MercoPress. South Atlantic News Agency

Paraguay downplays discovery of oil in commercial volumes

Oil camp in the forrest

The Paraguayan government confirmed the existence of oil deposits in an inhospitable area to the north of the country. However one long year must elapse before the deposits can be considered commercially exploitable.

The possibility of finding oil and natural gas in the extended and scarcely populated Chaco region, bordering with Bolivia, Argentina and Brazil has triggered the interest from international oil corporations and generated expectations in landlocked Paraguay which imports all of its petroleum. "There's a great exploitation potential" said Mines and Energy Deputy minister Fabio Luccantonio in an interview with the local media, but "only in the course of next year will the government be in a position to announce whether the deposits hold commercially exploitable volumes". Luccantonio was asked about a release from a US company which reported in its web page that it had detected the existence of deposits containing 129 million barrels of recoverable oil in a 3.000 hectares stretch of land in the Chaco county of Alto Paraguay. Pantera Petroleum's report is based on data collected by other companies that surveyed the area decades ago but which has been recovered and updated with modern technology. But Luccantonio pointed out that the "different companies that have been involved in exploratory operations have so far only certified the existence of traces of hydrocarbons and not precisely one deposit that can be considered commercially viable". "The news has been released on several occasions and now again because of the pressure from US companies…and the urgent need globally of new deposits. It is an announcement that must be analyzed with extreme caution", said the Paraguayan official in a report in the country' main daily ABC. In the late twenties, early thirties Paraguay went to war with Bolivia over the Chaco because it was then believed to hold vast resources of hydrocarbons. But exploration in Paraguay did not begin until the end of the forties; however efforts have not been consistent because of the high costs. According to official information from the Paraguayan government 50 wells have been drilled in the country with 20 of them indicating traces of gas and oil. Pantera Petroleum is associated with the local company Boreal Petróleos S.A. to undertake prospecting tasks in the north of the country close to the border with Bolivia. The consortium has five quadrants in a licenced area of two million hectares. George Botta, president of Boreal Petróleos was quoted by La Nacion from Paraguay stating that further surveying was needed and drilling to confirm the discovery. "There are indications…but confirmation of oil is hard to estimate until actual drilling is done", said Botta.