Uruguay Modifies Offshore Bidding Terms for Round 2009
The Uruguayan government decided to modify to bidding terms for offshore oil and gas exploration and exploitation, taking in account the changes in the oil industry. The dramatic drop of oil price as well as the deepening of the global economic and financial crisis has lessened the budgets for exploration in a lot of the first level oil companies, thus provoking the fall or suspension of exploration projects all over the world. The industry evolution monitoring by ANCAP, the governmental oil company acting as advisor of the Government, has had as a result some recommendations to the Executive Power for relevant modifications to the Bidding Bases and Contract Model of Uruguay Round 2009.
The proposed improvement removes the mandatory fulfillment for an exploratory drilling well during the basic exploratory period for A-classified blocks. This decision doesn't stop the companies to include exploratory wells in its exploration program offers, if is considered appropriate, issue that will be evaluated according to the rules establishes in the bases. Consequently will be adjusted the contract guarantee percentage for the first basic exploratory period, what will pass from 5% to 10% of the minimum exploratory program value for the A-classified blocks. Therefore all the blocks of the bid (A and B) will have the same requisites for guarantees and minimum exploratory program.
The Uruguayan government shows the capacity to adapt easily and efficiently to the current complex reality in the upstream oil exploration world, by improving the conditions for the bidding process, promoting that more companies in the Top 100 level or similar can make exploration bidding offers. With this update of the bases Uruguay will be one of the countries with the best conditions for investment in the oil exploration and exploitation.
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