Neuquen Awards Rio Barrancas Block, Signs Contract

Argentina's Neuquen province has awarded the E&P license for the Rio Barrancas block to a consortium of local engineering firm Ingenieria Sima and the YPF subsidiary of Spanish oil major Repsol YPF (NYSE: REP), the province said in a statement.

The concession contract was signed between the consortium and Neuquen province-controlled oil company Hidenesa, which will participate with a 10% stake if a hydrocarbons discovery is made in addition to the province's 12% royalty rate.

YPF and Ingenieria Sima will invest US$18.6mn in the three-year exploration period. The consortium will drill three wells, carry out 600 sq km of 3D seismic, 500km of 2D seismic and reprocess 172km of seismic data.

The consortium and Hidenesa will form an operating committee in the next few days to begin carrying out the investment plan.

This tender marks the first time the framework allowing Hidenesa to back in has been used. The province also intends to use the methodology for the other areas set for tender in 2007.

The consortium of German oil company Wintershall Energia and Argentina's Petrobras Energia (NYSE: PZE) also bid on the block, offering US$12.2mn for the exploration period.

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