ENERGY OPPORTUNITIES FOR INDIA IN LATIN AMERICA: UNDERSTANDING MEXICO’S ENERGY REFORMS
In recent years, Mexico, a major fossil fuel producer, has begun a reform of its legislation to allow domestic and foreign investments in the hitherto state owned crude oil and gas extraction and delivery sectors. In view of decreasing energy exports to the US, Mexico has also started seeking out other large purchasers such as India, a country interested in diversifying its sources of oil and gas. Latin America is becoming an increasingly important partner and energy supplier for India whose oil and gas needs will double in the next two decades.
The International Energy Agency’s World Energy Outlook 2015 (online at https://webstore.iea.org) states that it would be in India’s strategic interest to reduce its over dependence on West Asia for energy. Latin America with its plentiful energy resources has emerged as an alternative partner for India in its quest for energy security. It is rich with abundant resources of both hydrocarbon derivatives and renewable energy. Sources this dual nature of energy resources makes the region an attractive source of not just crude oil and natural gas but also a potential partner in India’s efforts towards sustainable development. Mexico for instance has displayed keen interest in the Indian initiative focusing on harnessing solar energy, which could prove useful for countries in tropical and equatorial regions that have the geographic benefi t of abundant and reliable sunshine throughout the year.
It is also an opportune time for India to look towards the region, as the countries of Latin America open their energy sectors to the world for investments. As opportunities arise, traditional obstacles such as distance and consequently higher transportation costs are being countered with the advent of advanced technologies in shipping and storage. In addition, Latin American trade patterns have been transitioning through a paradigm shift. The traditional consumer of the region’s energy resources was the United States of America (US). However, with the ingress of Canada in the energy supplier market, the share of Latin American trade with the US has decreased, making the region look for new trading partners in energy. The region has no dearth of steady energy suppliers—Brazil, Mexico and Venezuela are home to abundant oil reserves. Venezuela has the largest crude oil reserves in the world, estimated at 298 billion barrels, larger than the Saudi Arabian reserves of 266 billion barrels. The Orinoco Belt too is rich in hydrocarbon based energy resources. Besides conventional crude oil resources, Argentina has shale reserves that are estimated at 58 billion barrels. Bolivia is a major producer of natural gas and the newly discovered oil reserves in Guyana and Suriname may be credited to the same region, although both countries are at times alternately classifi ed as Caribbean.