Scottsdale-based Delta International Oil and Gas announced last week that it is ending its Latin American operation. The company operates entirely in Argentina and has focused on finding and acquiring potential oil wells for future production.

University of Arizona Research Scientist Amanda Hughes said oil exploration is not a very big industry Arizona, but what is present covers broad geographies.

“Even if you discover it in one place, it isn’t necessarily the local market forces that would decide whether or not it would be worth producing,” Hughes said.

Hughes said oil and gas are sold broadly, and prices are decided globally. Companies explore across borders looking for places where the geology looks similar to where drilling is already taking place, including Arizona, where she said there is a vast diversity of geologic settings.

“In the Northeastern part of the state is the paradox basin, and that’s where the existing production in Arizona is, and in the southeastern corner of the state, there are rift basins," Hughes said.

She says exploration is an economic calculation, about whether or not there is a likelihood that the location will be able to produce oil and gas now or years from now.

In terms of international development, Hughes says there is significantly more risk because the long-term timeline from identification to actual drilling exposes U.S. companies to both economic and political risk of the location country.   

EDITOR'S NOTE: This story has been updated to correct Amanda Hughes' quote regarding a paradox basin.