Essential Oil

A more vital result of the Suez crisis than Panama's pain in the pride (see above) was that Latin American oil suddenly took on new importance to the West. If turbulence stirred by Egypt's nationalization of the Suez Canal slows down the flow of Middle Eastern oil, Europe will have to turn to Latin America.

Last year Latin America produced 885.7 million bbls. of crude, only 300 million less than the entire Middle East, and 88% of it came from a single country, Venezuela. Already the world's No. 1 oil-exporting country. Venezuela a fortnight ago officially confirmed reports (TIME, July 16) that it had granted new concessions in Lake Maracaibo, the country's first in eleven years. Last week the government announced another batch of concessions.

In Brazil and Argentina, potential oil exporters that are now importers, emotional nationalism hinders the search for oil by barring foreign capital from participation. Last week the government oil monopolies in both countries made news, but it was news of hopes and plans, not of discoveries and output. Argentina's President Pedro Aramburu told a gathering of representatives from oil-producing provinces that the national oil agency, YPF, had been put on a new autonomous status so that it could get on with its work. ''The Argentine future in petroleum is extraordinary." said Aramburu, predicting self-sufficiency in oil by 1959. Foreign oilmen ventured that YPF, now producing less than half of the oil Argentina consumes, could not meet the goal.

In Brazil the head of the government monopoly. Petrobras, told a Chamber of Deputies committee about a new $435 million four-year plan for sinking 1,454 new wells. That sounded promising, but so far Petrobras is actually getting only 3% of Brazil's yearly oil consumption out of the ground.

In Central America, foreign oil capital is welcome, and a widespread oil hunt is under way. Union Oil Co. of California is about ready to start test drilling in Western Panama. Nicaragua has let concessions along its coasts. In Honduras, Texas oilmen are sinking test wells near the Nicaraguan border. Signal Oil & Gas Co. recently obtained a 670,000-acre concession in Guatemala, and a score of other U.S. firms have put in applications. The search for more oil is also going on elsewhere. Gulf Oil Corp. is planning to spend more than $1,000,000 this year on exploration in Bolivia: four U.S. oil companies are sponsoring a two-year geological mapping job in Peru.

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