How South America is becoming the fastest growing oil region in the world

As estimated by the International Consultant Rystad, South America will go from producing about 7.4 million barrels per day of oil (heavy and light) to almost 9.6 million.

On the other side of the balance, Colombia, Ecuador and Venezuela appear with a perspective of productive decrease in fossil fuel.

Brazil, the largest oil engine in the region, beat a production record in June, when it extracted an average of almost five million barrels of natural oil and gas, according to the National Petroleum and Gas Agency in the country.

The magnet that attracts investments to that country is the area known as the presal, an underwater geological formation formed by thick layers of saline rock under which oil and gas deposits are found.

Guyana's crude is also extracted from deep water deposits located in the Stabroek block, a maritime area of ​​thousands of square kilometers where a consortium led by the Exxonmobil company in one of the most important oil and gas reserves in the world operates.

Since its discovery in 2015, Guyana, a country with just over 800,000 inhabitants, has lived an oil boom as never before in its history.

About half of the projected oil growth for all South America will have its origin in the maritime subsoil, says Flávio Menten, Rystad analyst, in dialogue with BBC Mundo.

“South America is the largest marine waters producing worldwide,” he explains.

Pietro Ferreira, senior analyst of the international consultant Wood Mackenzie, points out that the main oil and deep -water projects in the region combine “high productivity and low carbon intensity”, something that is attractive to large oil companies.

However, as Ferrerira tells BBC Mundo, the region faces a great challenge, which is to keep the impulse beyond 2030.

That is why the discovery and exploitation of new deposits is key to the industry.

Far from the underwater depths is cow in Argentina, a gigantic geological formation that houses oil and shale gas.

These unconventional hydrocarbons differ from the rest because they are trapped in rock formations and their extraction requires using the hydraulic fracture technique (fracking).

The heart of Vaca Muerta is located in the province of Neuquén, whose oil production in July reached the highest level of its history by marking an interannual growth of 28%.

Although the forecasts anticipate a gigantic oil growth in Vaca Muerta, the doubt is how fast it will be developed, says María Cristina Pacino, a professor and researcher at the National University of Rosario.

The growth rate “will depend on infrastructure investment,” says Pacino, a key factor to accelerate productive expansion.

It is expected that at the end of 2026, an oil pipeline of more than 400 kilometers that will carry the crude extracted from cow a death into a port terminal in the Atlantic.

Rafael Scott and Luciano Di Fiori, from McKinsey Energy Solutions, anticipate that South American oil production could even grow 35% towards the end of this decade, assuming a price level similar to the current one.

It is a great leap that would imply an average annual productive increase of between 4% and 5%, compared to 1% annual oil production.

Since almost all of South America is not subject to the production quotas of the Organization of Petroleum Exporting Countries (OPEC) and has the support of new discoveries, experts point out, it could be successful to describe it as the fastest growing oil and gas region in the world.

No doubt Middle East will continue to produce in 2030 many more barrels of oil per day (about 35 million) than South America (about 10 million), but what will make the difference is the percentage increase in production levels.

Some of the most important projects in the region:

As well as private, state companies are actively developing the industry.

For example, the Brazilian state -owned Petrobras is making important investments in additional production units in the Búzios site and the Argentine state YPF has been put as a strategic objective to raise production in Vaca Muerta as much as possible.

This oil boom in South America, has found harsh criticism by scientists and environmental organizations that claim more investments in clean energy to stop the advance of climate change.

While Brazil prepares for the most important climate conference in the world, COP30, in November, President Luiz Inacio Lula da Silva has said that oil revenues are necessary to finance green energies, something that their critics consider a contradiction.

“It is thanks to this wealth that we will have the money to build the energy transition we dream of,” the president recently said.

Despite the emission reduction goals that have raised many countries, the global economy, on the other hand, faces the risk of an oil scarcity after 2030.

Experts anticipate a decrease in oil production if new deposits do not enter into operation as the current reserves are exhausted.

Therefore, they say, if it is not explored or is not successful in doing so, the world would depend even more on Saudi Arabia and other OPEC countries to cover their energy needs.

Despite environmental pressures for the development of energies such as wind and solar, and green hydrogen, the oil industry continues to look at South America, where barrels are relatively cheaper to produce than in other parts of the world.

The United States, for example, with the maturation of many of the richest shale basins and the decrease in the quality of the remaining drilling areas, does not seem as attractive as the commercial opportunities that arise for private investors in the south of the continent.

It will not be easy for renewable energies to compete with the oil boom that is coming in the region, although in the long term, not everything is written in stone.

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