Summary: Shale Gas Development in Latin America

By Meghan Keane

A COA event examined how Argentina, Brazil, Colombia, and Mexico can overcome obstacles to expand their shale gas industries.


  • David Goldwyn, President, Goldwyn Global Strategies, LLC
  • Alexander Robart, Principal, PacWest Consulting Partners
  • Kirk Sherr, President, Clearview Strategy Group, LLC
  • Christian Gómez, Jr., Director of Energy, Council of the Americas (moderator)
  • Eric Farnsworth, Vice President, Council of the Americas (moderator)


On October 22, Council of the Americas hosted a public discussion on the development of shale gas resources in Latin America. The event was organized by the Energy Action Group to identify the challenges and opportunities of shale development in Argentina, Brazil, Colombia, and Mexico. Speakers agreed countries must overcome significant obstacles to make Latin America’s enormous shale energy potential a reality.

Challenges to Shale Development

David Goldwyn of Goldwyn Global Strategies pointed out that while Latin America holds vast reserves of recoverable shale gas, some countries lack the sufficient technology, capital, and infrastructure to extract the resource. Speakers said that Argentina was in the best position to capitalize on its abundant shale gas supply, ranked second largest in the world after China. It is also the country with the most advanced shale industry in the region, with hundreds of wells drilled and many projects in production. However, political, economic, and regulatory issues have inhibited the development of shale production, speakers noted. 

In Brazil, access to capital is the most significant challenge facing shale production, with many potential investors—including state-run company Petrobras—focused on opportunities posed by Brazil’s offshore pre-salt oil fields. Mexico, the country with the world’s fourth largest shale gas reserves, faces competition from cheap natural gas imports from the United States and ongoing uncertainty surrounding its energy framework in the face of reforms under discussion in Congress. Finally, Colombia does not have as abundant shale gas resources as the other three countries, but panelists believe it has the most competitive energy framework and most energy-friendly regime of any country in the region. 

Finding Access to Capital

One of the largest obstacles to shale development is a shortage of funding for hydraulic fracturing projects, speakers said. Kirk Sherr of Clearview Strategy Group put this need into context. Investors spent $90 billion in the United States on developing shale gas in 2012 alone; in contrast, foreign direct investment in every sector in Latin America last year totaled $180 billion. Sherr noted that without significant improvements in capital market efficiency and easier access to funding, small- and medium-sized companies would face greater challenges in establishing shale gas operations in Latin America. Alexander Robart of PacWest Consulting Partners noted that a diverse array of small, nimble businesses launched the shale revolution in the United States and could be instrumental in commencing Latin America’s own revolution if given the opportunity.

Policy Opportunities to Increase Development

Speakers identified several tools policymakers possess to aid the process of shale gas development. In addition to increasing access to finance, Sherr recommended that governments strive to increase gas demand to incentivize further investment as well as encourage universities to adopt engineering programs focused on hydraulic fracturing to improve the technological expertise of the workforce. Robart identified the gas pricing regime, the regulatory landscape, and infrastructure as three fundamental parameters used to judge the quality of investment opportunities. Goldwyn acknowledged the continuing attraction oil holds for many investors in Latin America, particularly those drawn to Brazil and Mexico’s large offshore fields. He recommended that governments clarify their energy frameworks and provide incentives to potential investors in shale.