Uruguay's state oil company ANCAP has awarded two offshore blocks to Argentina's YPF and a consortium between Shell and APA (ex-Apache).
Shell and APA Corporation won the rights to Area OFF-4, where the consortium has committed to conducting 3D seismic acquisition. YPF won the AREA OFF-5 deepwater offshore block. Below is the committed exploratory program for both awarded blocks.
©ANCAP
The news of these awards was welcomed by Challenger Energy, which was awarded AREA OFF-1 block in May 2020. The company was then known as Bahamas Petroleum.
The new awards are also in addition to the awards in May 2022 of the AREA OFF-2 and AREA OFF-7 blocks to Shell, and the AREA OFF-6 block to APA.
According to Challenger Energy, as a result of the recent awards, all but one of the available offshore exploration blocks in Uruguay have now been licensed, and, with the exception of Challenger Energy, all have been licensed to global oil and gas majors.
“Challenger Energy considers that the rapid entry through the course of 2022 into Uruguay of well-regarded international companies, and their commitments to undertake sizeable and meaningful work programs in the near-term (including 3D seismic acquisition and new well drilling), validates both the company's decision to enter Uruguay in 2020, and underscores the solid technical foundation and excellent value proposition represented by the AREA OFF-1 block,” the company said.
Challenger claims that its AREA OFF-1 license area and the broader offshore Uruguay play system are analogous to offshore Namibia, where TotalEnergies (the Venus well) and Shell (the Graff well) have recently discovered prolific conjugate margins and reported multi-billion-barrel Cretaceous turbidite reservoirs.
Specifically, the AREA OFF-1 license exhibits the same Aptian age play source rock and petroleum systems being present on existing 2D seismic, Challenger said.
Eytan Uliel, Chief Executive Officer of Challenger Energy, said: "In 2020, Challenger Energy successfully bid for the AREA OFF-1 block in Uruguay, and in so doing strategically gained first mover status offshore Uruguay. We were able to secure the block with a modest initial work commitment, which we are already well advanced to completing, considerably ahead of schedule.
Subsequently, in May 2022, three more blocks were awarded in a contested open round, to Shell (two blocks) and Apache (one block).
Now, a further two blocks have been awarded in Uruguay in another contested open round, to each of a Shell-APA consortium and YPF, and YPF with partner Equinor is also poised to commence 3D seismic acquisition in a neighbouring block in Argentina. The estimated collective spend by those companies over the coming years on these activities is significant, in excess of $US230 million.
Overall, this means that almost all available offshore acreage in Uruguay has now been taken up, and apart from Challenger Energy, all by majors and NOCs who have committed to very sizeable work programs.
"This dramatic increase in interest in Uruguay and the neighboring region is directly related to the very sizeable discoveries made in the conjugate margin Orange Basin in early 2022, and through the course of 2023 we hope to move forward with a farm-in, so as to capitalize on that increased interest and allow for accelerated work on our block. Further updates will be provided in due course."
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