Chevron’s head of resource exploration in Latin American and Africa discussed the recent history of hydrocarbon investment, explaining that since 2002 spending by oil and gas companies has quadrupled to $400 billion. Furthermore, by 2020 global hydrocarbon capacity will increase 20 percent. However, the costs of operations and development have increased and so the management of capital is critical, and asset management is very important.
Therefore, the basic message, said Moshiri, is that oil isn’t running out, there is enough capital and investment available, and so “what potion of those $400 billion do I want to come to my country or province?”
Non-conventional shale reserves have changed the energy business, said Moshiri. There are 4500 trillion feet cubed of gas available in un-conventional reserves in Latin America, mostly in Argentina. In the United States, unconventional gas revolutionized the industry and created a surplus of natural gas in North America. Shale oil and gas production created 1.6 million jobs in the United States, added Moshiri, created $930 billion in tax revenues for the U.S. government, and brought in $1.9 trillion in capital investment.
Moshiri said Argentina had the same opportunity. He said Chevron was commited to being in Argentina, it believed there are enough resources in the country, and they believe it’s the right environment to work in. Chevron plans to drill 120 wells in Argentina over the next three years.
“Argentina in the era of unconventional oil and gas can lead or it can lag behind,” he said. “It’s a choice, and it needs to be decided.”
Argentina can lead Latin America in unconventional gas production, he said, which would lead to job creation and increased revenue. He finished by saying that it wasn’t about a lack of resources, “it’s about how we go about developing them. How can we create a blueprint with an objective to get there?”
Watch a video of the Ali Moshiri's presentation: