Uruguay's state energy company Ancap said on Friday it awarded contracts for eight offshore exploration blocks in an effort to reduce the country's dependence on imports of oil and natural gas. The discovery of massive deep-water reserves off Brazil's Atlantic coast has encouraged neighbouring Uruguay to look for energy resources along its own coastline.
The tender was won by BP and BG - awarded three blocks each - and Total and Fullow Oil - one block each. Ancap originally auctioned 15 blocks in the offshore platforms of Oriental del Plata, Punta del Este and Pelotas. "It will be a $1.56 billion investment ... ," Raul Sendic, the head of state energy company Ancap, told reporters at a press conference.
Contracts run for 30 years but could be extended by 10 years as long the presence of hydrocarbons is confirmed and firms abide by the agreed minimum exploration plan. It is Uruguay's second round of bidding to explore offshore. An earlier round launched in 2008 fell short of expectations as a global financial crisis worsened, deterring energy companies from risky and expensive offshore exploration.
Uruguayan energy officials, however, said that this time they have more data to try to lure major global players into the country's waters. The Ancap state company imports some 900,000 barrels of crude every 25 days from Venezuela, Brazil, Nigeria, Ecuador, Russia and South Africa for refining locally. Uruguay does not import refined fuels.
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