Latin American region is becoming a major investment place for oil and gas companies thanks to a favorable neoliberal environment.
Oil companies see Latin America as a major investment destination. The British Petroleum Company (BP) and the Norwegian multinational energy company, Equinor, announced this week that Latin America was going to be a significant source of the new hydrocarbon production over the coming decade.
Equinor expects that 30 percent of its oil output will come from the region by 2030. The two companies are seeking to develop their position in diverse areas such as mining, oil and gas exploitation, and renewable energy.
“If you have strategic clarity, you have to hibernate sometimes in these (Latin American) countries to wait for the right time to grow,” said Luis Gustavo Baquero, Equinor’s technology vice president. “We can’t put in the same bag all Latin American countries regarding institutionally,” he added.
Recently, in Colombia, the energy and petrochemical company Shell signed two exploration and production contracts with President Ivan Duque’s right-wing government. Contracts are aimed at enabling the group to explore offshore areas of the Caribbean Sea and will require the company to make initial investments of US$100 million.
BP’s Latin America regional president, Felipe Arbelaez, said that Argentina had a great potential to become an oil exporter as a result of the giant Vaca Muerta formation, one of the largest non-conventional oil and gas formations in the world found of the last several years.
“I sense that companies are redirecting more money into liquids from gas with promising results,” Arbelaez said. “The greater challenges for Argentina are macroeconomic stability.”
Within five years, Argentina is planning to double production, courting private investment as it aims to pump 260 million cubic metres of gas daily, Reuters press agency reported.
In order to facilitate the exploitation of giant Vaca Muerta formation, the President of the Argentine's neliberal government, Mauricio Macri, reviewed in 2017 the Collective Labor Agreement about unconventional gas extraction in order to boost the "efficiency and productivity", he said.
Oil companies are often accused of violating international human rights law and the human rights of their workers. In February 2019, Shell's systematic practice of violating human rights was denounced in a written statement from the United Nations Human Rights Council.