May 17, 2019 / 4:00 PM / 8 days ago

Argentina grants offshore oil, gas exploration permits in Malvinas West basin

BUENOS AIRES (Reuters) - Argentina awarded permits for hydrocarbon exploration in 18 areas off its southern coast to companies including Exxon Mobil Corp, Total SA, YPF SA and Royal Dutch Shell Plc, the government said on Friday.

The winning companies offered bids totaling $724 million, the government said in official statements, and won the rights to explore for up to 13 years in areas of the South Atlantic, some near the Malvinas Islands under the control of the British government but whose sovereignty is claimed by Argentina.

The other companies that will make up exploration consortia in Argentina’s Malvinas West basin include BP, Qatar Petroleum, Tullow Oil, Pluspetrol, Wintershall, Equinor, Eni, Mitsui &Co Ltd and Tecpetrol SA.

Offshore exploration could boost Argentina’s reserves, which fell in the last decade due to regulations that discouraged foreign investment in the energy sector. President Mauricio Macri has sought to increase energy output. In 2018, 18 percent of the country’s gas production came from offshore areas.

The government will issue the permits between June and August, giving the companies up to 13 years to explore the deepest areas, and 11 years for the concessions closest to the coast, the economy ministry said in a statement.

“Activities will include drilling at least two wells, and during the lifetime of these permits the companies can apply for a 35-year production license for these areas,” it said.

The biggest bid was for the MLO-115 block of the West Malvinas basin, at $105.97 million from a consortium made up of Tullow, Pluspetrol and Wintershall, the ministry said.

Reporting by Jorge Otaola and Walter Bianchi; Writing by Cassandra Garrison and Mitra Taj; Editing by Marguerita Choy and Tom Hogue

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