In November 2007, Petrobras rocked the market with the announcement of the Tupi discovery, a Santos basin megafield off the coast from Rio de Janeiro that holds estimated reserves of 5-8 billion barrels and that could be the world’s largest oil find in the last 20 years. Petrobras will implement a multimillion dollar investment plan to confirm Tupi reserves and develop the technology it will need to get to the oil, which lies more than 5,000 meters below the seabed. Meanwhile, in 2008 the company will invest US$1.9 billion on exploring the areas near Tupi, where there is a very good chance of finding further oil.
Full steam ahead
The continuing exploration around Tupi is a good example of multimillion dollar amounts earmarked for Latin American energy projects in the coming years. These are projects intended to develop new hydrocarbon reserves, build hydroelectric plants and fuel processing and refining capacity, as well as the infrastructure to import liquefied natural gas (LNG) in certain countries and in doing so guaranteeing their energy security. 2008 should see the start of operations at South America’s first LNG plant, in Chile, followed shortly thereafter by another in Brazil.
The thirst for energy has also spurred several other energy megaprojects. While the hydroelectric complex that Spanish-controlled Endesa and Chilean generator Colbún want to build in southern Chile is awaiting the respective authorizations, in Brazil the government awarded the concession for the 3,150MW Santo Antonio hydro project on the Bolivian border to a consortium headed by the Brazilian construction firm Norberto Odebrecht and state power company Furnas. The list continues with the 2,400MW Pescadero Ituango hydro project in Colombia, being developed by Empresas Públicas de Medellín
HEAVY METAL
In the mining sector, the thirst for metal in China and the rest of the world is pushing large investments. Brazil figures strongly on the projects map, with ambitious iron and nickel production projects, such as MMX’s Minas-Rio System and Vale’s Carajás expansion and Onça Puma construction. In Chile, Anglo American increased the budget for the Los Bronces mine expansion, near Santiago, to US$1.7 billion, while local company Antofagasta Minerals is set to start construction on the US$1.5 billion Esperanza project. In Peru and Mexico there are also important projects scheduled for 2008, such as Tía María and Peñasquito
2008 may also bring news regarding Pueblo Viejo, a gold project owned by Canadian companies Barrick Gold and Goldcorp in the Dominican Republic. Estimated investment is US$2.1 billion - US$2.3 billion, which would make it one of the largest projects in Latin America and would put the Dominican Republic on the world mining map.
CONNECTIONS
In infrastructure, meanwhile, work got underway in 2007 on the Panama Canal expansion, which is at the top of the projects tree and will keep regional construction, engineering and contracting firms busy in 2008. But there is much more in the portfolio, such as Brazil’s late-2007 concession of federal highways, and which will mean US$11.5 billion investments over the 25-year terms of the contracts. Spanish firm OHL won the majority of the concessions, and it alone will invest US$3 billion between 2008 and 2013 in the concessions it picked up.
In Mexico, the tender for line 12 of the Metro and a second level for a 20-kilometer section of the Periférico highway in Mexico City are the main projects in a period that promises a lot of sector developments.
2008 is shaping up to be an intense year for construction projects in the region. This time, unlike other occasions in the past, there won’t be financing bottlenecks. In a world living with construction fever, equipment and professional scarcity is the big obstacle this time to the new wave of projects..
