Oil rout ripples through Latin America as projects slow

RIO DE JANEIRO, Nov 29 (Bloomberg): A worker fills a customer's car with gasoline at a Petroleo Brasileiro SA (Petrobras) station in Rio de Janeiro, Brazil, Petrobras is investing $221 billion between 2014 and 2018 to accelerate production at the largest oil discoveries in the Western Hemisphere in almost four decades.

From Venezuela to Argentina, oil's steepest plunge in three years is reverberating through a region that accounts for the largest crude reserves outside of the Middle East.

Venezuelan oil bond yields jumped, American depositary receipts of Petroleo Brasileiro SA (PETR4), YPF SA and Ecopetrol SA (ECOPETL) plunged and the Colombian peso fell the most in five years after the 12-nation OPEC opted against measures to prop up crude prices Nov. 27. Brent is down 13 per cent this week.

Crude's accelerating rout, as the US shale boom coincides with slowing demand, is putting pressure on producers to cut spending. Latin America's largest independent producer Pacific Rubiales Energy Corp. (PRE) said yesterday that it's battening down for at least a year of lower prices. Some project development and drilling in the region is poised to decelerate, Patricia Mohr, a commodity specialist at Scotiabank Group in Toronto, said.