Azerbaijan’s energy industry is one of the world’s oldest and remains a crucial hydrocarbons supplier in the Caspian Sea region. Its offshore basins hold significant reserves that are produced mainly by the State Oil Company of Azerbaijan Republic. The NOC is responsible for negotiating and signing PSCs and developing the nation’s resources. BP is the largest foreign investor in the nation and has operated in the country since 1992.
Most of the country’s oil and gas production is produced from its Azeri–Chirag–Gunashli fields, which is pumped onshore by pipeline to the Sangachal terminal south of Baku. Much of the oil produced is exported towards Europe through an 850-kilometre pipeline to its neighbour, Georgia.
The country is transitioning its energy industry from its traditionally oil-centric production to becoming a growing gas producer and exporter. The Shah Deniz field located 70 kilometres from Baku in water depths of up to 1,600 metres is one of the world’s largest gas and condensate fields and accounts for most Azerbaijan’s natural gas reserves. The development produced its first gas in 2006.
While practical development of renewable energy sources has been limited, the country has significant potential. Azerbaijan generates about 8% of its electricity from large hydropower installations. The country aims to reduce greenhouse gas emissions by 35% by 2030 from its emissions figures in 1990, which will involve revamping a substantial energy industry that accounts for the majority of its GDP and around 90% of its exports.
Colombia’s oil and gas industry is a critical part of the country’s economy, representing over 10% of national earnings and around 35% of foreign investment despite dwindling reserves. The Andean nation is Latin America’s third-largest oil producer after Brazil and Mexico, with most of its resources bound for export. The industry is overseen by the National Hydrocarbons Agency (ANH), which hands out PSCs and enforces state policies.
To recover its falling reserves, the ANH is focused on organising bid rounds and attracting interest in exploration activities. The state entity set out a roadmap that includes awarding 200 blocks and drilling 800 wells between 2021 and 2040 with the aim of improving reserves by 150% and making the nation self-sufficient in meeting its hydrocarbons demand. While much of Colombia’s oil and gas resource wealth is hidden in deep offshore regions or in previously inaccessible parts of the hinterland, modern technology and techniques have made E&P activities plausible.
Another source of opportunities lies within the country’s logistics sector. Due to the lack of developed oil and gas infrastructure, investment in hydrocarbons-related transportation is required. Colombian pipelines are congested, and the state is actively working on easing red tape to attract international partners to build new assets.
“We want to position Colombia as the main destination for investments in the energy sector in the entire region,” Colombian President Iván Duque told The Energy Year. “For this, we have important fiscal incentives for the hydrocarbons sector and for the alternative energy sector.”
Equatorial Guinea’s oil and gas industry rose dramatically in importance after large discoveries were first made in 1996. Since then, development of its hydrocarbons resources has accelerated and now makes up around 60% of the country’s GDP. Despite a land area of just 28,000 square kilometres, the nation holds some of the largest oil and gas reserves on the continent, which drove it to become a member of OPEC in 2017. E&P activities are overseen by the Ministry of Mines and Hydrocarbons, which hands out PSCs and regulates activities.
The majority of the country’s oil and gas production and export come from the offshore Zafiro field on Block B, operated by ExxonMobil. on the Gulf of Guinea, close to the country’s border with Nigeria. The development is supported by several FPSOs that have been juggled on the block since it began production in 1996. Further exploration activities are required to balance the nation’s falling reserves.
Equatorial Guinea is seeking foreign investment to make the nation a trade hub for gas in the region, including with Cameroon and Nigeria. The Gas Mega Hub initiative set down by the government looks to develop and expand onshore processing infrastructure, with additional hubs throughout the region to offtake gas from stranded reserves on the country’s borders. Although the country of 1.4 billion has continued to make efforts to diversify its economy beyond hydrocarbons-based revenues, commercialisation and fiscal challenges remain its key hurdles.
Brazil’s oil and gas industry has grown significantly due to the country’s massive hydrocarbons potential. The nation has the second-largest reserves in South America after Venezuela, with more than 95% of its oil and gas offshore. The nation boasts the largest recoverable ultra-deep oil reserves in the world, with the International Energy Agency forecasting that 50% of the world’s offshore oil could come from Brazil in 2040.
The industry is overseen by the National Agency of Petroleum, Natural Gas and Biofuels, known as ANP, which hands out exploration and production licences and ensures compliance with state regulations. Hydrocarbons are produced predominantly by Brazilian NOC Petrobras. The company held a monopoly on the industry for around 40 years until the market opened up in 1997. Since then, the sector has attracted super-majors such as Shell, BP, Chevron and Exxomobil and local independents.
A rise in production from the prolific Santos and Campos basins has also played a part in attracting IOCs to Brazil’s downstream sector. To attract FDI and participation in the market, Petrobras recently began selling off a predominant part of its refining capacity. While Petrobras remains the largest player in the local downstream sector, it has been joined by international players Repsol, Shell and Chevron.
Due to the country’s large size, a vast pipeline infrastructure is necessary to link the various oil-producing regions, refineries, terminals and distribution points. Most of the country’s pipelines are located in the southeast and northeast of the country. The nation’s midstream sector is supervised and controlled by the National Centre for Logistics Management.
While still one of the world’s largest oil and gas producers, Brazil’s renewable energy sector has seen titanic growth and accounts for around 80% of the country’s energy mix, predominantly through its hydropower stations and biofuels and waste facilities. Brazil is the third largest hydroelectricity producer after China and Canada. The government is looking to grow the mix of solar and wind facilities to meet its large potential and avoid losses caused by droughts.
Trinidad and Tobago’s oil and gas industry has had operations for more than a century and now supports the largest hydrocarbons production in the Caribbean. In the 1990s, the country successfully transitioned from an oil-dominated industry towards becoming a major gas producer. The country sits in the top ten list of LNG exporters in the world, with one of the largest LNG processing plants in the Western Hemisphere. The energy industry remains a key pillar for the economy, representing around 45% of its GDP despite the country’s efforts to diversify its industrial output. The upstream sector is overseen by NOC National Gas Company and has attracted many international stakeholders such as BP, Shell, Proman, Perenco and BHP.
Due to a slowdown in upstream investment, the island has experienced a decline in natural gas production since 2014, something expected to continue in the near term. Because the country has such an abundant pool of gas resources, its gas processing and petrochemicals sectors have thrived. However, severe gas shortages in recent years have forced several midstream and downstream companies, including Atlantic and Methanol Holdings, to scale back activity. While traditional hydrocarbons reserves have dwindled, the island nation has made significant recent finds in its deepwater blocks to balance the country’s gas reserves with its production rate.
“The government is securing investors for the new industrial estates in its drive to expand foreign direct investment, diversify the economy and to create employment opportunities for the people of Trinidad and Tobago. The focus on the energy industry is to increase production of both oil and natural gas,” Franklin Khan, former minister of energy and energy industries, told The Energy Year. “We are now in full thrust towards a trajectory of sustained growth and development and contributing to our sovereign wealth whilst stimulating foreign direct investment in our economy. It is a clear signal that our energy sector is the place to invest.”
Russia’s oil and gas industry is one of the nation’s largest industrial focuses. The country is now one of the top three hydrocarbons producers worldwide and has the world’s second-largest natural gas reserves. The country is also one of the top five LNG exporters. The oil and gas industry plays a huge part in the country’s economy, traditionally making up around 45% of the federal budget. With its landscape consisting mostly of ageing oil and gasfields, the northern nation is funnelling its efforts to further develop its brownfield assets and raise exploration efforts in its unconventional greenfield options previously not viable due to technological restrictions.
While deposits exist in many areas throughout the country, producing assets are focused mainly in western and eastern Siberia. The Arctic has become increasingly important for hydrocarbons production, particularly gas. Most of Russia’s E&P efforts come from domestic firms. After a long period of mergers, the largest players in the market are Rosneft, Lukoil, Gazprom and Novatek. Following the collapse of the Soviet Union, the nation initially privatised its oil industry, but has since reverted to state control. Russia is a member of OPEC+.
The nation has extensive midstream capabilities for oil and gas, including the world’s longest crude pipeline – the Druzhba pipeline – that carries oil towards the European market. Conventionally around 60% of the country’s oil production was transported to OECD nations in Europe and fed around 20% of Europe’s refinery throughput, though recent conflicts have changed the paradigm. Europe’s reliance on Russian gas had grown over the last decade due to production drops in European countries. Before the war with Ukraine a variety of routes made it possible for Russia to feed European gas consumption without being reliant on transport directly through a single surrounding nation, namely the Nordstream, Blue Stream and Turkstream pipelines. But since the war with Ukraine broke out Russia has had to look to other markets to maintain its exports in the face of economic sanctions.
Russia has made large efforts to diversify its export markets towards Asian nations, including investment in pipelines that pump hydrocarbons directly to China, the latter of which has long remained the largest single buyer of Russian oil.
The world’s third largest holder of oil reserves, third largest natural gas producer and biggest source of US energy imports, Canada – fuelled by abundant oil sands – is now looking east to Asian markets as US demand levels off, production rises and the Keystone XL pipeline project drags on.
Chinese companies, including PetroChina and its China National Petroleum Corporation parent company have invested in the oil sands and other parts of Canada’s energy sector.
The participation of international oil companies, both private and state-owned, in Canada’s oil industry has risen rapidly. With 168 billion barrels as of the end of 2013, the oil sands represent 96 percent of Canada’s oil reserves. However, getting oil sands bitumen to market is no easy task. In order for the oil sands region to reach its potential, significant challenges must be overcome.
Undaunted by the challenges and renowned for its innovative companies and operators used to working in unconventional reservoirs Canada is determined to get maximum benefit out of its massive supply of hydrocarbons, including its 2 tcm (71 tcf) of proved natural gas reserves.
