MercoPress. South Atlantic News Agency

“Uruguay oil round” scheduled for next November

Next November Uruguay will extend a formal invitation to all those oil companies interested in considering the hydrocarbons potential of the country, based on a battery of data collected during the last few years, according to top officials from the country's government owned petroleum and fuels monopoly Ancap.

Hector de Santa Ana, manager of the Exploration and Production Department said that Uruguay currently is gathering all the information possible on the hydrocarbons potential of the country, mainly offshore including 2D seismic surveying. "We're currently in the data collection and acquisition stage, mainly 2D seismic surveying. We're drafting a dossier for presentation to international oil corporations which describes prospective areas with possible entrapped structures which can anticipate the existence of hydrocarbons accumulations", said Santa Ana. The Ancap official indicated that so far the company has concentrated offshore in Uruguay's 200 miles zone because that's where the most promising data has been collected. Thirty years ago Chevron drilled several exploratory wells which offered traces of hydrocarbons but apparently at insufficient commercial volume. According to Santa Ana source rocks at the time were not detected but drilling was done in areas which structurally do not accumulate these kinds of rocks. Santa Ana said that some of the geophysics exploratory companies have associated with Ancap in the surveying, sharing costs, and in the future sharing the sale of such data to companies interested in exploring possible areas. However Santa Ana pointed out that even when Uruguay is in a list of countries with "exploratory expectations", if and when all the surveying concludes that there are reasonable chances of the existence of hydrocarbons, under the Uruguayan legal system, "Concessions are not extended, but rather service contracts, which mean companies involved do not keep the oil extracted. Companies involved therefore can't compute such oil as reserves but with a service contract, profitability is ensured, including the repayment of all investments and potential profits". The Uruguay Round timetable therefore is scheduled to begin next November and in July 2009 interested parties will be invited to tender for exploration in the different areas to be licensed, said Santa Ana