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Matthew Smith

Matthew Smith

Matthew Smith is Oilprice.com's Latin-America correspondent. Matthew is a veteran investor and investment management professional. He obtained a Master of Law degree and is currently located…

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The 5 South American Countries With The Largest Natural Gas Reserves

  • Argentina's Vaca Muerta shale formation propels the nation to have the third-largest proven natural gas reserves in South America.
  • Brazil is on track to become the world's fourth-largest oil producer, with associated natural gas production set to surge.
  • Venezuela, despite its economic woes, holds South America's largest proven natural gas reserves and is making moves to enter the export market.
South America

South America is fast emerging, once again, as one of the world’s hottest drilling locations, with the continent believed to contain considerable volumes of commercially extractable natural gas. While offshore Guyana is garnering the lion’s share of attention from foreign energy companies, it isn’t the only country in South America benefiting from significant hydrocarbon wealth. Argentina, despite its economic woes, is profiting from a massive unconventional hydrocarbon boom that could see the country emerge as a regional natural gas hub, while production from Brazil’s offshore oil fields is growing at a steady clip. These events are challenging South America’s traditional energy dynamics, with Venezuela, Colombia and Bolivia no longer the continent’s leading hydrocarbon producers. Here are South America’s five leading countries by proven natural gas reserves.

#5 Peru

The troubled Andean country of Peru, which is locked in a lengthy political crisis, possesses the fifth-largest proven natural gas reserves in South America. Those reserves, at the end of 2022, totaled 8.4 trillion cubic feet, which is 19% less than a year earlier and nearly half of the 15.4 trillion cubic feet reported a decade earlier. During August 2022, Peru pumped an average of 1.27 billion cubic feet of natural gas per day, which was 2% higher than a month earlier and a notable 16% greater than the same period during 2022. Those numbers demonstrate Peru is successfully scaling up natural gas output in response to growing domestic energy demand but needs to attract greater investment in hydrocarbon exploration and development to boost reserves.

Peru’s hydrocarbon sector has been roiled by crisis and conflict for many years. Frequent anti-government and oil industry protests in Peru’s remote Amazon region have forced the shuttering of oilfields and Peru’s northern pipeline, which connects those fields to the Pacific Coast. Those protests are triggered by the immense environmental damage caused by oil industry operations and the lack of spending by the government in Lima on crucial infrastructure in Peru’s Amazon. This is weighing on Lima’s efforts to attract crucial foreign energy investment needed to boost proven reserves and production.

#4 Bolivia

Once known as the beating heart of South America’s natural gas industry, Bolivia’s fossil fuel fortunes are fading. It is estimated that the landlocked Andean country has proven natural gas reserves of nearly 9 trillion cubic feet, down from 11 trillion cubic feet a decade ago. That isn’t the only sign of an industry in decline. For June 2023, Bolivia pumped 1.25 billion cubic feet of natural gas per day, which, despite being 3% greater than a month prior, was a worrying 15% lower year over year. Natural gas production has plunged sharply in recent years, with 2022 output of 1.400 billion cubic feet per day 11% lower than 2021 and considerably less than the 1.85 billion cubic feet per day extracted a decade earlier.

For these reasons, there is growing uncertainty regarding the future of Bolivia’s hydrocarbon sector, which was once responsible for keeping the lights on in neighboring Argentina. Indeed, Bolivia’s natural gas production has been steadily declining since 2015 and is expected to plunge well below one billion cubic feet per day in coming years due to aging mature gas fields, a lack of discoveries and a dearth of industry investment. Industry analysts believe that the end of the country’s once-mighty natural gas industry is close, with natural gas output expected to decline calamitously over the near-term. According to industry consultancy Wood Mackenzie, Bolivia’s natural gas production could fall to as low as 400 million cubic feet per day by the end of this decade.

#3 Argentina

In a surprising development, Argentina, which recently avoided yet another sovereign debt default and is struggling with triple-digit inflation, now has the fourth-largest proven natural gas reserves in Latin America. At the end of 2022, data from the Ministry of Economy showed that proven natural gas reserves totaled 15.4 trillion cubic feet, which is not only an 11% increase over a year earlier but a stunning three times greater than a decade earlier. That incredible growth can be attributed to the ongoing exploitation of the Vaca Muerta shale formation, which didn’t start in earnest until 2013 after the government of Cristina de Kirchner nationalized Repsol-owned YPF. The ongoing exploitation of the Vaca Muerta saw Argentina’s natural gas production surge to an all-time high of nearly 5 billion cubic feet per day during August 2022. While output has declined since then, Argentina still lifted an average of 4.9 billion cubic feet for August 2023. Production will keep growing with YPF budgeting investment of $2.3 billion for its shale operations during 2023 with a view to boosting natural gas production by 15% compared to 2022.

The Vaca Muerta, with an estimated 16 billion barrels of oil and 308 trillion cubic feet of natural gas, is believed to contain the second-largest shale gas reserves in the world. The ongoing development of the geological formation, which has been compared to the prolific Eagle Ford shale in Southern Texas, will see Argentina emerge as a major hydrocarbon producer and exporter in Latin America. This will allow Argentina to dial down energy imports, especially natural gas from neighboring Bolivia, which will go a long way to reducing a massive trade deficit and repairing a broken economy.

#2 Brazil

South America’s largest oil producer, Brazil, also possesses the second-largest natural gas reserves on the continent, which total 14.4 trillion cubic feet. Most of those reserves are contained within Brazil’s prolific offshore pre-salt fields and are associated with oil production. During July 2023, Brazil’s hydrocarbon output soared to a record high of 4.48 million barrels of oil equivalent, 78% weighted to oil, which was 3.6% greater than a month earlier and a whopping 17.5% higher year over year. Natural gas output for the month hit an all-time high of 5.4 billion cubic feet per day, which was 1.2% higher month over month and a notable 13.6% greater than a year earlier. 

Natural gas production in Latin America’s largest economy will continue to grow at a solid clip. The government in Brasilia is committed to boosting oil production to 5.4 million barrels per day, which will see Brazil become the world's fourth-largest petroleum producer. This initiative will drive greater natural gas production with the fossil fuel, a byproduct of oil extraction from Brazil’s offshore pre-salt fields. Brazil’s Energy Ministry is focused on boosting petroleum output to 5.4 million barrels per day by 2029, which, if achieved, will make Brazil the world’s fourth largest oil producer. The ministry expects natural gas output to expand by 74% over the same period to more than 9 billion cubic feet per day, seeing Latin America’s largest economy overtake Iran to become the world’s third producer of the fossil fuel behind Russia in second place and the U.S. ranked first.

#1 Venezuela

Despite having the world’s largest oil reserves of 303.5 billion barrels, OPEC member Venezuela suffered a devastating economic collapse as endemic corruption, malfeasance and strict U.S. sanctions bit ever deeper. Unknown to many oil industry observers is that Venezuela possesses South America’s largest proven natural gas reserves of 203 trillion cubic feet, which also ranks it ninth globally, behind the United Arab Emirates and ahead of Nigeria. More than 80% of Venezuela’s proven natural gas reserves are associated with the country’s oil reserves. Various countries are looking to Venezuela’s vast natural gas reserves as a solution for their energy needs.


Despite that considerable hydrocarbon wealth, Venezuela is locked in a deep long long-running economic crisis that began with President Hugo Chavez’s 1999 socialist Bolivarian Revolution. That sparked a massive humanitarian catastrophe which has seen more than seven million Venezuelans flee their homeland since 2015 as the economy imploded and the country spiraled into extreme poverty. There are signs that the crash finally bottomed, with Venezuela’s economy returning to growth during 2021, which, along with White House-backed interim president Juan Guaido fleeing for the safety of the U.S. in early 2023, indicates that strict sanctions have failed.

While national oil company PDVSA continued to export Venezuelan oil in defiance of U.S. sanctions, primarily to China, the OPEC member does not export natural gas. That is all about to change with the autocratic regime of President Nicolas Maduro making deals with energy companies, including Spain's Repsol and Italy's Eni, to receive natural gas export licenses, which reportedly will be signed before the end of 2023. There is also the PDVSA-owned Dragon offshore gas field, with the U.S. granting Trinidad and Tobago a license to develop the asset. Colombia’s government, in late 2022 signed a contract to facilitate the importation of natural gas from Venezuela. 

By Matthew Smith for Oilprice.com

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  • George Doolittle on September 14 2023 said:
    Great Britain has not only enormous natural gas reserves but also has a well developed market, the rule of Law, is not Russia, has the infrastructure both upon Great Britain but also through this access to the EU market, has its own very well developed financial system, has massive private sector actors in said space, still has a "special relationship" with the United States both the largest consumer and producer of natural gas etc

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