Uruguay to open bids for offshore natgas drilling

Tue Nov 18, 2008 1:07pm EST
MONTEVIDEO, Nov 18 (Reuters) - Uruguay's government will open bidding in December for energy companies interested in exploring a natural gas deposit off the country's Atlantic coast, the energy minister said on Tuesday.
The discovery of a deposit of natural gas and possibly oil off the coastal resort of Punta del Este has sparked hopes of energy independence in Uruguay, which is entirely dependent on imports to meet its fuel needs.
"Somewhere out there we could have nearly 2 trillion cubic feet of gas and there are some pretty interesting signs of oil. But until we drill, we won't know if it's possible," Energy and Industry Minister Daniel Martinez told reporters.
Martinez said that for the purposes of the bidding the site would be divided into 11 blocks of between 4,000 and 8,000 square kilometers (between 1,544 and 3,088 square miles), and current geological data on the area would be available to bidders from December.
Energy firms that are interested will be able to present bids until July 2009.
Martinez said Brazil's state-run energy company Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz) (PBR.N: Quote, Profile, Research, Stock Buzz) and Spain's Repsol (REP.MC: Quote, Profile, Research, Stock Buzz) were among the companies that had expressed an interest in the area.
In neighboring Brazil, Petrobras announced the discovery of vast offshore oil reserves in the Santos basin last year.
Martinez said it would take at least three years to find out whether the Uruguayan deposit was commercially viable and that any production would not start for at least eight years.
Uruguay's small economy has expanded fast in the last five years, and energy demand rose 7.6 percent in 2007.
The country's state energy company Ancap buys a million barrels of crude roughly every 25 days, Martinez said. (Reporting by Patricia Avila; Writing by Helen Popper)