MercoPress. South Atlantic News Agency

Uruguayan Offshore Field May Hold 3 Trillion Cubic Feet of Gas

Uruguay may have found an offshore natural gas field holding as much as 3 trillion cubic feet of resources during studies of exploration areas it plans to auction in July 2009, the country's state oil company said.

The potential discovery near the mouth of the Rio de la Plata follows seismic tests by the government's Administracion Nacional de Combustibles Alcohol e Portland, or Ancap, Hector de Santa Ana, its exploration and production manager, said in an interview. If confirmed, the find could supply Brazil for close on four years, or meet almost all of the U.S.'s winter gas needs. Uruguay wants to open gas fields after falling output led neighboring Argentina to cut exports. The site of the studies, the Punta del Este Basin, resembles offshore areas in Brazil and is potentially large enough to transform Uruguay from an importer facing shortages into an exporter, Santa Ana said. ''The studies are still preliminary and are not based on drilling, but they are very encouraging and should help attract interest for an exploration rights auction next year,'' he said in a telephone interview from Ancap's headquarters in Montevideo yesterday. ''The evidence from the seismic studies suggest large amounts of gas and associated oil.'' Madrid-based Repsol YPF SA and ''other major oil companies,'' have expressed interest in the data Ancap has collected on the Punta del Este basin, Santa Ana said. Petroleo Brasileiro SA, Brazil's state-controlled oil company, has also signed cooperation agreements with Ancap to study offshore oil and gas development in the country and help train Ancap employees, Santa Ana said. President VazquezUruguay's President Tabare Vazquez announced the likelihood of gas yesterday in a note on his Web site and said that the field was located about 150 kilometers (93 miles) off the country's Atlantic coast near the city of Punta del Este. The seismic studies suggest that there is at least one field with 1 trillion to 3 trillion cubic feet (28 billion to 85 billion cubic meters) of gas and that it is located about 5,000 meters (16,400 feet) below the sea bed, Santa Ana said. The fields are in about 750 meters of water on Uruguay's continental shelf. On Dec. 1 the government will unveil details of its first round of oil rights auctions scheduled for July 2009, he said. The government will auction rights to develop oil under shared production agreements with Ancap, which will receive oil and gas revenues on behalf of Uruguay from the projects. The 10 to 14 blocks on offer will cover more than 90,000 square kilometers (35,000 square miles) of ocean. Most of the blocks will be about 8,000 square kilometers, the rest about half that size, with the smaller blocks being the most promising, Santa Ana said. Uruguay, with a population of 3.5 million in 2007, consumed about 3.6 billion cubic feet (103 million cubic meters) of natural gas that year, according to the CIA Factbook. At that rate of consumption, the estimated amount of gas discovered in the Punta del Este basin would last the country for as long as 826 years. (Bloomberg)