Mendoza to Launch Tender for 24 Blocks by Year-End

Argentina's Mendoza province plans to launch a tender by the end of this year for 24 oil and gas exploration areas, the provincial economy ministry's promotion and investment undersecretary Alejandro Rodríguez told BNamericas.

"At the moment we are finishing putting together all the technical information that will allow the tender to take place," Rodríguez said.

The province plans to publish the bidding rules in 20-30 days and then award the contracts by March 2005, the official said.

The areas, most of which are in the southern part of the province in the Malargüe zone of the Neuquén basin, include 16 blocks that reverted to the province in the 1990s after concessionaires failed to meet their investment obligations, and eight secondary areas on the edge of the basin, Rodríguez said.

The exploration contracts will be for two years, but can be extended for 25 years if production contracts are signed, he said, adding it is too early to estimate the investment in the blocks.

There is no minimum drilling plan for each block, "there are no conditions in this sense," he said.

Mendoza expects companies to find both oil and gas in the blocks, although reserve estimates are old and must be updated, the undersecretary said.

The tender is designed to boost Mendoza's flagging oil and gas production, which has dropped due to lack of investment from companies following the country's economic crisis in 2002.

"There has not been renewed investment in these areas, and obviously the reserves are used up with time and without investments there is a drop-off, which we are working hard to reverse," Rodríguez said.

Companies currently operating in southern Mendoza are Spain's Repsol YPF, Brazil's federal energy giant Petrobras, US company ChevronTexaco, and Canada's Petro Andina, he said, adding these firms have indicated their interest in participating in the tender.

"We already know of marked interest from some companies," the official said. "They have contacted us asking about some aspects of the concessions."

Venezuela's state oil company PDVSA has also shown an interest in participating in the tender, Rodríguez said.

The province hopes local companies will also take part either on their own or in partnership with foreign firms, he added. The province will set up a website with the details of the auction at the end of December, Rodríguez said.

Mendoza's last major oil and gas exploration tender was in 1992.


One company that is interested in the tender is Petro Andina, which has invested US$10mn to drill three wells in Mendoza since April this year, the economy ministry said in a statement on Monday.

The wells are located in block CNQ7A in Malargüe on the border with Neuquén province.

Petro Andina currently partners with Repsol YPF on two blocks in the area, Rodríguez said, and the company plans to invest US$40mn in new areas in 2005, according to the statement. Petro Andina officials were not immediately available for comment on Tuesday.

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