Sole remaining block off Uruguay goes to Isle of Man-based oil & gas firm
Challenger Energy Group (CEG), the Isle of Man-headquartered oil and gas company focused on the Caribbean and Americas, has been awarded the last remaining available shallow water exploration block located off Uruguay. Other offshore exploration licences are held by energy majors, including Shell, Apache and YPF, the Argentinian national oil company.
After Challenger Energy submitted a bid for the AREA OFF-3 block offshore Uruguay as part of the Open Uruguay Round, the first instance of 2023, the Administración Nacional de Combustibles Alcohol y Pórtland (ANCAP), the Uruguayan national regulatory agency, published on its website at the start of June 2023 that there were no further available offshore blocks in Uruguay.
With no other offers for AREA OFF-3 referenced in ANCAP’s communication, the Isle of Man-based firm was advised that the formal award of the block was expected to take three to four weeks, expanding Challenger’s licence holding in Uruguay to two blocks, in the offshore Punta del Este and Pelotas sedimentary basins – AREA OFF-1 and AREA OFF-3 – positing the firm’s acreage on either side of Shell’s AREA OFF-2 block.
In an update on Monday, 3 July 2023, Challenger announced the formal approval of the award of the AREA OFF-3 licence by ANCAP. As a result, the company expects the process for all remaining approvals, finalisation and formal signing of the licence documentation to take approximately three to four months, at which point the initial four-year exploration period of the licence will start.
According to Challenger, the AREA OFF-3 licence increases its total Uruguay acreage holdings to about 28,000 km2, turning the firm into the second-largest offshore acreage holder in Uruguay behind Shell. This block has a current estimated resource potential of up to around 500 million barrels of oil equivalent (mmboe) and up to approximately 9 trillion cubic feet of gas (TCF), from multiple exploration plays.
Covering a total area of 13,252 km2, the AREA OFF-3 licence is situated in water depths from 20 to 1,000 metres, approximately 100 kilometres off the Uruguayan coast while mapped prospects of interest are in relatively modest water depths of about 250 metres. This block was previously held by BP, but was relinquished in 2016.
While there are no prior wells, considerable seismic activity was carried out on the AREA OFF-3 block, comprising approximately 4,000 km of legacy 2D and around 7,000 km 3D, as part of the 2012 proprietary acquisition by BP and seismic vendor, PGS. Two material-sized prospects have previously been identified and mapped on the block.
The first prospect, Amalia, comes with a gross resource estimate: P10/50/90 (ANCAP) of 2,189, 980, and 392, respectively. This prospect straddles the boundary with Shell’s AREA OFF-2, with an estimated 25 per cent of the prospect contained within AREA OFF-3.
The second prospect, Morpheus entails a gross resource estimate: P10/50/90 (ANCAP) of 8.96, 2.69, and 0.84, respectively. This prospect is entirely contained with AREA OFF-3.