Oil and gas activity in Latin America is booming as 2011 gets into its stride according to a new analysis of rig count data by Evaluate Energy. Of the top 10 countries with the largest year-on-year increases in rig activity from April 2010-2011, Latin America boasts 5 of them: Argentina, Brazil, Colombia, Ecuador and Venezuela (Min. 20 active rigs in April 2011.). Evaluate Energy now provides a monthly average active rig count for every country worldwide. The source of the data is MI-Swaco, a Schlumberger company.
Each of the countries mentioned above has at least a 15% increase in active rigs on last April’s count. Brazil and Venezuela have maintained their historical status as being amongst the region’s leaders, but Colombia has leapfrogged the pair within 2 years to become the second most active country on the continent, behind Mexico. All four are now in the top 10 most active countries worldwide. Ecuador has seen a high percentage increase on last year but rig activity remains relatively low, and while Argentina’s growth was significant, it was far less dramatic than the previous year.
This increase in rig activity may only be the beginning of a new era for the continent, if more recent developments are anything to go by. In Argentina, YPF SA has discovered a reported 150mmbbl shale oil deposit in the Neuquén province, a discovery equivalent to 35% of the company’s existing reserves. French major Total has recently joined YPF in the province, and Apache Corp has also released news of its own significant Neuquén well testing results.
In Brazil, both Petrobras (Campos and Espirito Santo Basins) and OGX (Campos and Santos Basins) have announced new discoveries since April 2011, and it was also announced that no fewer than 174 new licenses would be auctioned by Brazil in September. Brazil’s huge and highly productive pre-salt reserves will no doubt be a focus of many new rigs in the coming years.
In Colombia, another license round was completed in late 2010 and these contracts are only just being finalised. So, in the country where the biggest increase in the region can be identified, active rig numbers look set to soar even higher still.
Mexico, in contrast, is the only Latin American country to have seen a decrease in activity since April last year. It remains the country in the region with the highest number of active rigs, but the level has fallen significantly since its own boom in mid-2009.
This decline in rig activity is also mirrored by a fall in production levels. To address this, government policy has been changed, and state oil company Pemex has recently announced it is looking to increase foreign investment in the country’s oil industry. There will also be an increased focus on exploration of new areas such as the Mexican portion of the Gulf of Mexico. For further analysis on Mexico’s recent oil & gas climate, please refer to another of our blog posts, written by Allison Mansell.
Overall, the present and future of Latin America both look promising. If the new discoveries in Argentina, Brazil and Colombia eventually bear fruit, and Mexico’s policy changes have the desired affect, the global oil and gas industry could look extremely different in the near future.
Countries with the largest year on year increase in active rigs (min. 20 rigs in Apr 2011):
|Country||Apr 2010 vs. Apr 2011 %increase|
Iraq has been excluded from this table because the country did not have any active rigs in 2010, so a year-on-year analysis was not possible. Iraq had an average of 99 active rigs in April 2011, making it the world’s 11th most active country.