AREA OFF-3 block is located 100km off the Uruguayan coast, in relatively modest water depths of around 250m, with the resource potential of up to 500 million barrels of oil equivalent (mmboe) and up to nine trillion cubic feet gas (TCF), from multiple exploration plays
Challenger Energy, the oil and gas company focused on the Caribbean and Atlantic margin, has bid for, and expects to be awarded the licence for AREA OFF-3 block, offshore Uruguay.
Challenger Energy seeks to license AREA OFF-3 block. (Credit: Guilherme Reis from Pixabay)
The company has submitted its offer for the AREA OFF-3 licence, as part of the Open Uruguay Round, First Instance of 2023.
Its bid includes an initial four-year exploration period, with a work programme limited to reprocessing and reinterpretation of 1,000km of 2D seismic data.
Last week, the Uruguayan national regulatory agency Administración Nacional de Combustibles Alcohol y Pórtland (ANCAP) received the company’s offer for the AREA OFF-3 block.
ANCAP outlined the terms of the company’s offer, noting that currently there are no further available offshore blocks in Uruguay, and referenced no other offers for AREA OFF-3.
Challenger Energy CEO Eytan Uliel said: “We are delighted to advise that on 2 June 2023, ANCAP publicly announced the details of Challenger Energy's offer for the AREA OFF-3 licence, which is the precursor step for the formal award of the licence to CEG, and which we understand should occur in the next 3-4 weeks.
“AREA OFF-3 possesses identified prospects of material scale, and our immediate work focus will be a comprehensive technical reassessment of the block, applying modern 2D seismic re-imaging and our subsurface knowledge of the Uruguayan offshore margin, similar to the successful geotechnical de-risking approach we have applied on AREA OFF-1.”
AREA OFF-3 block is located 100km off the Uruguayan coast, in relatively modest water depths of around 250m, with existing 2D and 3D seismic coverage.
It is the only remaining block offshore Uruguay, while other exploration licences are held by large players such as Shell and Apache and Argentina’s national oil company YPF.
Currently, the block has an estimated resource potential of up to 500 million barrels of oil equivalent (mmboe) and up to nine trillion cubic feet of gas (TCF), from multiple exploration plays.
The licence area, which covers 13,252km², is expected to expand the company’s licence holding in the Punta del Este and Pelotas sedimentary basins, offshore Uruguay.
It would increase the company’s total acreage in Uruguay to nearly 28,000km², making it the second largest acreage holder in the country, after Shell.
Eytan added: “Strategically, the award of this licence will cement CEG's position as a significant participant in Uruguay, a country that has fast become one of the world's frontier exploration hotspots.
“At the same time, our bid for the AREA OFF-3 block demonstrated the same disciplined and opportunistic approach we have taken in the past: acting strategically and nimbly to secure large and promising acreage, yet with low-cost work obligations, discretionary expenditure phasing, and no new seismic acquisition or drilling commitments.
“Over the next four years, we intend to further grow that confidence by applying our basin expertise and fully evaluating the licence's potential. We anticipate that we can create an opportunity of comparable value and industry interest to what we have thus far identified with AREA OFF-1, to the benefit of both Challenger and ANCAP.”
