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Paraguay Petroleum
Paraguay imported 100 percent of its petroleum in the late
1980s. Petroleum was imported primarily from Algeria because
Paraguay's only petroleum refinery was designed for "Saharan blend"
oil. The refinery, located at Villa Elisa, had a 7,500-barrels-per-
day capacity, very small by Latin American standards. Paraguay's
refinery capability was limited in terms of products, causing the
country to import high-priced derivatives such as aviation fuel,
premium gasoline, and asphalt. The price of oil was high because of
the complex transportation required through Argentina on the Río
Paraná and Río Paraguay. Paraguayan Petroleum (Petróleos
Paraguayos--Petropar)--owned 60 percent by the government and 40
percent by the private firm Paraguayan Refinery (Refinería
Paraguaya)--imported all of the country's petroleum. Petropar was
generally viewed as a profitable and well-managed enterprise. Esso
Standard (Exxon), Paraguay Shell, and the Paraguayan company
Copetrol marketed all petroleum products to the public with the
exception of diesel and fuel oil, which were sold by Petropar.
Paraguay became increasingly concerned with its oil dependence
following the quadrupling of world oil prices in the autumn of
1973. Although there was enough growth in other sectors of the
economy to offset the negative consequences, the crisis nonetheless
rekindled the interest of policy makers in oil exploration. As a
result, the legislature passed sweeping new regulations to promote
oil exploration by multinational companies. Despite having some of
the most liberal petroleum legislation in the world, Paraguay's
limited prospects and severe lack of infrastructure in the Chaco
dissuaded most companies from drilling, however. Indeed, from 1944
to 1986 only forty-three wells had been drilled in Paraguay.
Foreign firms conducted petroleum exploration under the
supervision of the Ministry of Public Works and Communications.
Most oil exploration in the 1980s took place in Carandayty Basin on
Paraguay's western border with Bolivia and in the Curupaity,
Pirity, and Pilcomayo basins bordering Argentina. Active
exploration in Bolivia near its border with Paraguay and oil
discoveries in Argentina only fifteen kilometers from Paraguay's
border heightened expectations of oil discoveries in Paraguay.
Because of Paraguay's complicated geology, however, oil exploration
was more difficult than originally anticipated and required
sophisticated Brazilian technology. With or without oil
discoveries, the government was contemplating the construction of
an oil pipeline to Brazilian ports to import oil, or, in the case
of a large oil discovery, to transport oil exports.
Data as of December 1988
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