New discoveries in South America are changing the oil and gas market worldwide
The RM5 is designed to precisely calculate natural gas volumes and automate process control using only one simple piece of equipment.
Massive reserves in the Neuquen Province show promise for Argentinian economy.
Source: Advanced Resources International
There’s change in the air for the oil and gas industry.
For over half a century the Organization of the Petroleum Exporting Countries (OPEC) has held the world’s oil market in a clenched fist, but as exploration booms in the West, power appears? to be shifting. OPEC ventured to bury American shale production by dropping prices to the point that American companies could not compete. That strategy seems to be backfiring as American industries turn to creative solutions.
Exxon oil discovery in offshore Guyana.
With all the advanced technology originally slotted for shale production, investors turned to re-opening dormant wells whose depths were previously unreachable. Companies such as ExxonMobil have also turned to exploration, especially in South America where issues with funds and infrastructure keep local producers from reaping the benefits. In 2015 ExxonMobil discovered massive reserves off the shore of Guyana with an estimated 1 billion BOE. Though the subsidiary Esso Exploration, Exxon holds a controlling interest in the area where the discovery was made and, pending a final investment decision, could begin production by 2020.
Guyana is not the only country in the oil spotlight.
Along the western border of Argentina lies the Neuquén Province, home to even greater reserves. As of 2012, Repsol YPF S.A. estimated at least 22.5 billion barrels in oil reserves sits in the Vaca Muerta region of the Neuquén Province. More recently however, the U.S. estimated the reserves to hold just over 16 billion barrels of oil and 53 billion BOE of natural gas. Of course, these reserves are mostly in shale, which is more difficult to remove than regular gas pockets. To counter excess expenditures in drilling, the Argentinian government has decided to keep artificially high gas prices to entice U.S. and other major companies to enter the market, drill, and sell for guaranteed profit. Although higher prices may not seem optimal for locals at the moment, the projected influx of companies and revenue will build toward creating long-term opportunities for the nation’s industry and economy.
While the Americas push boundaries in exploration, other countries are falling behind the curve. OPEC remains happy to source and sell from its current supplies, while China and Europe are neither in production nor exploration phases. Once production begins in South America, U.S. exports can focus on stagnant countries. With so many factors favoring the U.S. oil and gas industry, will the U.S. be able to take over the market and abandon unfavorable foreign relationships?