• Wednesday, 16 May, 2012

Uruguay unveils offshore bid round

Opening blocks: Uruguay lays out its leasing plans

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By News Wires

 08 September 2011 19:25 GMT

Uruguay detailed plans to auction 15 offshore exploration blocks on Thursday, part of the energy-poor country's efforts to reduce its dependence on imports of oil and natural gas, reports said.

The discovery of massive deep-water reserves off Brazil's Atlantic coast has encouraged neighboring Uruguay to look for energy resources along its own coastline, Reuters reported.

"This country, which has traditionally been a farming nation, is determined to find out (if it has oil)," President Jose Mujica said at the formal launch of the round.

"For a long time, we were totally unaware of the fact that we were a country with mineral resources. Who knows? We might have some helpful energy resources too," he added, referring to a newly discovered iron-ore deposit.

It is Uruguay's second round of bidding to explore offshore.

An earlier offshore bidding round launched in 2008 fell short of expectations as a global financial crisis worsened, deterring energy firms from risky and expensive offshore exploration.

This time, Uruguayan energy officials say they have more data to try to lure major global players into its waters.

"I'm very optimistic, I'd say we've got more than a 70% chance of finding hydrocarbons on our part of the continental shelf," Raul Sendic, the head of state energy company Ancap, told Reuters in an interview on Wednesday.

He said Ancap would provide potential bidders with data obtained in the last three years from in-house research and from third parties.

"The main difference today is that we're positioned differently on the world's energy map ... we've advanced with studies on the existence of hydrocarbons, we've covered another 6,000 kilometres with seismic and other studies," he said.

"We've got very similar basin structures to those found on the other side of the Atlantic Ocean, in Angola," he said. Angola is Africa's second-largest oil producer after Nigeria.

The 15 offshore blocks being offered for exploration cover about 8,000 square kilometres each and the government plans to award contracts to the winning bidders in mid-2012.

Sendic said that once exploration work begins, he expects the firms would be able to determine whether crude oil or natural gas deposits exist within four to five years.

Companies invited to attend Thursday's launch event included Royal Dutch Shell, France's Total, Portugal's Galp Energia, Repsol's Argentine unit YPF, Brazil's Petrobras and Russia's Gazprom , among others.

In November 2008, Uruguay was only able to auction off two of the 11 offshore blocks on offer. These two were awarded to a consortium formed by YPF, Petrobras and Galp.

Ancap also plans to drill in northern Uruguay before year's end to follow up an on initial discovery of oil and natural gas in that area, while foreign energy companies are exploring elsewhere in Uruguayan territory for the fossil fuels.

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