MercoPress. South Atlantic News Agency

Uruguay hopes to begin offshore oil exploration next year

Uruguay will open its continental platform for oil exploration in 2009 following on encouraging seismic surveys of the area, said this week incoming Minister of Industry and Energy Daniel Martinez.

In an interview with a Montevideo newspaper Martinez said there are "several conditions that make the possibility of oil and or gas potentially feasible" in the easterly continental platform. The area is 140 kilometers east of Montevideo. "All the data and information on the surveyed area will be presented next November during a "Uruguay round" which will be exhibited in oil fairs and forums of several countries with the purpose of attracting the interest of the oil corporations", added Martinez, who until a few weeks ago was the head of Uruguay's government owned oil and fuel corporation Ancap. "We would like the corporations to come and purchase the data", said Martinez. Corporation will then have six months to consider the surveys and reports, and in the meantime Uruguay will be preparing a licensing bid round for those blocks with the highest potential. Under the terms to be drafted by the Uruguayan government, 50 to 60% of oil or gas extracted will belong to the country. But Martinez also cautioned that even if all works out as planned and oil is effectively discovered, "it will take at least seven years before Uruguay harvests the first barrel of oil". Uruguay which has hydro, thermal and is experiencing with wind energy, is totally dependent on imported oil and fuel. The country purchases in the range of 14 to 15 million barrels annually, at a cost of 1.6 to 1.7 billion US dollars, equivalent in 2007 to 30% of the country's total imports. Back in 1976 Chevron drilled several wells in the River Plate under contract from the Uruguayan government and found traces of oil and mainly natural gas, but not at commercial volumes, based on the technology of the time. Disputes with the military government of the time made Chevron abandon the contract and take the exploration rig to the Mediterranean coast of Spain. Recent huge discoveries by Petrobras along Brazil's southern coast indicate the possibility that the geological formation could extend parallel to the continent offshore Uruguay and Argentina.