MercoPress. South Atlantic News Agency

Uruguay down plays announcement of gas and oil discovery

Uruguayan authorities downplayed the announcement earlier this week of the discovery of significant natural gas reserves and “possibly” oil in the River Plate close to the Brazilian border.

Geologist Hector De Santa Ana and Exploration Manager of Uruguay's government owned oil and gas corporation, ANCAP said that if gas is eventually found it would not necessarily be profitable in the region since in neighboring countries such as Argentina, prices are highly fluctuating and do not guarantee stability. The reservoir which was detected through seismic surveying is 6.000 meters deep, 750 to the sea bottom plus another 5.500 meters of rock. "There is natural gas at 600 meters but it does not have the necessary commercial volumes", indicated De Santa Ana. "The one which really is interesting is further down. But if we finally manage to develop the reservoir we could be talking in the range of 12 to 14 million cubic meters". The Uruguayan geologist said that drilling an exploratory well has a cost of between 130 and 150 million US dollars, and "this is not for extraction but for confirming the data available and that the volume available is commercially feasible". "What we must really determine is if we have a field or effectively a deposit", said professor César Goso Deputy head of the Geology Department from Uruguay's University. "The difference is whether it is economically viable or not because of the volume of gas accumulated. If not we must make a very fine assessment of cost-benefit to determine if we continue with exploratory drilling", underlined Goso. However, he added that the Uruguayan government's announcement "could be expected" because there are similar basins in Brazil, Africa and Argentina which are being exploited. Apparently the data collected by Ancap indicated the presence of at least two large gas "entrapments", one of them offshore Punta del Este and the second close to the maritime border with Brazil, "both at depths ranging 600 meters". Uruguay has been looking for oil and gas in its territory since 1950, but so far with no success. The first wells drilled in the north of the country did help open the spa industry with thermal water sources at over a thousand meters deep. "This is part of the giant Guarani aquifer which underlies the north of Uruguay, south of Brazil, north of Argentina and part of Paraguay", revealed Goso. In the seventies new efforts were undertaken on land and offshore with US oil corporation Chevron which rendered traces but with no commercial results.