Wednesday, April 16, 2008
Repsol YPF Production Falls 20%
Repsol YPF, the largest hydrocarbon producer in Argentina, has announced that its proven reserves have fallen by 20.3% since December 2005. It also announced that its total 2007 hydrocarbon production(oil, gas and gas liquids) fell by 4.1% compared to 2006. This reduction in both production and proven reserves means that new discoveries, both in existing fields and new areas, have not been sufficient to replace the depletion of existing reserves.
Local energy experts attribute this situation directly to the government's energy policy or lack thereof. Because of a lack of clear and consistent long-term policies and laws, most companies invest in short-term measures to increase current production. They do not tend to invest in long-term high-risk ventures such as offshore exploration, because there is no way to know what the government's policies and actions may be five years from now.
Brasil, in contrast, with a middle of the road government and stable energy policies, is experiencing a boom offshore, with some of the largest discoveries in the last 30 years in South America.
Local energy experts attribute this situation directly to the government's energy policy or lack thereof. Because of a lack of clear and consistent long-term policies and laws, most companies invest in short-term measures to increase current production. They do not tend to invest in long-term high-risk ventures such as offshore exploration, because there is no way to know what the government's policies and actions may be five years from now.
Brasil, in contrast, with a middle of the road government and stable energy policies, is experiencing a boom offshore, with some of the largest discoveries in the last 30 years in South America.
