I'm willing to wager that you think of Saudi Arabia or Russia when you contemplate the world's most active oil-producing areas. Funny, though, how things change. The real oily activity these days seems to be coming out of South America, not the Middle East or Siberia.

You know about Venezuela's Castro wannabe President Hugo Chavez's nationalization of his oil reserves in the lush Orinoco River basin. In the process, he sent half a dozen western oil companies packing as operators. The loss of the expertise from, for instance, ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX), and ConocoPhillips (NYSE:COP) was supposed to set the nation's exploration and production successes way back.

But my goodness, the news has just come from the country -- it's state-run news agency, mind you -- that in just the past three months, Venezuela's proven oil reserves have increased by 9.4%. Chavez's minions are now claiming 142.3 billion barrels as their reserves number, up from the 130 billion barrel figure they've been using since May.

That news follows yet another find by a Petrobras-led (NYSE:PBR) group in Brazil's Santos Basin, where the deepwater Tupi field, with its estimated eight million barrels of recoverable light crude, has been joined by the Iara field, which may contain another four billion barrels. (You may have noted that Brazil, which clearly is making more discoveries than a freshman at a mixer, recently rejected an invitation to join OPEC.)

And it's not just Hugo's folks and Petrobras who are having all the fun south of the border. Not long ago I told my Foolish friends about a very small company, Gran Tierra Energy (NYSE:GTE), which, while based in Calgary, is busy as a bee in Columbia, Argentina, and Peru.

But for my money, Petrobras continues to be the real story in Latin America. Despite discovering Tupi and Iara -- and an ongoing drilling program that's keeping Transocean (NYSE:RIG) and Diamond Offshore (NYSE:DO) busy -- the company's shares have slid nearly 45% just since mid-May. That probably relates to the commodities price declines, along with investors figuring out that the big discoveries will cost hundreds of billions -- or perhaps even trillions -- for development.

But with its shares now in the low $40s, versus the middle $70s in the spring, this is a company that warrants attention from Fools with a taste for oil.

For related Foolishness:

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Fool contributor David Lee Smith loves spicy food, but can't claim ownership in any of the companies mentioned. He does welcome your questions or comments. The Fool has a disclosure policy that's recognized both north and south of the equator.