Guatemala Oil is No Longer Competitive

The decline in global prices is the main reason behind the abandonment of several areas on the part of concessionaires, added to which is confusion around the mining moratorium.

Monday, March 14, 2016

Guatemala went from extracting 9 million barrels of oil in 2003 (a daily average of 24 thousand barrels) to just 3 million in 2015 (10 thousand barrels per day), recording a drop in production of 59.4% in twelve years. Factors such as the rapid decline in oil prices, lack of implementation of contracts and lack of transparency continue to affect the competitiveness of companies interested in investing in exploration and exploitation.

See also: "Uncertainty in Guatemala Over Oil"

According to Prensalibre.com, "... four years after launching a tender to explore and develop seven oil areas in the country to extract 51 thousand barrels per day, there have been no results, and two companies have stopped using their concession. Of the seven areas tendered in 2012, six were awarded but only two contracts have been signed and now the companies that won the award for the areas of Xalbal 7-2012 and Cancuén 5-2012 have withdrawn from the process and passed into areas in the national reserve. "

See also: "Bad Climate for Oil Business in Guatemala"

The information was confirmed to Prensalibre.com by Luis Ayala, director of Hydrocarbons at the Ministry of Energy and Mines (MEM). "... When the tender was launched for the four areas located north of Peten, where it was expected that they could obtain heavy oil with high sulfur which traded at $90 a barrel, while in the southern areas of the department that also covers Alta Verapaz, Quiche and Huehuetenango, they expected to extract deposits with lighter fuel which was trading at $100 a barrel. However, two years ago the price began to fall. "



More on this topic

Uncertainty in Guatemala Over Oil

January 2016

The decline in international oil prices is already affecting companies that exploit the resource in the country, meanwhile, contracts awarded in 2014 have not yet been signed.

Authorities at the Ministry of Energy and Mines (MEM) and the companies that received concessions to explore and exploit oil in the country predict a significant decline in investment in the sector this year, due to the downward trend in oil prices in the international market. This year it is expected that three contracts that were awarded in 2014 will be signed, and also "... the possibility of an oil tender has arisen, for which several blocks in Alta Verapaz and Peten have been earmarked."

Oil Contract Approved in Guatemala

August 2013

The government has awarded the company City Petén a contract for exploration and exploitation of oil in the Yalcanix area in the department of Petén.

Jose Paez, legal representative of City Peten, said they plan to start environmental impact studies and in the next three years will be investing $30 million during the exploration stage.

Extension of Future Oilfield in Nicaragua

November 2012

A recent ruling by the Court of the Hague, increasing the country’s maritime territory by 90 thousand square kilometers, puts Nicaragua in the sights of the oil companies.

According to experts the area where Nicaragua now has exclusive economic rights, is very rich in mineral resources and fisheries.

New Drive on Oil Exploitation in Guatemala

February 2012

The new Minister of Energy and Mines intends to encourage the development of the mining sector in order to reach 50 thousand barrels per day.

Oil production in Guatemala has declined from 25,000 barrels to 10,000 barrels per day, admitted Minister of Energy and Mines, Erick Archer, who aims to promote an ambitious plan to boost oil output and reach 50 thousand barrels per day within 4 to 5 years.

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