For decades, Latin American oil drilling operations lagged behind other regions. In 2016, all that has changed.
Brazil, Argentina, Colombia and Mexico are experiencing a drilling boom because of their rich oil and gas resources. In today’s marketplace, there are many reasons these countries are attractive to drilling operations. Here are just a few.
Well-drilling in Honduras.
Brazil’s Offshore Pre-Salt fields
Brazil has become a major player due to its abundant pre-salt reserves. Pre-salt is a geological formation on continental shelves that is often filled with petroleum that hasn’t leaked upward into the post-salt layers. These pre-salt layers are thought to represent a significant portion of the world’s oil reserve.
Brazil’s offshore pre-salt fields are believed to contain 65 billion barrels of recoverable resources. While there are already drilling activities taking place in these pre-salt fields, more innovation is needed to explore all of the layers and tap the potential of these oil-rich areas.
Shale Exploration in Argentina
Shale exploration efforts are constantly expanding in Argentina. In 2014, the Argentine government changed its energy policy to encourage foreign ventures into the country’s oil market.
The U.S. Energy Information Administration (EIA) says that Argentina has the second-largest recoverable shale gas reserves and shale gas and fourth-largest shale oil reserves in the world. Many companies have already moved into the country to develop these shale resources. However, the demand for advance-technology rigs is expected to pick up as drilling contractors switch to new technologies to make the most of the country’s resources.
Mexico’s Open Market
Recently, Mexico opened its doors to foreign oil companies for the first time in 75 years. Since the country’s oil production had been falling, leaders opened the country up to foreign bidding. While companies have already received blocks, there are still opportunities for shallow-water and deep-water blocks, as well as unconventionals such as shales and tight oil reservoirs.
American companies are particularly well-suited to drilling in Mexico because they can drill formations similar to ones they’re already drilling, and because of Mexico’s proximity to American oil and gas infrastructure.
Future of Latin American Drilling
Mounting debt has become an issue with Latin America’s state-run oil companies. The success they’ve seen over the last decade or so is tempered by the large amounts of debt the companies have incurred. This, along with local currencies’ devaluation against the dollar, is clouding the outlook for oil projects in places like Brazil and Mexico.
However, companies are mounting explorations in offshore Peru at deeper depths than ever before. Guyana has also seen more drilling recently than it has in years past. For example, oil-bearing sandstone reservoirs and natural gas have been found throughout the country.
Overall, many analysts think there will be much room for expansion in Latin America, especially when prices climb higher internationally. As oil prices inevitable begin to creep up in 2017, Latin America may be poised to become a hotbed of drilling activity.
Premiere, Inc. Can Help
Latin America has a thriving onshore and offshore oil and gas market. Premiere has experience working with customers throughout the region, a strong client base for our patented Premiere casing, tubing and cementing tools, including: Premiere Running Tool (PRT), Premiere Stabberless Elevator (PSE), Premiere Torque Rings (PTR), Rotating Cement Head (RCH) and Premiere Magnum Power Tongs.
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