MercoPress. South Atlantic News Agency

Interest in South Atlantic hydrocarbons

Venezuelan and Brazilian government owned oil companies are interested in exploring in the South Atlantic basins according to sources from the Argentine Federal Planning Ministry, reports La Nacion in its Monday's edition.

PDVSA, (Venezuelan Petroleum), expressed their interest to Federal Planning Minister Julio De Vido during his recent trip to Caracas to sign an agreement for the supply of liquid fuel for Argentine electricity generating plants.

However, Petrobras contacted by La Nacion, said for the moment it was an "intention" from the company's Development Department.

Apparently Nestor Kirchner administration faced with the acute natural gas shortage has plans or is planning the creation of a government managed company, in association with Venezuela and Brazil that would operate in those still unexplored basins offshore the provinces of Buenos Aires and Chubut, plus Malvinas, which are the only belonging to the federal government. According to Argentine law the continental subsoil belongs to the provinces.

But both Petrobras and the Argentine Federal Planning Minister downplayed the project arguing that "a government oil company seems too ambitious. We have ongoing contacts because these corporations are interested in investing in these basins, but it's a long term project and there's no starting date".

Petrobras sources went even further, "we're interested because we have the technology, but it will be a private undertaking. Yes any oil company must associate with whoever owns the subsoil, in this case the Argentine government, but the link will not advance further than that".

La Nacion sources indicate that any exploring enterprise in the South Atlantic will demand at least seven years, and if it effectively occurs, "it will mean the return to the risk investment operations, that is going back to the nineties".

"Actually given the uncertainty about the existence of hydrocarbons never explored before, most oil corporations prefer to drill close to producing wells, where they are more certain to strike oil".

La Nacion also points out that Repsol-YPF on several occasions and for several years has expressed an interest in offshore Buenos Aires province, but "the cost of taxes in those basins has shown to be too high and risky for success".