Over approximately the past two decades, the Latin American and Caribbean region has been a major producer of energy, especially oil and gas, in the Western Hemisphere. During the 1970s and 1980s, national governments and the state energy companies played the most important role in Latin American energy development. Numerous national energy companies were established, and a huge amount of investment was made in the energy sector by the national governments. Foreign and private domestic investment was constrained, however, and many countries plunged deeply into external debt crises. The energy sector made the largest contribution to these national debts, yet the lack of foreign investment still hindered the sector's development during the first half of the 1980s. Since the late 1980s, many countries have adopted a different strategy. Instead of continuing to shun foreign investors, barring them from energy resource development and monopolizing everything through national energy companies, these countries began to change their constitutions, regulations, and laws to attract foreign investment. They also began to restructure, reorganize, and privatize their national energy companies to make them more competitive and efficient.
This book is written against the background of the high priority given by the major producers of oil and gas (which are the main energy sources in the region other than hydroenergy) to the improvement of the investment climate for foreign and domestic private investors in their hydrocarbons sector development. The current situation, the major trends in the region's energy sector during the 1990s, and the future energy growth are the focuses of the book. It is the first comprehensive study of energy in Latin America -- not only oil and gas but also coal, hydroelectricity, and nuclear power. The energy issues are analyzed in the context of global energy markets, as well as regional markets in the United States and the Asia-Pacific region.