Oil major BP Plc is closely following oil auctions in Brazil, Mexico and other potential offshore investment opportunities in Guyana, Colombia and Suriname in a bid to expand its presence in the region.
Rising crude prices and energy reforms in several Latin American nations have reinvigorated the oil majors’ appetite for a region that once imposed nationalizations, forced contract changes and strict rules for foreign investors.
More companies are becoming interested in offshore prospects from Brazil to Guyana, which present potential new reserves and could diversify investment portfolios.
“Our emphasis in the region right now – in terms of bidding rounds – is in Brazil and Mexico. We are also looking at Argentina, though it is still early,” Felipe Arbelaez, BP’s Latin America Chief said, according to an April 30 Reuters report.
Brazil will receive bids for blocks in its coveted presalt region in June, after awarding majors including Exxon Mobil Corp, BP and Royal Dutch Shell Plc offshore blocks in previous rounds in 2017 and 2018.
Brazil’s government is also in negotiations with Petrobras to accept foreign investment in the remaining areas of fields assigned to the state-run oil company. The resulting blocks would be auctioned this year, along with hundreds of areas that were not awarded in previous rounds.
For its part, Mexico plans to announce results in September from two onshore rounds, including its first offer of unconventional areas for foreign investment.
In Colombia and Uruguay, the investors’ interest has not been as high. The Andean nation has postponed several times the offer for its Sinu-San Jacinto onshore round, while Uruguay received no bids at its third offshore auction in April.
The auctions in many Latin American countries come as presidential elections this year increase the political risk because some candidates have promised to slam the brakes on reforms, revise the signed contracts or change fiscal terms.
Guyana’s decision to retain a system of direct negotiations with companies or move towards a bidding system for the issuance of Exploration and Production (E&P) licenses will be determined by national interest, its Minister of Natural Resources, Raphael Trotman, has told OilNOW.
“Every country is different… (The elections) don’t change our perspective in the medium or long terms,” Arbelaez said.
In countries including Guyana, Colombia and Suriname, the firm is seeking opportunities to participate in offshore areas.
“These countries are reopening for foreign investment. We think that will benefit the countries because they will have a wider number of experienced operators and because they will be capable of better developing and marketing their resources,” he said.
