Chile's state oil firm ENAP is seeking joint ventures with foreign companies to explore for crude and gas at five blocks in the country's extreme south region and has invited over twenty corporations to participate, announced the company.
The Isla Norte, Campanario, Flamenco, San Sebastián and Marazzi-Lago Mercedes blocks represent 12% and 1% of ENAP’s proven reserves oil and gas respectively. The area has an estimated 400 drilled wells but only 22 are in production.
Under the Chilean joint venture system special contracts ENAP retains the well and the associate company takes between 30% and 50% of the new oil/gas production.
ENAP Magallanes Exploration and Production manager Roberto McLeod said that by the end of April 2011 the associate-selection process should be concluded.
“The association with oil corporations will enable us to begin exploring those areas through the acquisition of 3D seismic surveying and drilling new exploratory wells which if successful could help increase reserves and extraction in those areas” said McLeod.
Four basic requisites are demanded from the potential joint-venture associates, proven technical capacity; strong financial backing; reputations and knowledge of basins similar to that of Magallanes region.
ENAP revealed it has found oil at the Marazzi-Lago Mercedes block, but the remoteness and technical challenges associated with the region has prevented the extraction of oil there in Tierra del Fuego.
According to McLeod ENAP-Magallanes expects that each associate company commits an average investment of 15 million US dollars in each block during the first exploratory phase which basically means seismic surveying and drilling of exploratory wells.
In 2008 ENAP which is Chile's top oil refiner and distributor, signed four joint ventures with international firms in Chile's Magallanes region. ENAP in considered a marginal producer of oil with some operations in Argentina and Egypt.