Latin America Leads in 2008 Crude Oil and Gas Discoveries

But despite its considerable oil and gas deposits, Latin America still faces some of the same challenges that have repelled investors before.

This year's discoveries - five in Brazil, one in Peru and one in Bolivia -- and other major finds in recent years, are bringing about a rebirth for the region in the eyes of international oil companies that had curbed investment due to political instability and aging fields.

The new discoveries are especially important for Brazil because if they are developed, they could turn the country into the largest producer in Latin America, displacing Venezuela and Mexico, and join the ranks of the top ten producers in the world.

The finds are also key for Brazil's state-run oil company Petroleos Brasileiro SA, or Petrobras, which owns a large stakes in most of the large fields.

"When it comes to oil exploration, Latin America has been forgotten and pushed into the background by other regions like West Africa and the Middle East," said Francisco Bello, director of the Americas at global energy consultancy IHS. "But these new discoveries are making companies realize the region, and especially Brazil, have enormous potential."

Among the largest discoveries are three gigantic fields in the Santos basin off the Brazilian coast that are believed to hold billions of barrels of oil reserves, although official estimates haven't yet been made. The finds in Peru and Bolivia - which contain solely natural gas - are bigger than the seventh, eighth and ninth largest oil finds this year in Iran, Australia and Egypt respectively, according to IHS.

Author: Ksenia Kochneva