WorldOil

South American oil economies cope with international slump

The oil and gas sectors of Brazil, Colombia, Argentina and Venezuela were caught at very different stages of evolution when the present international slump hit the industry at dizzying speed and put a crimp on projects. Authorities in Brazil, which occupies roughly half of South America, refuse to acknowledge that low oil prices might jeopardize ultra-deepwater pre-salt E&P projects that could vault the country into being one of the top 10 oil exporters and change the region’s geopolitical balance. Colombia, a country friendly to foreign investors, was starting to experience growth in its oil and gas industry. The government’s recent success against left-wing guerillas in a four-decade-old civil conflict promised long-awaited economic stability. Argentina was following a semi-nationalistic path with price controls on oil and gas, but high inflation and the need to increase production forced the government into a quick turn-around, and it offered incentives such as tax rebates, which were readily accepted by the oil industry.