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  HOME | Uruguay

Winning Bidders in Uruguay Oil Auction to Invest $1.56 Billion

MONTEVIDEO – BP, BG Group, London-based Tullow Oil and French oil major Total were awarded a total of eight offshore blocks in an Uruguayan bidding round and will invest $1.56 billion to explore those areas, state energy company Ancap said Friday.

BP and BG Group each were awarded three blocks each, while Tullow and Total each received one block in the Uruguay Round II auction, in which 15 blocks were on offer.

The four companies’ bids, which Ancap President Raul Sendic termed of “extremely high quality,” beat out 19 other offers.

The companies are to invest $1.56 billion over the next three years to explore for oil and natural gas deposits in the blocks, which cover a maritime area spanning nearly 50,000 sq. kilometers (19,305 sq. miles).

The contracts give Ancap the right of first refusal over the production of any oil or gas reserves that may be discovered.

The company also could partner with the winning bidders in a potential production phase, taking stakes ranging from between 22 percent and 35 percent in the different blocks.

If energy resources were to be tapped in those areas, the Uruguayan government would obtain approximately 60 percent of the profits, Ancap executive German Riet told reporters.

Uruguay’s industry, energy and mining minister, Roberto Kreimerman, said this exploration process implies “an extraordinary level of investment” for the country that was unheard of two years ago.

In that regard, he said total investment in the energy sector will amount to $6.5 billion through 2015.

Kreimerman added that the clear success of the Uruguay II auction was due to Ancap’s “seriousness and positive image” and the country’s transparency and stable legal rules.

The Uruguay Round II was launched in September 2011 after studies carried out by Ancap indicated the presence of offshore hydrocarbon reserves.

In the auction, Ancap offered 15 blocks for exploration covering an area of roughly 101,000 sq. kilometers (39,000 sq. miles)

Uruguay currently imports all the oil it consumes, most of it from Venezuela, Ecuador and Iran. EFE
 

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