SOUTH AMERICAN TURNING POINTS

Change is afoot in South America. The continent simmers in political and economic pressures. Some of the pressures already have altered business conditions for foreign oil companies. Many more likely will do so soon.

All the main South American oil producing countries have struggling economies, underexplored resources, and great capital needs. That combination has created opportunities for foreign companies in some countries and should in all the others. But nationalistic resistance to foreign participation remains strong, even where foreigners are officially welcome.

Nowhere is this more apparent than in Colombia, where foreign companies made important discoveries during the 1980s. Several guerrilla factions oppose any outside role in Colombia's oil business. Since 1985, they have blown up the crucial Cano Limon crude pipeline at least 115 times, slashing oil output and denying the country revenues it desperately needs.

ON THE BRINK OF CHANGE

Like the other key South American producers, however, Colombia seems on the brink of significant change. The government has scored early victories against drug cartels supplying the guerrillas. Further progress might weaken the groups enough to stop the pipeline attacks and broaden the appeal of this still-promising region.

Another helpful change seems imminent in Colombia's neighbor to the northeast. Venezuela recently said it will renew its welcome to foreign upstream capital. The heavily taxed state oil company, Petroleos de Venezuela SA, recognizes that it can't fund planned investments alone and apparently has won over a nationalistic president. Terms of foreign upstream participation will be important news to the international petroleum industry.

Brazilian Pres.-Elect Fernando Color de Mello should follow Venezuela's lead when he takes office next week. He should try to lift a constitutional ban on foreign participation in upstream petroleum work. He should privatize eligible units of the financially drained state oil company. He should rationalize fuel markets contorted by subsidies and price controls. And he must act quickly; wild inflation threatens Brazil's economy and fledgling democracy.

Argentina is promoting exploration by foreigners and last month offered operating rights to marginal fields owned by state owned Yacimientos Petroliferos Fiscales. But multidigit inflation undermines the economy and jeopardizes the 9 month old government of Pres. Carlos Saul Menem. Reversion to military rule seems possible, which might stall licensing and intensify union resistance to YPF privatization plans.

PRODUCTION DECLINES

South America's two other major oil producing countries must struggle against output declines. Peru's flow slumped last year when the cash-short state oil company couldn't sustain payments to service contractors. The beleaguered country needs more oil discoveries, fewer attacks by Maoist guerrillas in league with coca growers, and a president less inclined than the incumbent toward government economic intrusions. It will elect a new president Apr. 18. Ecuador has economic problems but fewer overt political instabilities than Peru and a record of cooperation with foreign producers. The immediate question is what last year's reorganization of state owned Petroleos del Ecuador SA means to the company's current and prospective coventurers.

So each of South America's principal oil producing countries is at or near a turning point vital to how and whether international oil companies do business there. Companies no doubt understand what's at stake. It will be apparent soon whether South American decision makers share the insight.