MercoPress. South Atlantic News Agency

Oil industry targets South Atlantic.

Repsol-YPF Argentina's main hydrocarbons producer and other foreign companies will be investing over 300 million US dollars in oil and gas exploration in the South Atlantic and offshore Buenos Aires province during 2005.

Strong international oil prices and the liberation of the natural gas price in Argentina are seen as the main driving force behind the new push following one of the country's worst energy crisis that forced serious restrictions in overseas natural gas shipments particularly to Chile.

According to the Argentine press, French owned Total Austral, Wintershall from Germany and Anglo-argentine Pan American Energy will be investing in the coming nine months 114 million US dollars in the austral basin, Southwest Atlantic.

The group already has invested 256 million US dollars in the area and expects a production between 4 and 7 million cubic meters of natural gas from seven wells which will be drilled beginning next September.

Respsol-YPF has also plans to invest 70 million US dollars in the austral basin taking advantage of wells drilled several years ago and which remain locked.

Further south, offshore Tierra del Fuego, several of these companies will continue exploring the area which is rich in natural gas.

Repsol-YPF associated with the American company Pioneer has plans to explore for hydrocarbons offshore Buenos Aires province, once the Argentine government gives the official authorization. Petrobras is also interested in the same basin.

"This is the less developed of Argentine basins but some exploratory drilling has signaled the possible presence of hydrocarbons", said Walter Schmale president of the Argentine Oil and Gas Institute.

But Mr. Schmale also pointed out that to make findings "drilling is essential, but this means favorable geological, price, fiscal and contract certainty conditions", since the oil industry works with a "future horizon" and an offshore project "demands between 7 and 10 years before reaching production".