ANCAP Reveals Ronda Uruguay II Winners

Uruguay’s state-owned petroleum company, ANCAP, received 19 offers for offshore oil exploration and production on 8 of the 15 offered blocks. Nine oil companies submitted bids from the eleven oil companies initially qualified for the bidding process.

The eight blocks cover more than 50% of the total offered area and they will be placed for exploration works by the four new players in the Uruguayan offshore: the British companies BP and BG, the French company Total and the Irish company Tullow Oil.

After the assessment of the proposals and the approval by the Uruguayan government ANCAP will sign the contracts with the winning companies on September 2012 as a deadline.

There will be a relevant increasing in quantity and quality of the geological knowledge of the offshore basins, as the work plans represent as a whole: one exploratory well at 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 advances in knowledge and technology, as well as the development of a new services sector”.

The Industry, Mining and Energy Minister Roberto Kreimerman underlined that “Uruguay has 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 Uruguay has technical and human expertise and that the world is recognizing the good image of our country”.

The integration of this new 4 top level oil companies to Petrobras, YPF and GALP means the definitive insertion 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.

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Source: ANCAP, April 2, 2012