UK-based Challenger Energy finalized the contract for its second offshore block in Uruguay on Monday, as hopes of oil and natural gas production in the South American country grow.The country awarded the 13,525 km² (5,222 mi²) block 3 to Challenger Energy in July. The asset is around 100km off the country’s northern coast at the maritime border with Brazil.
It was the final block lacking a signed contract since Uruguay began its open bidding round five years ago.Block 3 is Challenger’s second block in Uruguay, as it also owns the 14,557 km² block 1, off the country’s southern coast near the maritime border with Argentina. The UK firm also owns assets in the Bahamas, Suriname and Trinidad & Tobago.
That was the company’s second big move in Uruguay in less than one week.Challenger signed an agreement to bring in US major Chevron as a partner on block 1 in a $12.5mn investment on 6 March. Chevron will get 60pc of the block.Oil and gas have never been found in Uruguay, despite two wells drilled in the 1970s and one in 2016, but recent discoveries in Namibia have sparked new hopes.
Shell and TotalEnergies found at least 11bn bl of crude and 8.7 Tcf of gas in the African fields. Namibia and Uruguay were connected before the earth’s plates separated, which means the countries have the same underwater geology. Therefore, it makes sense that Uruguay would also have oil and gas, state-owned oil company Ancap’s head of exploration Pablo Gristo said.
Challenger and Chevron have until September to conclude the initial four-year exploration stage on block 1. The firms will have to process 2,000km of seismic data and undertake two geological and geophysical explorations.Block 1 may hold between 2bn-4.9bn bl of crude, Challenger said.The exploration process for block 3 — which Challenger expects to hold up to 2bn bl of oil and 9 Tcf of gas — will extend until 2028.Uruguay has awarded five other exploration blocks: three to Shell, one to Argentina’s state-owned YPF and another to US-based Apache Corporation.
Source:https://www.argusmedia.com