Oil supply in Central and South America

This paper estimates a cumulative supply curve for conventional oil in the Central and South American (CSA) region. The curve includes volumes from provinces not previously assessed by other organizations, as well as reserve growth. Volumes for the previously unassessed provinces are estimated using a variable shape distribution (VSD) model. Then the volumes are allocated to CSA countries based on each country's share of proved reserves. Figures provided by the cumulative supply curve are stock variables for all time, unlike the traditional supply curve where they are flow variables that can continue from one period to the next. In this study, the fixed stock approach is used since it provides practical information with respect to the concerns that some have expressed about oil scarcity in the near future. Results indicate that Central and South American oil is more abundant than often assumed, and can be produced at costs below current market oil prices, and substantially below mid-2008 prices.