South America is fast becoming the world's hottest oil patch

Hindustan Times

11-08-2025

It was a rare day of good news for Britain's beleaguered oil giant. On August 5th BP not only announced a quarterly profit of $2.4bn on its preferred measure, a third higher than analysts had expected. It also unveiled an enormous oil discovery, dubbed Bumerangue, some 400km off the coast of Rio de Janeiro. It is the company's largest find in 25 years.
BP is not the only driller betting big on South America, which last year produced around two-fifths as much crude oil as North America. It is the world's fastest-growing region for oil and gas, says Mark Oberstoetter of Wood Mackenzie, an energy consultancy. By 2030 production is forecast to increase by roughly a third, compared with around a quarter in the Middle East and a tenth in North America.
Three South American countries stand out. The first is Brazil. Rystad Energy, another consultancy, forecasts that crude production there will surge by 10% this year, to above 3.7m barrels per day (b/d). Analysts view the Bumerangue discovery as a positive sign for the country's oil prospects more generally. Equinor, Norway's national oil company, owns two sites nearby. The find should also boost interest in an auction for oil rights to be held in October. Oil giants including Chevron, Shell and TotalEnergies all have growing operations in the country. Petrobras, Brazil's state-owned oil giant, is also investing to expand exploration and production.
Guyana, with a population of less than 1m, has emerged as another hotspot in South America. Rystad expects oil production there to increase by 12% this year, to around 690,000 b/d, rising to some 1.2m b/d by 2030. Stabroek Block, a gargantuan oil field some 200km off the coast of Georgetown, Guyana's capital, was the cause of a recent spat between America's two largest oil companies. Chevron's acquisition of Hess, a smaller American rival with a stake in the project, was initially blocked by ExxonMobil, which also owns part of Stabroek Block. After lengthy wrangling, an arbitration court in Paris ruled last month that Chevron could proceed with its acquisition.
Then there is Argentina. Its oil sector, which had long been held back by overbearing governments, is now roaring to life under President Javier Milei. Fuelling the boom is Vaca Muerta ('dead cow' in Spanish), a shale region in the west of the country. Oil production there leapt by 26%, year on year, in the first quarter of 2025. Its prospects are helped by a big pipeline project, due to start in 2027, that will eventually transport some 700,000 b/d of oil to the Atlantic coast to be exported.
America's shale revolution, which took off in the early 2010s, turned it into the world's largest oil producer. But the country's shale fields are now ageing. The next chapter in the growth of the global oil industry may take place to its south.
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