the development prospects of a new frontier of exploration and production in the northern Colombian Caribbean in the coming months.
Ecuador. The current administration has focused all its efforts on rebuilding production, despite the fact that since Aug. 15, there have been six serious electrical incidents and a very strong national strike, when oil-equivalent production fell to 377,000 bpd. As a result, the Ministry of Energy and Mines in mid-October launched the XIII Oil Round, a tender that seeks to attract investment for the development of important exploration and development projects in six hydrocarbon blocks: Tamya, Saywa, Tetete Sur, Lumbaqui, VHR Este and VHR Oeste, located in the province of Sucumbíos. This process provides for the raising of $2.1 billion for the exploration and operation of these blocks. It is estimated that with the award of the six blocks, between 18,000 and 24,000 bopd can be obtained, with an API degree between 13º and 31º.
Guyana. In September, ExxonMobil’s offshore fields in Guyana—Liza Phases 1 and 2—produced 11.6 MMbbl of crude oil, with an average of around 366,310 bpd, while in August, the total production was 11.3 MMbbl, with an average of 365,000 bpd. While the U.S. oil company, Exxon, did not disclose the exact amount of oil derived from the new discovery, it did raise its fourth-quarter production forecast. According to the Rystad agency, some 11 Bbbl of recoverable oil discovered to date should make the country a global oil powerhouse in the coming years.
Despite these excellent results, the country has decided to bet on the future of the oil industry with the new auction, which will be open for five months and include 14 blocks, ranging from 1,000 to 3,000 km.2 Of those blocks, 11 will be in the shallow area, primarily from what is currently called the Orea area, and the Demerara Block is being divested by CGX Energy and Frontera Energy. The remaining three blocks will be in the deep C area, on the northeastern border with Suriname.
Trinidad & Tobago. Although the hydrocarbon industry is going through a difficult time, due to limited exploration activity and a slight reduction in oil production in mature fields, new short-term exploration emerged at the beginning of October with the Calypso project, in a block that extends over an area of 1,600 km2 at a depth of 2,200 m. The deepwater project will take approximately 70 days to complete, after which the ship's technical experts will analyze the collected data. On behalf of the government, Minister of Energy and Energy Industries Stuart Young highlighted the importance of the project for the country, as it is another fundamental step toward the development of deepwater resources.
Peru. According to statistics from state company Perupetro, hydrocarbon production grew 15.7% during the first half of this year, compared to the same period in 2021, with oil output increasing 14% and natural gas up 33%. However, according to an analysis by the Department of Economic Studies of Scotiabank, they project that oil production will have grown 8% during 2022. At the same time, they point out that long-term production expectations are uncertain, due to the drops that they have been registering in investment and exploration.
In fact, according to Perupetro data, from January to May 2022, investment in hydrocarbons amounted to $104 million, of which only 2% were allocated to exploration. Regarding current contracts, 25 of them are in operation, while six are still in the exploration phase, most of which are suspended, due to social conflicts. WO