MercoPress. South Atlantic News Agency

Foreign companies after Chile's untapped gas resources

At the end of June Chile's government owned oil corporation ENAP will release the natural gas final exploration results from the Lake Mercedes area of Tierra del Fuego, revealed to the Chilean press sources from the company.

El Mercurio from Santiago also revealed that some of the world's top oil companies have expressed an interest in exploring for natural gas in Chile among which are U.S. Chevron Corp; Evergreen Resources; Arco Petroleos; Petresearch International; Hunt Oil Company; Repsol-YPF; British Gas; Marathon Oil Corp, and Brazil's Petrobras.

Although an announcement regarding Lake Mercedes, the dimensions of the natural gas "bubble" discovered and whether it can be commercially exploitable, was expected for this week apparently ENAP preferred to double check all the available information.

However this is not the only block where ENAP has exploration plans, two other areas in Magallanes Region have been signalled as holding potential natural gas reserves.

"We're always interested in exploring for natural gas, particularly in Chile, that is the nature of any oil corporation", said an undisclosed ENAP source.

ENAP president Enrique Davila preferred not to advance an opinion about the Tierra del Fuego findings but did emphasize that at the current level of prices world wide, "many international corporations are interested in looking for hydrocarbons in Chile".

Petrobras is closely linked to oil and gas exploration in the South Atlantic and British Gas is building the giant liquid natural gas transformation plant in north Chile which should help open the country to world provision cutting its extremely high Argentine gas dependency.

According to Chilean legislation all hydrocarbons deposits belong to the government which through ENAP can extend exploration concessions or special risk contracts, with the Chilean company becoming a partner of the venture.

Apparently requests from some important international companies have been addressed to Chile's Mining and Energy ministry expressing an interest particularly in those areas "where in the past natural gas existed but since the objective was oil, they were left untapped", said the ENAP sources.

An encouraging fact is that the US company Geopark currently operating in Magallanes Region Fell block, has managed to double production from old, discarded gas and oil wells.

However the interest of those companies is not limited to south Chile but also extends to the north of the country and in the area or Concepción.

"Risk contracts attract foreign companies because they include benefits and franchises guaranteed by the Chilean government such as freedom to export oil and gas and to manage financial resources, plus the country's long established reputation of respecting contracts and long term rules of the game. There are no fiscal or contract surprises in Chile", highlighted the ENAP sources.