Local Content Frameworks in Latin American Oil and Gas sector: Lessons from Ecuador and Colombia, Grupo Faro (2016)

Local Content Frameworks in Latin American Oil and Gas sector: Lessons from Ecuador and Colombia

Natural resources represent the main source of revenue for most Latin American countries. This trend increased during the boom in commodity prices when oil, gas and mining countries from the region achieved promising outcomes. Latin American countries are home to 20.1% of proven oil reserves in the world (British Petroleum, 2015). Oil and gas producing countries in the region include Argentina, Bolivia, Brazil, Colombia, Ecuador, Mexico and Venezuela, together home to 60% of proven oil reserves in the Americas. In fact, the region’s oil and gas reserves rank second to the Middle East. In all of these countries, the oil and gas sector plays a relatively important role in the economy. The share of the oil and gas sector in relation to Gross Domestic Product (GDP) is higher than 30% in Venezuela (42%), Bolivia (33%) and Mexico (30%). For this group of countries, more than 50% of their total exports are oil and gas. For a second group conformed by Colombia (28%), Ecuador (28%), Argentina (23%), and Brazil (19%), the oil and gas sector represents less than 30% of total GDP. Table 1 presents these and other characteristics of the oil and gas sector in Latin American countries.

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