Monday, September 26, 2022

Exciting discoveries off Africa result in oil block awards to Shell, APA by Uruguay

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Uruguay announced on Thursday that it awarded three of six oil blocks on its continental shelf, through its state energy company, National Administration of Fuels, Alcohols and Portland (ANCAP).

ANCAP said the winning bids for the blocks are

  1. Block OFF-2: Shell, which got a better score than APA Group for an exploratory program that involves the evaluation of the geology of oil and prospective resources, investment in 3D, gravimetric and magnetometric modeling and information licensing.
  2. Block OFF-6: APA Corporation, which commits the drilling of an exploratory well in the initial four-year period, the evaluation of oil geology and prospective resources and the licensing of information.
  3.  Block OFF-7: Shell, with an exploratory program that involves the evaluation of the geology of oil and prospective resources, investment in 3D, gravimetric and magnetometric modeling and information licensing.

President of ANCAP, Alejandro Stipanicic said the awards are extremely important as they mark the return of leading companies in the industry to the country after a decade of it receiving no such proposals.

ANCAP said, “The offers received were driven by discoveries in geologies analogous to those of the basins of Uruguay, on the West African coast and based on the prestige and reputation of the country in terms of its democratic, economic, and legal stability, as well as its demonstrated respect for the commitments assumed.”

Shell and TotalEnergies had made breakthrough discoveries offshore Namibia, which Westwood Global Energy Group said suggest a play similar to the Guyana-Suriname basin.

ANCAP also expects that the awards will facilitate the promotion of green hydrogen for export with approaches used by companies that develop strong investments around the world in oil & gas and renewable energies.

ANCAP reminded that it had also awarded the block OFF-1 on May 25 to Challenger Energy. This contract was proposed by ANCAP based on the offer made by the company in the May 2020 bid round and includes commitments for the evaluation and geological and prospective resource modeling of the area, as well as the licensing and reprocessing of existing 2D seismic information.

Uruguay’s neighbour to the West, Argentina, is also looking to unlock hydrocarbon resources offshore following Namibia’s discoveries. Equinor, Norway’s state energy producer, plans to drill the CAN-100 wildcat later this year.

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