German player Wintershall has registered to bid in Argentina’s first ever offshore licensing round, which will take place next month.

Wintershall, which is due to complete a merger with fellow German giant Dea soon, has been active in the Latin American market for years, producing from the onshore Vaca Muerta formation.

With projects in southern Argentina, off the coast of Tierra del Fuego, as well as in the central Argentinean provinces of Neuquen and Mendoza, it is the fourth-largest gas producer in Argentina.

The company currently holds working interests in 15 oil and gas fields, and produces about 26 million barrels of oil equivalent per year.

Wintershall is now eyeing offshore exploration, a move aimed at diversifying the company’s portfolio, but also its local activity in the country as it has been less than satisfied with policy changes covering shale gas.

“We will continue our activity in Argentina. We will take part in the upcoming bidding round for offshore acreage in Argentina, we have already registered for it,” Thilo Wieland, executive board member with Wintershall responsible for South America said.

However, further investments in shale are on hold, in part because Wintershall is due to close by the middle of the year its merger with Dea, which will then allow it to boost investments in the joint portfolio.

But slowing down Winteshall is also the political environment in Argentina, as the country is due to hold general elections in October.

According to Wieland, while the previous government, led by President Mauricio Macri, had been “business focused”, some of the recent changes in energy policy have less business friendly.

“In the last three years, we have invested around $600 million there, and we want to continue this trend. But we are not sure if our investments will be in oil or gas, especially after Argentina adopted recently ‘Resolution 54’, which does not really favour gas production,” Wieland said.

“During the (previous government of president Mauricio Macri), we were very satisfied with the signals send out. It was a very market-orientated approach. In the recent past, we have been seeing some signals that the region is changing direct, like with the export taxes, which are not helpful for free markets. We are waiting to see what happens in the upcoming elections,” he said.

“This could stir our work towards oil in the future,” Wieland added.

Argentina’s offshore round was formally launched at the end of last year and offers 38 blocks for exploration in the Austral Marine, West Malvinas and Argentina basins.

Round 1 will include 18 deep-water blocks in the Malvinas West basin, with water depths ranging from 100 to 700 metres, while, farther north, in the Argentina basin, there will be seven blocks in water depths ranging between 200 and 1300 metres and seven more with water depths between 1200 and 4000 metres.

Another six blocks will be offered in shallow waters in the southerly Austral Marine basin.

Bids were presented on 14 March. Blocks will be awarded on 15 April.

Meanwhile, Wintershall’s focus in South America has widened to include Brazil. The company won seven offshore block, four of which it operates, in Brazil’s latest round last year.

Re-entering the country, Wintershall is currently acquiring seismic data aiming to better understand the basins before kicking off exploration.

The first seismic results are expected mid-2020.

Wieland, clarified, however: “Regarding the future, we decided on development activity in Brazil because it offers large potential for us, with large reserves.

“But this is not a question of choosing one (Argentina) over the other (Brazil),” he said.

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Wintershall aims to explore off Argentina