Taking into account that hydrocarbons will continue to be an important and strategic component in the energy matrix of the world, especially the countries in the region, the Regional Association of Oil, Gas and Biofuels Sector Companies in Latin America and the Caribbean (ARPEL), through its Exploration and Production Committee, has published the document “Considerations to promote investment in oil and gas exploration and production in Latin America and the Caribbean.”

This is the 2015 update of ARPEL catalog of general points about bidding rounds for oil and gas exploration to be considered by governments and other stakeholders. Through this work, the Association aims to contribute to the creation of business opportunities for the industry.

The considerations in this document represent the opinion of ARPEL member companies, state-owned and private companies, and include topics related to types of contracts, government-industry partnerships as well as institutional, social, environmental and economic issues that would allow the sustainable development of hydrocarbon resources in the region.

As stated in the work, Latin America and the Caribbean is a region with numerous opportunities: heavy oil belts in Venezuela and Mexico, the presalt basin in Brazil, the development of the upstream industry in Colombia and Peru, the opening of the hydrocarbon sector in Mexico, unconventional resources in Argentina, among other examples. However, it is also a region where high costs and risks are an important factor in the decision-making of investors.

Annual investments in exploration and production needed to develop hydrocarbon resources in Latin America and the Caribbean are currently estimated between 120,000 and 150,000 million U.S. dollars.

Partnership between governments and national oil companies working internationally and/or private multinational oil companies provides an alternative means of sharing risk and obtaining the necessary capital.

At present, there are many successful formulas used by different countries, which are nowadays producers and in many cases also hydrocarbon exporters.

Other key points of the document are the factors that have an influence on investment.

It also discusses a series of strategic considerations among which are: the government of a country taking into account its own relative position of “political and economic country risk” in addition to exploratory risks, making a preliminary analysis of those oil companies more suitable to invest, work and share the economic future of the country, and obtaining full political agreement on the terms of each bidding round.

The authors state, “it is vital to make the goals of the State compatible with those of the industry,” and “large participation of companies in bidding rounds can be achieved by guaranteeing legal certainty, predictability, transparency and stability.”

Unconventional resources is the subject of the last chapter of the document.

“Considerations to promote investment in oil and gas exploration and production in Latin America and the Caribbean" is available on ARPEL website and can be downloaded from the following link: https://arpel.org/library/publication/398/