Challenger Energy identifies ‘three sizeable prospects’ offshore Uruguay

Upstream firm Challenger Energy identified “three sizeable prospects” offshore Uruguay, citing a technically supported prospect inventory of 1-2Bb (billion barrels of oil).

Challenger holds a license for area OFF-1 and has been carrying out 2D seismic reprocessing, interpretation and mapping work under minimum work obligations.

Last year, Isle of Man-registered Challenger signed a 30-year license for the 15,000km2 block. 

Company officials are looking at a farm-out. 

CEO Eytan Uliel said in a statement that “our next-step objective is to farm-out to an industry partner(s), so we can fast-track a 3D seismic acquisition. The high-quality data set we have now compiled, and the intellectual property created, positions us well, and we will shortly be initiating a formal farm-out process.”

Uruguay’s national oil company Ancap recently received three offers for two offshore hydrocarbons areas in the second open round of 2022. As things stand, five areas have received bids with signing pending, and a seventh area is still up for grabs.

Discoveries off West Africa in geological formations analogous to those of Uruguay, along with the country’s stable operating environment, have spurred the interest of E&P firms, according to Ancap.

Offshore exploration in Uruguay gathered pace in 2016 with France's TotalEnergies drilling the first well in around 40 years. Oil and gas shows have been reported, but no commercial discovery has yet been made.

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Argentina’s federal climate change and sustainable development department authorized state-controlled oil company YPF and partner Norway’s Equinor to conduct a 3D seismic shoot offshore Buenos Aires province. 

The companies are planning to carry out the work at deepwater area CAN-102, a resolution published in the official gazette said. Local media outlet EconoJournal, citing unnamed sources, said work could get underway in March 2024.

A proposed Equinor exploration campaign targeting other areas, CAN-100, CAN-108 and CAN-114, did not advance as planned last year following court injunctions – that were later lifted – blocking the work. Last year the government greenlit the drilling of an exploration well, Argerich-1, at CAN-100.

Exploration was carried out in shallower waters offshore Buenos Aires, in the Colorado basin, from 1969-97, with 18 exploration wells drilled. Oil was extracted from one during repeat formation testing.

Hydrocarbons, chiefly gas, are currently produced offshore Tierra del Fuego province in the Austral basin, where a consortium last year announced a final investment decision on the Fénix gas project. 

According to a YPF presentation, Argentina has 31Bboe (billion barrels of oil equivalent) potential offshore hydrocarbons resources, compared with the estimated 29Bboe in the onshore Vaca Muerta unconventional formation. 

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German hydrocarbons company Wintershall Dea said the US$700mn Fénix gas project was advancing as planned and that production may start early 2025.

The Austral basin natural gas platform is being executed offshore Tierra del Fuego province. 

The corresponding license area CMA-1 currently covers around 15% of Argentina's gas demand. Wintershall is a 37.5% stakeholder in the acreage, with the balance held by Total Austral and Pan American Energy.

Fénix gas output is expected to peak at 10 million cubic meters per day during a 15-year production window. 

A public consultation on the project, involving an area of 8,960km2, was held on Wednesday. 

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Chilean LPG and LNG distributor and trader Lipigas will invest 50bn pesos (US$60mn) this year, with a sharp focus on sustainability.

The company, which also operates in Peru and Colombia, is expanding a network of LNG refueling stations for heavy goods vehicles from southern Chile to Lima. Lipigas, which already has two stations, in Chile’s Maule and Valparaíso regions, plans to open more this year and next in Santiago Metropolitan, Coquimbo and Antofagasta regions. 

Lipigas also cited an agreement with Paraguayan biofuels production project Omega Green to procure green LPG, which is due to be sold in Chile from 2026. Construction of 20,000b/d Omega Green is due to start this year. 

Lipigas is also working on a circular economy scheme to produce green LNG domestically. In June the company announced an US$8mn facility, planned for Ñuble region, that would use pork industry waste to produce the fuel, initially targeting the heavy transport sector. The facility, due online in around a year, will have capacity to process 7,500-16,500m3 of gas per day, according to information on the company’s website. 

Lipigas, a statement said, is also focused on electric power subsidiary EVOL, a venture involved in electricity trading, energy efficiency services provision, renewable energy and project consulting, among other areas. "Lipigas will continue to develop EVOL to generate business and capabilities that will take advantage of the opportunities offered by the development of the electricity market in Chile," it said.

Lipigas also has its M&A radar spinning, citing the areas of logistics, process digitization and customer service.

Producing only a small quantity of hydrocarbons, Chile is a net oil and gas importer and aims to become carbon neutral by 2050.