Comparison of Conditions Affecting Exploration in South America: ABSTRACT

Abstract

South America is a land of contrasts. Within this variety of relief, climate, and cover are some countries blessed with oil resources and other countries denied this wealth. Exploration for oil and gas in three countries, namely, Brazil, Chile, and Uruguay is carried on by government oil monopolies and financed through State funds. In all other countries of South America exploration is either performed through the participation of private companies or through cooperation between State enterprise and private companies. Venezuela is the most important oil-producing country of South America. Its daily rate of almost 3 million barrels of oil constitutes more than 80 per cent of all South America's production. For several decades Venezuela served as a world model for a 50/50 sharing of profits between the government and private enterprise. Late in 1958 an increase in income-tax rates was instituted which resulted in a marked increase in the government's share of oil-company profits. One effect of this change, coupled with the government's announced policy of granting no more concessions, has been a reduction of exploration activities. In Argentina a program called the Battle for Petroleum was invoked in July, 1958, by President Frondizi whereby private companies were invited to bid for contracts to help the government oil agency, Yacimientos Petroliferas Fiscales, develop known fields and to assist in the exploration for the finding of new reserves. This program in less than 4 years has brought Argentina self-sufficiency in oil production, greatly reduced the import requirements, and saved valuable foreign exchange. The future of exploration in South America is intricately involved in the destiny of these peoples and could be affected seriously if communism or its Cuban variety, Castroism, should make inroads into their political and economic life. Our government, through the Alliance for Progress, a cooperative program, hopes to help the people of Latin America advance their economy and public welfare. Private enterprise also must challenge and defeat the charge of imperialism through accelerated public-relation programs and positive demonstrations of a working partnership or sociedad in the exploration for oil and gas. End_of_Article - Last_Page 269------------