Neuquen Expects Tender Round to Bring in US$80mn-100mn

Neuquen Basin, Argentina
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Argentina's Neuquen province expects 13 oil and gas fields to be auctioned in 2004-2005 to bring in investment of US$80mn-100mn, Neuquen's hydrocarbons director Enrique Montesinos told BNamericas.

Neuquen is preparing the bidding rules and will launch an international tender in March-April for the first field, called Totoral, Montesinos said. The province plans to tender one block about every 1.5 months and could add another 4-5 blocks to the process by end-2004.

Companies currently operating in Neuquen and some without operations in the central-west province have expressed interest, Montesinos said.

Mexico's state oil company Pemex is expected to bid on at least one block in the new round, which would mark its entry into Neuquen's hydrocarbons business. Germany's Wintershall and US company Apache are also lining up to bid for the fields, the official said. Companies already operating fields in Neuquen, including Brazil's Petrobras, US-based ChevonTexaco and Spain's Repsol YPF, are also interested.

Neuquen's previous tender round in 2000-2003 comprised 25 exploration blocks, of which contracts were signed for 20, Montesinos said. Investment in these blocks should bring in US$220mn, he added.

No major changes are expected in the bidding rules for the 13 new fields. "It's basically a continuation of the previous tender round," he said. Blocks not awarded in 2003 because of lack of interest could be re-launched in 2004-2005. Neuquen will publish the schedule for the tenders during the week February 9-13. Exploration contracts are for six years, divided into three stages.

Companies are attracted to Neuquen because of its record for legal stability in the hydrocarbons sector. The province does not expect investors to be put off by domestic gas tariffs, which are frozen at their "pesofied" January 2002 levels. "Companies are thinking about what will happen in four years, not what will happen next week," Montesinos said. Gas tariffs are a national issue that the federal government should resolve by year-end to avoid having to import gas from Bolivia or Brazil, he added.

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