EXECUTIVE SUMMARY
May 2010
this month ’ s series :
Argentina: Oil Plus, Gas Plus?
Or Minus?
The long tradition of Argentine oil and gas
production is in jeopardy. A short sighted
government is limiting the industry with
low price ceilings and high export taxes,
essentially closing the domestic market off
from competition and market forces.
Colombia
The new reality of Colombia has allowed
for the success of companies like Pacific
Rubiales, which is on its way to becoming
a super independent, with production plans
of 30,000 bpd by the end of 2010 and
60,000 bpd by the end of 2011.
Peru
Peru can be seen as the younger brother of
Colombia in many ways, the two share the
same basins and each are striking a great
balance of attractive geology with solid
fiscal regimes and regulatory environments.
Brazil - potential bastion for oil
juniors
While Brazil is in no way facing short or
medium term production declines, juniors
could add momentum for future production
and reverse the decline it does have in its
mature fields.
Financing
The global recession hit juniors hard. It
took away global financial liquidity that
they need to fund operations and it pushed
down oil demand and prices making
some projects unfeasible. The financing
landscape has improved to some extent,
but equity markets continue to discriminate
between different types of players.
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Latin American Juniors
Peak oil will “peak” longer with junior and
independent oil and gas companies. While
the majors are worried about deep water,
ultra heavy crude, expensive refineries, or
fuel trading, juniors are busy exclusively
with finding and extracting oil and gas
in isolated places or in marginal/mature
fields. And their presence can be really
significant. For example, in the United
States they are thought to produce 68% of
oil and 85% of gas in the country, drilling
nearly 90% of total wells. Figures for the
region are not known, but juniors are the
primary force behind Colombia and Peru’s
recent success, they are propping up falling
Argentine production, and have a growing
potential in Brazil.
Brazil’s offshore discoveries (2000 –2010)
1 2008
0.75
Percentile
0.5 >50% of discoveries highly
material to Gran Tierra
0.25
0 100 200 300 400 500
Field Size (million barrels)
or +56-2 941 0404.
Although the region itself did not feel the full
brunt of the financial crisis, oil juniors were still
affected due to the fact that they finance their
operations in Toronto, Sydney, London, etc. In
addition to financing problems, the fall in the
oil price lit the candle at both ends, and many
oil juniors were forced to sit on their acreage
and/or cash and wait out the global recession.
In a backdrop of a recovery in liquidity and
growth, what is the operating landscape for oil
and gas juniors and independents in the region?
In this edition of the Energy Intelligence Series,
regional oil juniors will be analyzed in Argentina,
Colombia, Peru, and in Brazil to see if these
wily companies have been able to reposition
themselves in the region after the crisis.
2009
2007
2006
2005
2004
2003
2002
2001
2000
600 700 800 900 1000
Source: Gran Tierra, Wood Mackenzie
 Energy Daily Written and researched by
Michael LaGiglia

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