South America’s Offshore Oil Buries Net Zero Emissions Target – Did Watts Have Something to Do With It?

By Vijay Jayaraj

South American countries are increasingly recalibrating their energy strategies to take advantage of offshore oil and gas reserves, signaling a sharp shift from previously stated goals of reducing reliance on fossil fuels to meet the net-zero emissions agenda of those obsessed with a false climate emergency.

This difference reflects the region’s urgent need to address economic challenges, including poverty, unemployment and the need for sustainable revenue sources to finance social programs and infrastructure development.

Countries such as Brazil, Guyana and Argentina are spearheading new agreements and projects to increase exploration activities within their maritime boundaries. These efforts are not merely speculative; they represent concrete steps backed by significant investments from international energy giants seeking to capitalize on the region’s vast offshore potential. The economic imperative driving this resurgence cannot be overstated.

Brazil’s state-controlled company, Petrobras, is investment preparation $6 billion over the next five years to discover new fields with an estimated 10 billion barrels that could nearly double current reserves. The company’s focus on pre-salt basins has led to major discoveries, including the Buzios field, considered one of the most productive offshore oil fields in the world.

Guyana’s transformation into an oil power has been nothing remarkable since ExxonMobil discovered significant oil reserves in the Stabroek Block, estimated to contain more than 11 billion barrels of recoverable oil.

Production from the Stabroek Block began in 2019, and a consortium led by Exxon Mobil is now producing around 650,000 barrels of oil per day (bpd) from three platforms. Production has been steadily increasing and is expected to reach 1.4 million barrels/day soon have new discoveries.

Fueled largely by oil revenues, Guyana’s gross domestic product has skyrocketed, with a projected growth rate of 34% by 2024. This unprecedented growth provides Guyana with the opportunity to invest in infrastructure and poverty alleviation programs that would not be possible without black gold.

The Argentine government is looking to exploit its huge oil reserves, especially in Vaca Muerta FieldThe country is keen to diversify its energy portfolio and reduce its dependence on imported energy, especially amid ongoing economic challenges including high inflation, debt and a struggling currency.

With the world’s second-largest shale gas field and the fourth-largest shale oil reserves, Argentina’s potential is enormous. Argentina’s state-owned energy company, YPF, has announced partnerships with international giants such as Equinor and Shell to exploit untapped reserves in the Argentine Offshore.

The Fénix project in Tierra del Fuego — with peak production of around 10 million cubic meters of gas per day — is particularly notable; it promises to turn Argentina into a net exporter of natural gas. A new oil and gas law is currently under discussion aimed at attracting foreign investment in the sector, signaling a shift toward fossil fuels in the face of economic uncertainty.

Another struggling economy, Venezuela, has agreed to a 20-year natural gas exploration and production deal with British-Trinidadian multinational BP. With an estimated production of 400 million cubic feet per day, Cocuina gas field off the coast of Venezuela would bring in significant revenue.

As Latin America taps into its fossil fuel reserves, it has the potential to play a pivotal role in the global energy landscape. Rising output could reshape international dynamics as new sources counterbalance declining output from traditional producers.

South America has long struggled with socio-economic challenges, including high poverty rates and unstable economic growth. Offshore oil and gas reserves are an invaluable resource that could lift millions out of poverty, and developing them is an essential strategy.

Compared to the bleak path of net-zero emissions leading to social disaster for the sake of virtue signaling, soaring oil and gas revenues are far more appealing. They offer the tempting prospect of cash to shore up national budgets, create jobs and stimulate broader economic growth.

This commentary was first published at BizPac Review on August 27, 2024.

Vijay Jayaraj is a scientific and research collaborator at Plain₂ LeagueArlington, Virginia. He holds a Master’s degree in environmental science from the University of East Anglia and a postgraduate degree in energy management from Robert Gordon University, both in the UK, and a Bachelor of Engineering from Anna University, India.