Utilizing their mineral wealth, Brazil and Argentina are reacting to the surge in energy costs. However, they do not have the necessary infrastructure.
Brazil plans to increase oil extraction at US request. At the same time, Argentina is pursuing higher rates of shale gas extraction. A key reason for the two countries’ plans is to boost energy costs, which in turn boosts inflation. However, the lack of proper infrastructure is an obstacle to the aspirations of Brazil and Argentina.
Washington hopes Brazil’s oil could partially offset shortages of Russian energy imports. Last year, Petrobras exported 1.2 million barrels of oil, making Brazil the first country to export oil to South America. However, because the country does not have suitable refineries, it is obliged to import, despite the existing reserves, 30% of its fuel needs. Rodrigo Leaio, of the Institute for Strategic Oil and Gas Studies, explains: price for the lack of investment in infrastructure in the last six years “.
“Argentina does not have a proper pipeline network”
The lack of modern infrastructure is also a problem in neighboring Argentina, which has Patagonia’s second largest reserves of shale gas in the world. The country’s Energy Minister Dario Martines recently stated that there are no restrictions on increasing gas production. “Things are not so easy,” said Nicholas Gandini, a journalist specializing in energy issues. gap created by losses in Russian energy imports “.
The economic consequences of the war in Ukraine have now reached as far as Latin America. In Argentina, which is going through a chronic economic crisis, inflation of 50% is expected to increase even more in the near future. This calls into question the recent agreement with the IMF to repay Argentina’s large foreign debt.
Anne Herberg (SWR Rio)
Edited by: Stefanos Georgakopoulos
Source: Deutsche Welle
Source: Capital
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