La Economía Política del Petróleo

en Latinoamérica: ¿Una nueva apertura petrolera?

Precios y el mercado

Francisco Monaldi, Ph.D. Profesor-Investigador, Baker Institute, Rice University

Investigador Asociado, Belfer Center, Harvard Kennedy School Director Fundador Centro de Energia, IESA

ACP, Bogotá, Septiembre 2016

Oil Production: US + Canada vs. Latin America (thousand barrels/day)

Source: BP SRWE 2016

-7%

+70%

The Latin America Oil Industry during the Boom: another wasted opportunity

• In 2004 Latin America produced 11 mbd, in 2014, 10.3 mbd. A decline during the largest oil price boom in history?

• All other regions increased their production. The region lost more than 1% in the world’s oil production share to less than 12%, even though it has close to 20% of the proved oil reserves (the largest outside the Middle East).

• Divergent trajectories. In which countries production declined? In the net exporters, except Colombia:

– México (-1.1 mbd from peak), Venezuela (-800 from peak), and Argentina (-300). Ecuador stagnated.

• In which went up?

– Brazil (+800 tbd), Colombia (+450), and in Peru (+20).

• Why? Political economy of resource nationalism and NOCs.

The Big Three: Production (thousand barrels/day)

Source: BP SRWE 2016

• Declining investment, production and reserves

• Low oil prices • Need to attract

investment

Oil opening: • Attractive terms for

private investors • Privatization of NOC

New investment cycle • Discoveries? Yes • Increased production

and reserves? Yes

Expropriation and Nationalization

• Oil price rise • Regressive

taxes

Net exporter?

125/126

124/126

114/126

101/126

57/126

78/126

• In Argentina Kirchner approved a new more liberal law with attractive terms, signed deals with Chevron and others. Macri has shifted policy, but offers attractive framework for companies.

• Mexico’s opening is going more or less as expected, still the more attractive areas have not been auctioned. Pemex has to open up.

• Brazil has shown some signs that it would become more pragmatic again,

e.g. less domestic subsidies. The new government wants less Petrobras equity and possibly private operation, less local content requirements, etc.

• Venezuela is liberalizing the oil sector. Cutting windfall taxes and royalties, giving JV partners control over cash flow, a weaker exchange rate to invest, and a more pragmatic model. But above ground risks are still too large and PDVSA is “broke”.

• Colombia and Peru continue to try to attract more investment with a less abundant endowment.

The Gulf of Mexico on the Mexican side could experiment a great expansion in well drilling activity in the next decade.

What could happen in Mexico… MEXICO

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Petrobras y Ecopetrol

Precios son demasiado bajos para sostener inversión necesaria, por lo que tenderán subir.

En el mediano plazo, probable techo de precios por alta elasticidad de la oferta de shale en los Estados Unidos.

Si la demanda en Asia sigue creciendo, puede venir otro periodo de precios altos, una vez que el shale se desarrolle y todavía quede demanda por cubrir.

Sin embargo, nuestra capacidad de predecir precios es muy limitada.

En el largo plazo las probabilidades de obsolescencia del petróleo son significativas, por desarrollo tecnológico y políticas de cambio climático.

¿Una ultima ventana de oportunidad?

Source: EIA

Thanks for your attention

francisco.monaldi@rice.edu

Twitter: @fmonadi E&C Annual Forum

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