On Friday 5, 2012 the ANCAP, the national oil company of Uruguay, signed offshore E&P contracts with English oil companies BG and BP, the French Total and the Irish Tullow Oil.

The announcement was made in a press conference headed by the Energy Minister Roberto Kreimerman and Raul Sendic, President of ANCAP.

The Energy Minister said that the agreements are the most relevant milestone of the last years in Uruguay, and shows the success of the Uruguayan energy policy and the ANCAP policy in search of indigenous resources.

The Ancap’s President Raul Sendic said the signing of the contracts means a “historic day” for Uruguay and the national oil company.

The companies were awarded the blocks on last April in a transparent but very fast decision process. Each English company won three oil blocks and one each for Total and Tullow Oil. The blocks are located in waters between 500 and 2500 meters depth.

The total amount of investment is valued in 1.562 million dollars during the next three years.

There will be a relevant increase in quantity and quality of the geological knowledge of the offshore basins since the work plans represents as a whole: one exploratory well at ultra-deep waters, 33.240 km2 of 3D seismic data, 13.080 km2 de 3D electromagnetic data, 130 samples of sea bed, and 3.000 km of 2D seismic data for the first three years of exploration work.

The contract is classified as a production sharing agreement, which means that the companies will be benefited by the part of the available production according to the percentages established in the contract. The period of the contract shall be 30 years, and ANCAP may extend it up to a maximum of 10 years.

ANCAP will have the option for buying totally or partially the oil production of the companies if it is needed for national consumption of the country.

ANCAP may be associated for the exploitation of each productive block in a percentage already offered by each winning company.