MercoPress. South Atlantic News Agency

YPF/Petrobras/GALP to explore for oil in Uruguayan waters

YPF will operate a deep water block and Petrobras a shallow water block.

A consortium made up of YPF/Repsol, Petrobras Uruguay and GALP from Portugal has won a bid to explore for oil in two offshore blocks near the coast of Uruguay, according to industry reports late Wednesday.

YPF/Repsol will have a 40% stake in the exploration, sharing the other 40% with Petrobras Uruguay, a unit of the Brazilian oil giant Petrobras, and Portugal GALP, which has a 20% share.

YPF/Repsol will operate the deep water “exploratory block 3” while Petrobras will operate the shallow water “exploratory block 4,” both located along the coast of Punta del Este.

YPF/Repsol is a unit of the Spanish oil firm Repsol YPF SA. However an YPF official said the decision to participate in this project was made locally by local management. None of the companies involved gave details of how much they plan to invest in the project.

“These two awards represent the return of YPF as an international operator and they form part of a strategic exploration association in the South Atlantic between Argentina and Petrobras,” said YPF/Repsol.

The news comes several weeks after a consortium led by Repsol YPF announced plans to explore for oil in international waters between Argentina and the Falkland Islands. Exploration in that project is slated to take place some 289 kilometres off the Argentine coast and begin in the first quarter of 2010.

Petrobras and BP PLC (BP)-controlled Pan American Energy are also part of that consortium, which will invest 98 million in the project.

In May, Rockhopper Exploration PLC (RKH.LN) announced that it was making progress on an oil and gas exploration project in the North Falkland Basin, located to the northeast of Cuenca Malvinas.

In recent statements Uruguay’s Industry, Energy and Mining minister Daniel Martínez said the first offshore wells in Uruguay “could start being drilled in 2011”. Uruguay's government last year announced it had identified more than a dozen prospective offshore natural gas areas.

Government owned oil company Ancap pre-qualified six firms to compete in the round for 11 offshore blocks. The companies included Australia's BHP Billiton; Portugal's Galp; Venezuela's PDVSA; Brazil's Petrobras and Argentine firms Pluspetrol and YPF/Repsol.

Ancap in December launched the round for the eleven offshore blocks that range from 4.000 to 8.000 square kilometres, at depths of 200 to 2.500 metres.