Enap, Ministry Plan Tender for Three Magallanes Blocks by Year-End

Chile's state oil company Enap and the mining and energy ministry are developing bidding rules for three blocks in Region XII's Magallanes basin in order to tender JV exploration works before year-end, minister Karen Poniachik told reporters.

Ten companies already have expressed interest in the three blocks in the far south of the country, dubbed Coirón, Caupolican and Lenga, Poniachik said.

Enap and the ministry began preparing the bidding rules two weeks ago. Poniachik cited technological and financial support as two factors behind Chile's decision to seek partners.

The three blocks are among the 11 blocks in the basin Enap has defined along geologic parameters. The company plans to explore the remaining eight blocks on its own.

Although the nearby Lago Mercedes block produces gas, Poniachik said the state is not ruling out the possibility the three blocks could produce oil.

Enap has known about sizable gas reserves in Magallanes for decades, but only now has the price of gas risen high enough to make E&P in the region feasible.

Enap began E&P works on the Lago Mercedes block in 2005 and Bermuda energy firm Geopark holds a special hydrocarbons operating contract (CEOP) for the Fell block in Region XII. Otherwise, the region's gas reserves remain largely untapped.

Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.