Brazilian government controlled oil and gas multinational Petrobras begins seismic surveying offshore Uruguay in early 2010 and will keep its level of investments in Argentina as part of the Latin America expansion policy of the Brazilian company.
"In spite of the enormous resources Petrobras will need to develop its pre-salt oil deposits, other South American countries are also a priority for the corporation and we will keep the high level of investments in the region," said Jorge Zelada head of Petrobras International Areas Department during a press conference Wednesday in Rio de Janeiro.
Brazil's pre-salt deposits, which demand extremely deep drilling and still have to be commercially developed are estimated to hold anywhere from 50 to 80 billion barrels of oil, five times the country's proven reserves of 14 billion barrels.
Brazil is planning to invest at least US$ 174 billion in the pre-salt enterprise in the next four years. Nevertheless, "Petrobras will not abandon its overseas operations and is giving priority to South American countries", added Zelada.
"We are present in all South American countries and it is our intention to keep expanding. This week we signed with Uruguay for the exploration in deep waters; we have taken over a significant share of the fuels distribution market in Chile, we are keeping our position in Argentina and we also have exploration projects in Peru," revealed Zelada.
Petrobras (40%) together with YPF (40%) and Portugal's GAL (20%) have been awarded two offshore areas in the Atlantic platform by the Uruguayan government.
"Following the signature of contracts with Uruguay's oil company Ancap we can now begin to plan the seismic surveying program for this summer", said Zelada who added that the big problem "it that these are areas mostly unknown with very little information. We don't know if the deposits that run parallel to the Brazilian coast extend that far south", he added. "We will be purchasing all the data available".
Uruguay divided its hydrocarbons offshore exploration area in eleven blocks and at the end of 2008 held a bidding round of which the Petrobras/YPF/GAL consortium was awarded blocks 3 and 4.
Under contract clauses the consortium has four years for surveying and on the fifth and sixth is obliged to drill, although it can do so before if it so wishes. Uruguay's Ancap also has the option of joining with a 20% participation in costs and profits until the moment oil is found and proven commercially viable.
Irani Carlos Varella head of Petrobras Uruguay said the consortium would be investing an estimated 80 million US dollars in the exploratory phase because "we are certain to find oil". Anyhow the decisive pre-exploration drilling seismic surveying "will begin in 2011"
Uruguay's Ancap president German Riet also announced that the company is about to sign a contract for additional surveying in the nine blocks that remained not awarded. As to the possibility of a second Uruguay round, Riet said that it depends on the new administration that takes office next March.
"But Venezuela's PDVSA and Russia's Gazprom have expressed an interest and the Chinese are also sniffing around," said Riet.