Uruguay Signs $1.65B in Offshore Oil-Exploration Deals

BUENOS AIRES - Uruguay's government on Friday signed offshore exploration deals with four oil and gas companies that have committed to invest $1.65 billion over the next three years.

The companies include the U.K.'s BP PLC and BG Group PLC, France's Total SA, and Ireland's Tullow Oil PLC. They will join Uruguay's state-owned energy company, Ancap, to explore in eight offshore blocks, according to a statement on the Uruguay president's website.

The blocks are located in waters that range from 500 meters to 2,500 meters deep. BP and BG will each explore three blocks, while Total will explore one and Tullow another.

"This is the most significant event in the search for energy resources in recent years," Industry, Energy and Mining Minister Roberto Kreimerman said in the statement.

Mr. Kreimerman said the projects aim to diversify Uruguay's energy matrix. "We have the chance for a country that is not an oil producer to have new wealth through this exploratory work, which will be done over the next three years, as well as the exploitation that follows," he said.

Mr. Kreimerman expects the drilling work to begin in mid-2013. He also said that by 2015 half of Uruguay's energy matrix will come from renewable energy.

Copyright (c) 2012 Dow Jones & Company, Inc.

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