Uruguay Round II: BP, BG, Total and Tullow Oil awarded offshore blocks

ANCAP received 19 offers for offshore oil exploration and production in 8 of the 15 offered blocks, by 9 of the 11 oil companies qualified for the bidding process. There was competition between three or more companies in 5 of the blocks offered. More than 50% of the area from the bidding process will develop exploration works by the four new companies (the British companies BP and BG, the French company Total and the Irish company Tullow Oil) that adds to the work already being done by Petrobras, YPF, and GALP in the Uruguayan offshore.
Blocks from the three Uruguayan offshore basins were awarded: the basins named Oriental del Plata, Punta del Este and Pelotas, this last who received particular interest from the oil companies.
After the assessment of the winning bids and the approval of the Uruguayan government ANCAP will sign the contracts with the winning companies with a deadline of September 2012.
In the offshore basins will be a relevant increasing in quantity and quality of the geological knowledge, as the work plans means as a whole one exploratory well in ultra-deep waters, 33.240 km2 of 3D seismic data, 13.080 km2 de 3D electromagnetic data, 130 samples of sea bed and 3.000 km of 2D seismic data for the first three years of exploration work.
The ANCAP president Raul Sendic highlighted that “the outcomes of the Round imply relevant investments by the oil companies, and therefore there will be significant advance in knowledge and technology, as well as the development of a new services sector”.
The Industry, Mining and Energy Minister Roberto Kreimerman underlined that “there are a national energy policy that promotes the development of local resources, and ANCAP is a leader in that process. This successful Round also demonstrates that the Uruguayan State has capacities and that the country is globally recognized by its image of seriousness and quality”.
The integration of this new 4 top level oil companies to Petrobras, YPF and GALP means the definitive establishment of Uruguay in the world oil map.
The winning companies will assume all the risks and costs generated by the oil operations during the phases of exploration and production.
The contract is classified as shared production agreement, and under this format the companies are benefited with part of the available production according to the percentages established by the contract. The term of the contract shall be 30 years, and ANCAP may extend the term up to a maximum of 10 years.
The exploratory period comprises a basic sub-period of 3 years, where the companies will execute the compromised exploratory program. There are two voluntary sub periods that involves the production of one exploratory well each, and the last request to return to Uruguay at least the 30% of the area.
ANCAP will have the option for buying totally or partially oil production of the companies if it is needed for the national oil consumption of Uruguay.
ANCAP may be associated for the exploitation of each productive block by a percentage offered by each winning company.
For more information, please contact Santiago Ferro: sferro@ancap.com.uy
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