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Uruguay signs offshore oil deals

Source : IANS
Last Updated: Sat, Oct 06, 2012 06:40 hrs

Montevideo, Oct 6 (IANS/EFE) The Uruguayan government Friday signed a series of offshore exploration and production deals with British oil firms BG Group, BP plc and Tullow Oil and France's Total.

The contracts were presented to the media in a ceremony presided over by Energy Minister Roberto Kreimerman and the CEO of state oil company Ancap, Raul Sendic, and attended by the heads of the respective foreign oil firms.

"This is a day to celebrate the progress of our energy policy in general and Ancap's policy in the search for the sovereign resources this country has," Kreimerman said, adding that the agreements are a milestone in the country's history.

The companies awarded 30-year concession contracts in April for the eight oil blocks - three each for BG and BP and one each for Tullow and Total - have committed to investing a total of roughly $1.56 billion.

The contracts, the terms of which are extendable for an additional 10 years, are part of the Uruguayan government's plan to diversify the national energy matrix and reduce its dependence on fuel imports, Kreimerman said.

Sendic said the signing of the contracts for the eight offshore blocks marked a "historic day" for this nation of 3 million inhabitants and hailed the strong interest in the auction.

"It's difficult in a risky basin (for investors) like the Uruguay II Platform for there to be such a high level of interest by companies," he said.

A score of companies submitted bids to explore for oil and natural gas in Uruguay's territorial waters.

If hydrocarbons are discovered, Uruguay could partner with the successful bidders to develop the areas by taking stakes in the blocks ranging from 22 percent to 35 percent.

The Uruguay Round II was launched in September 2011 after exploration carried out by Ancap revealed traces of hydrocarbons in the marine subsoil.

A total of 15 blocks were on offer in the auction covering a 101,000-sq-km area.

In an earlier bidding process, the Uruguayan government awarded two offshore exploration and production blocks to an international consortium made up of Argentina's YPF, Brazil's Petrobras and Portugal's Galp Energia.

Uruguay imports all of the oil it consumes, mainly from Venezuela - which supplies 40 percent of the total - Angola and Russia.

--IANS/EFE

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