THE ROLE OF STATE-OWNED OIL COMPANIES IN THE ENERGY TRANSITION OF LATIN AMERICA: THE CASES OF PETROBRAS, YPF, ECOPETROL, AND PEMEX

This article analyzes the role of Latin American state-owned oil companies in the energy transition. Latin America presents great potential for replacing fossil fuels with renewable energies and possesses important reserves of critical minerals, such as lithium. However, there are several obstacles to overcome. Among them, the lack of financial resources for decarbonisation investments, low economic growth, and fiscal austerity policies in the face of the transition’s cost are prominent. In this context of energy industry transformation, state oil companies play a crucial role as they possess productive and financial capacities. These companies face the challenge of balancing oil and gas (petróleo y gas – P&G) production to ensure domestic supply and export potential while making investment decisions in clean energies to gradually replace fossil fuels. Most countries in the region lack medium and long-term strategies to address these challenges. While transnational oil companies from the global North, particularly European ones, have sought to reconfigure themselves as “energy companies” and invest in renewable sources, the main Latin American state-owned companies – such as Petróleo Brasileiro S.A. (Petrobras), Petróleos Mexicanos (Pemex), Yacimientos Petrolíferos Fiscales (YPF), and Empresa Colombiana de Petróleos S.A. (Ecopetrol), analyzed in this article – have pursued various paths in the transition to a low-carboneconomy. Each company’s strategy has been influenced by factors such as the existence of reserves, historical energy use, and differentiated government policies. In this scenario, it is concluded that oil companies are key players in the energy transition in Latin America because they can leverage their economic weight to drive the necessary economic transformations in this process and enhance the utilization of the region’s abundant renewable resources.