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VENEZUELA NO. 1 OIL IMPORT SOURCE IN S. AMERICA

Aug. 10, 1992

With the exception of Venezuela, the U.S. is unlikely to import much oil from South American countries through 2010, the General Accounting Office reports. GAO, a congressional watchdog agency, noted the U.S. imports about 4% of its oil from Colombia, Ecuador, and Trinidad and Tobago and possibly could import from Argentina, Bolivia, Brazil, Chile, and Peru in the future. It said the eight countries' crude oil reserves are expected to increase about 30% by 2000, then slide about 2% by 2010.

With the exception of Venezuela, the U.S. is unlikely to import much oil from South American countries through 2010, the General Accounting Office reports.

GAO, a congressional watchdog agency, noted the U.S. imports about 4% of its oil from Colombia, Ecuador, and Trinidad and Tobago and possibly could import from Argentina, Bolivia, Brazil, Chile, and Peru in the future.

It said the eight countries' crude oil reserves are expected to increase about 30% by 2000, then slide about 2% by 2010.

Their oil production is expected to climb about 21% over 1990 by 2000, then level off until 2010. By 2000, only Colombia, Ecuador, Peru, and Trinidad and Tobago will have the potential to export crude, with Ecuador becoming a net oil importer by 2010.

GAO said "As a group, the eight countries examined for this study are likely to remain net oil importers. Ac-cording to the Department of Energy, their combined net oil imports are expected to climb from 226,000 b/d in 1990 to 1.8 million b/d by 2010.

"Although countries such as Brazil are expected to have significant increases in oil production, they will remain net oil importers because increases in their domestic oil consumption are expected to outpace production increases.

"Brazil is responsible for about 75% of the group's expected net oil imports through 2010, followed by Chile and Argentina as the next largest potential net oil importers."

GAO noted the eight countries have undertaken various policy reforms to encourage foreign and private investment in their petroleum industries. Reforms include converting government owned or controlled oil companies to private entities and removing investment and ownership restrictions on foreign investors.

"However, the eight countries need to invest significant amounts of capital in their petroleum sectors to realize even their limited potential as oil producers."

The report estimated the countries will need about $6.4 billion/year in investments to sustain their oil exploration, production, refining, and distribution capabilities.

The agency prepared the report at the request of Rep. Ron Wyden (D-Ore.), chairman of a House small business subcommittee.