Uruguay’s government kicked its first ever offshore bidding round in December 2008. Now with lower prices and financial uncertainty affecting potential suitors for its offshore licenses, the country has changed some of its original rules to keep interested parties attentive. The Uruguayan national oil company, ANCAP, has monitored the industry since the bid round was announced in December. As a result of drop in price and shrinking or suspended exploration budgets among the world’s operators, ANCAP is recommending relevant modifications to the bidding bases and contract model of the Uruguay Round 2009. Due to proposals by ANCAP, the mandatory fulfillment for an exploration well during the basic exploratory period for A-classified blocks has been removed. Companies will not be restricted from including them in program offers. The contract guarantee percentage for the first basic exploratory period will be adjusted from 5% to 10% of the minimum exploratory program value for the A-classified blocks. Basically, this will give all Uruguayan blocks (A and B) the same requisites for guarantees and minimum exploratory program. The Uruguayan government signed its new decree on March 30, 2009. It hopes that the change will be viewed as an example of its capacity to adapt easily and timely to the current economic reality as it pertains to the upstream sector. The Uruguayan government considers the country to now have some of the best conditions for exploration investments. As it is, licenses will continue to be awarded on a production-sharing agreement only. The 11 blocks on offer are in the Punta del Este and Pelotas Basins, and the Oriental del Plata further offshore. Available blocks range from 965 to 3,861 sq miles (2,500 to 10,000 sq km) in size. Water depths range from 164 to 4,922 ft (50 to 1,500 m). ANCAP’s technicians used a series of 2-D seismic data acquired by Wavefield Inseis ASA to establish a number of bright spots and possible plays in the region. Uruguay’s government announced in 2008 that it had identified more than a dozen prospective offshore natural gas areas, each of which could boast between 1 Tcf and 3 Tcf of gas, although a spokesman for ANCAP cautioned that it would be very premature to estimate reserves. Currently, no companies work offshore Uruguay and there are no producing fields either on or offshore. In the current economic climate, the country will be hard pressed to attract investment to an untapped prospect with unproven reserves. At present, no companies are working in Uruguay’s upstream oil and gas sector, but two small companies (one from US and one from Australia) have applied to get an onshore prospection license, ANCAP’s spokesman said. The due date for Uruguay’s bid round is held at July 1, 2009. Visit www.rondauruguay.gub.uy for more information on available acreage.
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