Abstract: U.S. Views on Business Openings in South America

Pickard, Ann D. - Mobil Corporation

The investment climate in South America has benefited from stabilizing democracies and growing economies. This has opened promising opportunities for Mobil, as well as other companies, and Mobil sees South America as a key growth and investment area.

Despite the Southeast Asian financial problems, we see South America continuing to have favorable growth rates. For example, we believe natural gas demand should grow as fast as, or faster than, economic growth, resulting in a tripling of consumption in twenty years. With time, the distribution of energy consumption will change. Argentina currently consumes about eighty percent of the region?s gas demand. In the future, Brazil will increasingly capture gas demand. Chile and Peru also will increase demand as these countries switch to cleaner energy sources.

In addition to a growing economy, the region has abundant energy reserves. Some of this potential is in the known trends where hydrocarbons have already been discovered. We also recognize additional potential in new, exciting trends in unexplored areas.

The governments of the region have taken courageous steps to attract foreign capital. Countries such as Bolivia, Peru, Venezuela, and Argentina have attracted energy companies who are making significant investments in their economies. Others, such as Brazil, have begun the process.

We continue to be encouraged by this process but not all countries have been equally progressive in attracting investment. The following Issues are critical to attract oil and gas investments: clear and consistent regulatory framework, fair government take, open and competitive Energy Market, and willingness to allow investment.

It is our hope that by sharing this information and addressing these issues, Mobil and other companies can contribute to South America?s economic growth.

AAPG Search and Discovery Article #90933©1998 ABGP/AAPG International Conference and Exhibition, Rio de Janeiro, Brazil