The True Foundation of Energy Security: Why Latin America Cannot Abandon Exploration
In the ongoing debate surrounding Latin America's energy future, public discussion overwhelmingly focuses on daily production volumes and headline reserve figures. However, the fundamental physics of our industry dictates an inescapable reality: all oil and gas fields decline. As hydrocarbons are extracted, natural reservoir pressure progressively drops. This decline is not an operational failure; it is simply the nature of the subsurface.
For this reason, energy-successful nations recognize that production alone is insufficient; continuous exploration is essential. Exploration is the sole mechanism capable of replacing reserves consumed each year, ensuring energy, jobs, and economic growth for future generations. Regrettably, over recent decades, several Latin American nations have curtailed their exploration efforts due to political, regulatory, economic, or environmental factors, and the repercussions are now surfacing.
Warning Signs Across the Region The evidence across South America provides clear lessons:
● Peru: Gradually reduced exploration while increasing its reliance on imported hydrocarbons, now facing energy security challenges as new reserves lag behind demand growth.
● Bolivia: Shifted from a regional natural gas powerhouse to experiencing a sustained drop in reserves and export capacity due to a lack of major discoveries.
● Colombia: Despite maintaining a highly professional technical sector, debates over exploration generate concern regarding its ability to replace consumed reserves over the coming years.
The critical issue is that exploration operates on extended timeframes. A period of ten years or more can elapse between an initial discovery and commercial production. Consequently, when a country stops exploring, the damage is not immediately felt, but manifests years later when rapid correction becomes difficult.
The Venezuelan Perspective: Diversification and Recovery Factors Energy planning demands a long-term strategic vision. In Venezuela, while the Orinoco Oil Belt is an extraordinary asset, national energy leadership should never rely on a single producing province. The country holds substantial exploratory and development upside in North Monagas, western basins, the Llanos, and offshore areas.
Furthermore, exploration is not only about finding new fields; it also involves leveraging technology to improve recovery factors in existing reservoirs. Since global recovery factors often range between only 10% and 30% of original oil in place, each additional percentage point recovered yields millions of barrels.
True energy security is not built on current production; it is built on the capacity to continuously replace what we consume. The worst scenario for an oil-producing nation is not producing at scale, but ceasing to find new reserves.
About the author:
Jorge Miroslav Jara Salas is a global energy expert with over 30 years of experience leading complex operations in the petroleum industry. He is currently Chairman and CEO of Magnaccord Group SL, a company specialized in strategic investments in Latin America's energy sector. www.magnaccord.com www.jorgemiroslavjarasalas.com
Comments