According to the Oil and Gas Journal (OGJ), Chile had 150 million barrels of proven crude oil reserves in January 2006. As a result, the country’s oil production is limited, reaching 15,100 barrels per day (bbl/d) during the first eight months of 2006. In contrast, Chile consumed an estimated 238,000 bbl/d of oil during that period. The country’s main source of oil imports is Argentina, followed by Brazil, Angola, and Nigeria.

State-owned Empresa Nacional del Petroleo (ENAP) controls Chile’s oil sector. The company is the sole producer and refiner in the country. In 1990, ENAP formed an international subsidiary, Sipetrol, to seek foreign production that could offset declining domestic fields. Sipetrol has pursued investments in places such as Argentina, Colombia, Ecuador, and Egypt. The Comision Nacional de Energia (CNE) has principle regulatory oversight of the oil sector.

Chile’s Magallanes basin is the sole oil-producing region in the country. ENAP has developed 23 fields in the basin, the largest being the Costa Auera. Overall, oil production in Chile is in decline, as existing wells have matured and exploration efforts elsewhere have proven unsuccessful.

Sonacol operates Chile’s domestic oil transport network. The company operates 290 miles of crude oil and product pipelines, which link Chile’s oil fields to its refineries and population centers. Sonacol also operates a fleet of oil tankers. Chile has two crude oil import pipelines. The 270-mile, 115,000-bbl/d Trasandino, linking Chile with Argentina, and the Arica-Sica, linking Chile with Bolivia.

According to OGJ, Chile has 226,800 bbl/d of crude oil refining capacity. The country has three facilities, all operated by ENAP. The largest is the 113,400-bbl/d BioBio refinery, located north of Santiago.

ENAP has been investing in expanding the capacity of its refineries. In June 2004, it signed a deal with partners Tecnicas Reunidas (Spain) and Germany's Ferrostaal Group to build a $110 million mild hydrocracker at its BioBio refinery to produce low-sulfur diesel fuel; ENAP announced in November 2005 that it would add facilities at the BioBio plant to produce low-sulfur gasoline as well. In June 2005, ENAP announced that it would build a $430 million delayed coker plant at its Aconcagua refinery, with planned start-up in 2008.