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By Rystad Energy – Mar 06, 2025, 3:00 PM CST
- Latin American NOCs play a vital role in their national economies, and oil and gas remain critical to their prosperity and energy security.
- While global oil demand remains robust, Latin American NOCs must increase efficiency and adopt cleaner production methods to stay competitive.
- A pragmatic approach to energy transition involves integrating renewable energy sources, like green hydrogen, while maintaining hydrocarbons as a central component of the energy mix.
Latin America has long been a dominant force in the global energy market, built on vast oil and gas reserves. While the world increasingly eyes renewable sources of energy for the future, hydrocarbons remain the bedrock of economic stability for the region. As energy demand evolves, national oil companies (NOCs) must not forsake oil, but rather ensure its competitiveness while prudently exploring emerging energy markets. The challenge is not whether hydrocarbons have a future, but how regional NOCs can harness their expertise to safeguard Latin America’s standing in the global energy landscape.
For Latin America’s NOCs, oil and gas are not merely commodities, but are lifelines of national prosperity. Brazil’s Petrobras, Mexico’s Pemex, and Colombia’s Ecopetrol have generated vital revenues over the years, providing energy security and sustaining domestic industry.
- Schreiner Parker, Managing Director for Latin America
For Latin America’s NOCs, oil and gas are not merely commodities, but are lifelines of national prosperity. Brazil’s Petrobras, Mexico’s Pemex, and Colombia’s Ecopetrol have generated vital revenues over the years, providing energy security and sustaining domestic industry. Despite all the buzz around renewables, global oil demand remains robust, particularly in transport, heavy industry, and petrochemicals, and will continue to grow into the next decade. To remain relevant, Latin American NOCs must double down on efficiency, embrace cutting-edge extraction techniques, and adopt cleaner production methods to ensure the hydrocarbons they produce retain their edge in an increasingly scrutinized market.
Natural gas, a pragmatic “bridge fuel”, offers another key opportunity. With plentiful reserves, Latin America is well-placed to expand liquefied natural gas (LNG) exports while keeping the lights on at home. Meanwhile, investment in refining and petrochemicals would allow the region to extract more value from its crude rather than merely shipping it off in barrels and hoping for the best.
Latin America has historically played a formidable role in shaping global energy markets. Venezuela and Mexico were among the original oil powerhouses, while Brazil’s deepwater discoveries and Argentina’s Vaca Muerta shale play have reaffirmed the region’s relevance. These resources remain invaluable, but history has shown that riding the booms and busts of commodity cycles is no way to build a resilient economy.