MercoPress. South Atlantic News Agency

Uruguay’s second oil licensing round triggers greater expressions of interest

Petrobras, YPF and GALP were involves in the first round of 2009

Uruguay's government oil corporation Ancap has received expressions of interest from at least 10 foreign companies for 15 offshore oil and gas exploration blocks it is offering in its second licensing round, a company official said in Geneva.

Ancap geologist Bruno Conti Paciello, speaking on the sidelines of an energy conference in Geneva, said companies that have expressed interest in the blocks include Gazprom, BP, Total, BG, Tullow and US independent Noble. Ancap also had contact with Shell regarding the auction, he said, without giving details.

The blocks were offered on September 8 and Ancap will announce the qualified companies on March 15 of next year. Submission of proposals will take place from March 22-29, after which the proposals will be opened, he said.

Uruguay, which produces no oil of its own and relies on imports of both crude oil and natural gas, awarded two offshore oil and gas exploration blocks in a 2009 bidding round, when interest in the country's first ever auction was lackluster due to the global economic downturn.

In the first round, held in 2009, a consortium of YPF, Petrobras and GALP won licenses for blocks 3 and 4 located 60 km off the south-eastern coast in the so-called Punta del Este Basin. The companies have said they plan to invest an initial 80 million dollars in exploration.

Paciello said that drilling the first wells was likely to begin in 2014 if the companies decide to proceed with an exploration program.

Uruguay is seeking to develop its own oil and natural gas for the first time to improve energy security and reduce a heavy reliance on imported energy and domestic hydropower. The country consumes around 250,000 cubic meters/day of gas, which it receives by pipeline from Argentina, Paciello said. It also imports 50,000 b/d of crude oil, which is processed at Ancap's sole refinery.

This is the first offshore exploration in Uruguay since Chevron drilled two wells in 1976 that were never put into production because of low crude prices at the time.

The second round will include access to 6,300 linear km of 2-D seismic studies secured this year. ANCAP financed the studies to provide richer data for the round.