Repsol YPF, Enarsa Sign Offshore Exploration Accords

Spanish oil major Repsol YPF has signed two agreements with Argentina's state energy firm Enarsa and other international partners to explore for hydrocarbons in offshore Argentina, Repsol YPF said in a statement.

The first agreement with Enarsa is to investigate alternatives for partnering in the exploration and development of hydrocarbons in Argentina's continental shelf, the statement said.

The agreement is for 10 years and relates to all offshore areas on the continental shelf from the border with Uruguay to the Falkland Islands, the San Jorge Gulf and the Austral basin.

Repsol YPF and Enarsa agreed to create working groups, invest in studies of the areas, exploration and, in the case of successful discoveries, production development activities.

Repsol YPF expects to begin drilling in the Austral basin this year based on 3D seismic data obtained in 2004.

The company will then start drilling in the Malvinas basin in 2008 based on 3D seismic data completed in early 2005, the statement said.

COLORADO MARINA BASIN

Under the second agreement, Repsol YPF and Enarsa in partnership with Brazil's federal energy company Petrobras and Uruguay's state oil firm Ancap will form a consortium to explore for hydrocarbons in three blocks in the Colorado Marina basin, the statement said.

Repsol YPF will act as operator with a 35% share. Enarsa will also have 35%, Petrobras (NYSE: PBR) will have 25%, and Ancap's Argentine subsidiary Petrouruguay will have 5%.

Repsol YPF, Petrobras and Ancap will invest US$40mn-100mn in exploration of the area. If commercially viable reserves are discovered, investment in joint development and production could reach over US$2bn due to the high-risk nature of deepwater drilling.

Repsol YPF will begin registering and processing 1,000 sq km of 3D seismic this year and plans to drill its first well in 2008.

Repsol YPF invested US$68mn in Argentine offshore exploration from 1999-2005 and plans to invest US$207mn from 2006-2009, the statement said.

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