The oil industries of Venezuela and Brazil are doing more for Latin American unity than Venezuela’s Bolivarian regional integration pipedream, in a nascent yet encouraging signal for the global energy security.
The state-controlled energy mammoths PDVSA of Venezuela and Petrobras of Brazil are investing heavily in the oil and gas industries in South American and the Caribbean, as well as signing deals to further deepen the trend in coming years.
PDVSA is helping Ecuador, Cuba, Argentina and Caribbean nations develop their hydrocarbon production and refining industries, while Petrobras is involved in just about every South American country across the entire value chain.
The two companies, which also work together in several joint ventures across the continent, are leading the drive, but they are not alone. YPF of Argentina is also planning to invest in Venezuela. Ecopetrol of Colombia is helping Venezuela and Peru, and the list goes on.
To be sure, Latin America appears to have finally found a strong shared interest to bond around, and it’s not ideology or politics. It’s the shared goal of developing the region’s rich oil and gas reserves, the second biggest in the world after the Middle East, most of which remain untapped.
The trend appears solid, although it’s gaining steam, and the outcome remains far from certain. Still, it’s an encouraging sign of Latin America’s evolution, one that could offer some welcome oxygen to a tight oil global supply in the midterm, and more importantly consolidate the region’s march toward political and macroeconomic stability.