Paraguay’s government oil company Petropar is trying to find a foreign associate for oil exploration in the country’s vast Chaco region. Apparently companies from Russia and Bahrain have shown certain interest but Paraguayans admit the difficulties.
The first step is to award a concession for exploration in an area of 800.000 hectares, apparently close to the Argentine province of Formosa where a modes Palmar Largo basin in under exploitation.
“Paraguay has no ways to defend its economy unless it has management over some crude. We are totally dependent on imported fuel and the world situation reminds us all the time about it” said Juan Gonzalez Meyer head of Petropar.
“In spite of all the bio-fuels and energy alternatives it is estimated that the world will continue to depend on crude for the next fifty years so it is imperative that Paraguay begins exploring for oil or gas in our territory and our company’s charter allows us to do so”, added Gonzalez Meyer.
He admitted that besides the exploration block to be awarded a lot of financial support is needed, “drilling a well in the region costs minimum 5 million US dollars plus other expenses and depending on the basin the bill soars to 15 million USD”
“For this we need a joint venture and Bahrain and Russian companies have contacted us and visited Paraguay recently. But we would also like to see Brazil’s Petrobras interested since they have expertise and a long proven experience in South America”, added Petropar president.
However he also admitted that exploration and exploitation of oil has always been in the hands of the big international corporations “that are not interested in extracting oil from small countries, with low consumption unless they can sell overseas, and this would mean shipping the oil along the river Paraguay and Parana which is a problem”, since it crosses Argentine territory.
In other words, “our market it’s not an interesting business for oil companies, even when it is for us”, concluded Gonzalez Meyer.