RE: Argentina8 Jun 2018 13:21
Interviews with oil industry executives, consultants, geologists and officials point to optimism for Argentina�s upcoming auctions and for President Mauricio Macri�s government, which has sought private sector and U.S. government help in structuring the process. �Growing confidence in the current government�s policies - their focus on trying to create an environment that is attractive for investments - has been the big change,� Shell�s (RDSa.L) head of deepwater Wael Sawan told Reuters on the sidelines of an industry gathering in Houston. �It�s that focus that has created more interest by the sector to say �why not, let�s look at this.�� The auction will be a test of company confidence in the longevity of Macri�s reform agenda because it can take a decade between an initial investment in offshore exploration and the first production. Argentina will take bids for three offshore basins from July through November. Exploration rights for blocks in the 130,000-square km Argentina Basin, 90,000-square km Malvinas West Basin and 5,000 square kilometers in the Austral Basin are on offer. While little exploration has been done outside the Austral basin, YPF has identified 22 million barrels of oil equivalent for further investigation, upstream head Pablo Bizotto said at an event last Wednesday.
�There is a lot of interest from large companies - Chevron, Exxon Mobil, Shell,� Daniel Redondo, the secretary for strategic energy planning in Argentina�s Energy Ministry, told Reuters on the sidelines of a recent event.
Consultancy Bain & Company, on a contract with the government to gauge interest, last year interviewed more than 60 companies, including �all the majors� and independent explorers including Anadarko (APC.N) and Hunt Oil, said Diego Garcia, a Buenos Aires-based Bain partner. Colombia�s Ecopetrol may bid in the auctions, its chief executive told Reuters. Norways Statoil STL.OL, which already has onshore drilling projects in Argentina, is partnering with YPF on offshore seismic studies and is �considering future licensing rounds,� a spokesman said.
�Huge areas of the Argentinian continental shelf will be available for bids from companies,� executive vice president for exploration Tim Dodson said at an event in Buenos Aires last Wednesday. �We have of course started our evaluations already.� Chevron (CVX.N) and Exxon (XOM.N) declined to comment. Anadarko and Hunt did not respond to requests for comment. Firms likely won�t decide whether to bid until the full terms of the auction are published.
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