Argentina plans to launch its first offshore licensing round in almost three decades this year, as it seeks to widen exploration for longer-term production growth, Energy Minister Juan Jose Aranguren said on Thursday.Round One will be launched in June or July for 240,000 sq km in three zones of the continental shelf, Aranguren said on the sidelines of The Economist's Argentina Summit in Buenos Aires.
The acreage includes 5,000 sq km in the Austral Basin, the country's southernmost basin and the only one with offshore production. The rest is 80,000 sq km in the Western Malvinas Basin and 170,000 sq km in the North Argentine Platform, he said.
The ministry is sounding out several companies that have demonstrated interest, helping in the preparation of the bidding documents and terms and conditions of the tender, Aranguren said. The plan is to receive the bids in November and award them in December, he added.
This will be the first of at least two rounds for offshore acreage, as the country seeks to expand exploration beyond the maturing conventional reserves and large unconventional plays like Vaca Muerta. The second round is to be held in 2019, the official said.
The exploration will be for 10 years due to the higher risks associated with offshore drilling, Aranguren said. Even so, he expressed optimism for potential finds.
Argentina's continental shelf is one of the few offshore regions in the world that is practically unexplored, he said.
Tierra del Fuego, the southernmost province, is the source of the only offshore production in Argentina, producing some 24 million cu m/d of gas, or about one-fifth of the 122 million cu m/d of national production, from the Austral Basin, according to Energy Ministry data. The biggest offshore producer is France's Total.
The government has said it expects offshore drilling will help bring long-term production growth to help offset declining output from maturing conventional reserves. The brunt of the growth, however, is to come from unconventional resources in shale plays like Vaca Muerta, one of the world's largest, as well as from onshore heavy crude resources.
This will be the first tender for offshore acreage since the early 1990s, and to prepare the government has awarded permits to two companies -- Norway's Spectrum and Australia's Searcher -- for seismic, gravimetric and magnetometer studies in the Austral Marina and Malvinas Marina basins off Tierra del Fuego.