Oil and gas supply : hurdles and opportunities

The socioeconomic development in Latin America was discussed with reference to its abundant and diverse resources. Despite its large population, Latin America represents only 6 per cent of the world gross domestic product (GDP) and a less than 6 per cent of the total world trading. This presentation described the problems of large deficits, poor economic policies, large debt and corruption that provoked inflation, economic slowdown, and foreign debt in Latin America. Policy makers agreed that reforms were needed if Latin American economies were to grow more than 6 per cent a year, and to lower the number of people living in poverty in the region. The second-generation reform for Latin America was meant to promote economic development without inflation. It is based on quality public sector governance; fiscal strengthening; an enhanced legal and regulatory framework; efficient financial markets; and, labour and market reform. This presentation also discussed the oil and gas industry's contention with the perceptions that the economic crisis in Latin America was caused by globalization, international trade and acquisitive industrialized countries. An initiative was launched in 1994 to build an integrated energy data bank, evaluate existing interconnections among Latin American countries, and identify barriers for a larger integration to facilitate and improve commercial activities. It was emphasized that while the United States has a large deficit of oil, Canada and Latin America have large surpluses of energy resources, which if developed efficiently and effectively, can be a leading engine of regional development and an important contributor to global competitiveness. Canada is the largest supplier of energy, including oil, natural gas and electricity to the United States, the world's largest energy consumer and largest oil and gas market. Mexico and Brazil were identified as the other 2 large economies in the region's energy chain, but Mexico is self sufficient and Brazil has a modest dependency. The important players on the supply side include Mexico, Brazil, Venezuela and Trinidad/Tobago. Also, Colombia is a player with its excellent exploration and production model, its stability and institutional strength. It was suggested that Bolivia could become an important player if changes take place to promote the development of its huge natural gas resources