Oil & Gas Sector Report: Latin America’s Energy Advantage Returns to the Global Spotlight

Economic Studies Department

_{Sergio Olarte | Gustavo Acero}

This analysis, prepared by our Economic Research Department, examines the outlook for the oil and gas sector in Latin America, its competitive advantages, and the challenges that will shape its development.

Key Takeaways of the Week

• The recent shock stemming from the conflict with Iran has created significant opportunities for fossil fuel producers, despite a decline in underlying demand for these energy sources.
• Latin America is entering a new phase of oil sector expansion, with production levels approaching those seen before the commodity crisis and an increasing share of global crude supply.
• The region’s main competitive advantage lies in the upstream segment, particularly in South America, where Brazil, Argentina, Colombia, and Ecuador maintain relatively favorable energy balances and significant room for production growth.
• Argentina is emerging as the region’s leading natural gas growth story, supported by the potential of its unconventional resources, new licensing rounds, and intense drilling activity in Vaca Muerta and other producing basins
• Brazil remains the primary engine of regional growth, driven by offshore and pre-salt development, regulatory liberalization, and greater foreign investment participation. These factors are expected to continue supporting reserve growth and production expansion over the next decade.
• Colombia faces a more challenging outlook, characterized by shrinking reserves, lower exploration activity, and a less supportive regulatory environment. However, offshore projects such as Sirius could become a turning point for the country’s natural gas sector.
• Ecuador’s growth prospects remain constrained by mature oil fields, limited reserve replacement, a long history of underinvestment, and persistent regulatory and social-environmental risks.
   

Read the full report here: Bladex LatAm Insight