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WEEKLY NEWSLETTER
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Chile
Index
Figure 9. Primary Petroleum, Natural Gas, and Minerals
Activity, 1993
Source: Based on information from Orlando D. Martino (ed.),
Mineral Industries of Latin America, Washington, 1988, 32;
Carlos M. Bechelli and Roberto D. Brandt, "Six Latin American
Countries Could Join in New Gas Market," Oil and Gas
Journal, October 21, 1991, 46-52' and Economist Intelligence
Unit, Country Report: Chile, [London], No. 4, 1993, 20.
Chile derives its energy mainly from petroleum and
natural gas
(60 percent), hydroelectric power (25 percent), and coal
(15
percent). Unlike other countries in Latin America, Chile
has been
able to make effective plans for the development of the
electricity
sector. No bottlenecks are expected in this sector, and
most
analysts predict that it will continue to expand at a
healthy pace.
The country is endowed with ample hydroelectric resources
and has
an extensive electric net formed primarily by
hydroelectric plants.
For example, the Tocopilla station feeds electricity to
the huge
Chuquicamata and La Escondida copper mines, as well as to
cities in
northern Chile. An interesting feature of the system is
that,
although the central net is thoroughly interconnected,
there are
many individual producers. Since the late 1980s, there has
been a
marked increase in the importance of small ("other")
producers (see
table 29, Appendix).
As part of the final stages in the Pinochet regime's
privatization process, beginning in 1985 the two large
state-owned
utilities, the National Electric Company (Empresa Nacional
de
Electricidad--ENDESA) and the Chilean Electric Company
(Compañía
Chilena de Electricidad--Chilectra), both Corfo
subsidiaries, were
privatized. Now the entire electricity sector basically is
run by
private companies. The government, however, established a
supervisory system that ensures electricity companies a
fair
return. This keeps prices under reasonable control.
Domestic petroleum production has suffered a steady
decline
since 1982, from 2.48 million cubic meters to 1.38 million
cubic
meters in 1990, a reduction of 46 percent. In an
environment of
fast economic growth and rising demand for energy, this
decline in
production has translated into a much faster decline in
the share
of domestic production in total consumption. Although
domestic
production satisfied 35 percent of domestic consumption in
1986, in
1992 it met only 13 percent of Chile's needs.
Consequently, Chile's
oil import bill more than doubled between 1986 and 1990.
The
country's oil reserves, declining at a rate of 10 percent
a year,
stood at 300 million barrels in early 1992.
Petroleum exploration efforts have been unsuccessful
since the
1970s. The National Petroleum Enterprise (Empresa Nacional
de
Petróleo--ENAP) has diversified its activities outside
Chile with
production contracts with Argentine, Brazilian, Colombian,
and
Ecuadorian companies. Exploration activities have
increased in the
Atacama Desert and the Strait of Magellan. In late 1992,
ENAP began
installing a US$18 million oil-drilling platform in Punta
Arenas,
the first of four that the company planned to operate in
the Strait
of Magellan in a joint venture with Argentina's
state-owned oil
company. About two-thirds of the crude oil produced in
Chile came
from offshore platforms in the Strait of Magellan. In 1991
domestic
consumption was averaging 138,527 barrels per day (bpd)
and was
growing at a 5 percent annual rate.
Pipelines for crude oil products totaled about 775
kilometers
in length; for refined petroleum products, about 785
kilometers;
and for natural gas, about 320 kilometers. In mid-1992
Chile and
Argentina agreed to build a 459-kilometer trans-Andean
pipeline,
designed to carry US$500 million in crude oil a year, or
94,000
bpd, from Neuquén, Argentina, and to help meet Chile's
need for
refined oil. Both countries also approved a US$1 billion
project to
build a 1,200-kilometer gas pipeline to feed Argentine
natural gas
to Santiago and other Chilean cities by 1997
(see
fig. 9).
In 1989
Chile's proven natural gas reserves totaled 46.1 billion
cubic
meters, of which 41.9 billion cubic meters were onshore
and 4.2
billion cubic meters were offshore.
Data as of March 1994
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