MercoPress. South Atlantic News Agency

Magallanes extends oil licences to five global companies

Five international corporations have won bids for hydrocarbons exploration and production in nine out of ten blocks in the extreme south of Chile, --Magallanes Region--, was announced on Thursday by the country's Deputy Mining Minister Diego Vio in Punta Arenas.

The corporations or consortiums are Total S.A. from France; Apache Corporation, Canada/US; United States Pan-American Energy LLC; Greymouth Petroleum Holding Limited from New Zealand and IPR-Manas a joint US/Switzerland. NZ Greymouth Petroleum Holding was the company most involved in the overall operation. Under contract conditions the winning companies must in the course of the next seven years invest at least 267 million US dollars in exploration This bidding process will have a great impact "in jobs, supply companies, incorporation of new technologies and most important ensure Chile's energy diversification and autonomy", said Eugenia Mancilla, Magallanes mayor, during the ceremony. "Magallanes was an energy power and must continue to be one", added Mancilla recalling that the industry since the first discovery in Chile of oil and gas has been centered in Magallanes and Tierra del Fuego. The seven year period, concentrated in exploration and exploratory drilling in divided in three segments: during the first three years seismic surveying and eventually drilling must be accomplished by the winning companies to the tune of al least 102 million US dollars. This will be followed by a two year period, demanding 92 million US dollars and finally 72 million US dollars in the last leg. From then on operators will have a maximum of six months to begin committed exploratory activities. These contracts have a span of 35 years, with seven for exploratory activities and actual production has a cap of 25 years. Six of the nine blocks were awarded 100% for exploration and production to private companies. They are Tranquilo, which went to IPR-Manas, 33.2 million US dollars; Russfin, to Apache, 23.4 million; Porvenir, Greymouth, 11.3 million; Brotula, Greymouth, 48.6 million; Isla Magdalena, Greymouth, 13.6 million and Otway to French Total, 44.5 million. In the other three blocks winners must associate with Chile's government oil corporation ENAP. The areas awarded were, Coirón to Pan American Energy, with a 100% partnership of Enap and the investment promised was 34 million US dollars; Caupolican, Greymouth, 33.9 million and 28% to Enap, and Lenga, to Apache, for 24.9 million and a 100% partnership of Enap. Greymouth which is totally kiwi and only operates in NZ, for this first overseas incursion has a Magallanes partner. The company will be investing 107 of the 267 million US dollars committed by the bidders. Greymouth daily oil or equivalent production is of 2.723 bpd. Apache Corporation: Founded in the US in 1954 it has oil and gas operations in North America, Egypt, Australia, UK and Argentina. Assets total 24 billion US dollars and production is in the range of 88.500 bpd. Total is France's main oil company started in 1924 and summing all its subsidiaries and affiliates is the world's fourth largest integrated oil and gas corporation which quotes in stock exchanges. Assets are in the range of 174 billion US dollars with operations in UK, Indonesia, Angola, Congo, Cameroon, Venezuela, Australia and Brazil among others. Daily production: 2.758.300 bpd. IPR-Manas was created in 2004 and HQ is in Baar, Switzerland. It has operations in Kirgiztan, Mongolia and Albania and lately has targeted the Americas. Average daily production is 6.500 bpd. Pan American Energy LLC is made up of BP (60%) and Bridas Corporation (40%). Assets total 2.2 billion US dollars with main production in Argentina and Bolivia. Daily extraction is in the range of 231.000 bpd.