Argentinean oil companies are seeking to adjust to the changing market

Oct 11, 1999 02:00 AM

Argentinean oil companies are seeking to adjust to the Mercosur business environment, where the main targets are Brazil and Bolivia. Over the long term Brazil could play a decisive role in the regional oil market, competing with Argentina, while Bolivia has emerged as a major supplier of natural gas to Brazilian cities, and may become an exporter to neighbouring countries.
The recently finding of a huge oil reserve (700 mm barrels of light crude) by Petrobras in the Santos basin, Sao Paulo state, may change dramatically the position of Brazil as a major importer of crude within the next 3 years. To the disadvantage of Brazil its current production in Campos basin, Rio de Janeiro state, is of heavy crude, what obliges the import of light crude for mixing in the refining process.
Petrobras currently produces 1.1 mm bpd and imports 600,000 bpd, while it has 8,800 mm barrels of reserves, added by 8 % with the new findings.
In Argentina, Perez Companc oil company believes that Brazil will not only reach self sufficiency in oil production, but may compete with Argentina over the long term.
Thus the strategy would be to seek opportunities in Brazil, and establish there a stable position.
This was the strategy choose by YPF, that in addition to export crude & derivatives to Brazil, has won stakes in off shore areas tendered by the Brazilian oil agency ANP. In addition, the company has a partnership in the Manguinhos oil refinery in Rio de Janeiro to complement its fuel distribution activities.
Perez has onshore activities in Bahia state, and is to bid for new oil areas to be tendered by ANP from April onwards.

In the natural gas sector business are flourishing, as recently the consortium Andina - Petrobras announced the finding of 240,000 mm cm reserves in Bolivia, and continue drilling. YPF, Pluspetrol, and Perez Companc has a 50 % share in Andina and will grasp the opportunity. The new findings will change the position of Bolivia that may export gas to Argentina.

Source: Sabi via Newspage
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