By Jennifer Presley, Hart Energy

Latin America has long captivated the world. From the beaches of Cancún to Copacabana and all points in between, near and far, the region provides the rhythm that moves us all. Nowhere is this more visible than in Brazil, home to Samba music and Carnival. The discovery there in 2007 of the Tupi oil field in the Santos Basin presalt elevated the profile of the country and its people even higher.

With an estimated 5 Bbbl to 7 Bbbl of recoverable reserves, the deepwater field renamed Lula in 2010 was the first of many in the Santos Basin. Subsequent discoveries offshore Brazil further secured the country’s role as a global energy producer. While the world marveled at the Carnival-like parade of glamorous presalt discoveries made by Petróleo Brasileiro, other explorers quietly worked the edges of the continent that was once attached to Africa’s hip. In 2008 Exxon Mobil began its exploration activities north of Brazil in the waters offshore Guyana. Jump forward not quite a decade and the supermajor has, along with its partners Hess and CNOOC, announced six significant Guyanese discoveries. All located on the Stabroek Block, five of the discoveries—Liza, Payara, Snoek, Liza Deep and Turbot—are estimated to have total recoverable resources of more than 3.2 Bbbl. The sixth discovery at Ranger was announced in January with appraisal drilling a possibility this year, according to an Exxon Mobil press release.

The discoveries illustrate what analysts at Wood Mackenzie believe the petroleum industry will see more of this year in the Latin America upstream. Portfolio high-grading is steering companies to the region’s deepwater licensing, with exploration prospectivity and access to previously unavailable acreage and reserves driving interest, according to a Wood Mackenzie report. Licensing rounds in Brazil and Mexico are expected to draw strong bidding from majors and Asian national oil companies.

Adding to that interest is the decline in deepwater breakevens as compared to U.S. shale plays, the report noted. Hess, for example, cited in its presentation at the 2017 Bank of America Merrill Lynch Global Energy Conference that the Liza Phase 1 development offers superior economics to premier U.S. shale plays, with a $35/bbl breakeven as compared to a $45/bbl breakeven for a Delaware Basin development.

Presidential elections in Brazil, Colombia, Mexico and Venezuela are potential dark clouds on the horizon that might impact exploration and development in the region. But as time has shown, the parade may slow down but it never completely stops.