Chile Awards Oil, Gas E&P Contracts

LONDON Nov 15, 2007 (Dow Jones Newswires)

The Chilean mining ministry awarded nine oil and gas exploration and production contracts that will require a minimum $267 million investment, Mining Minister Karen Poniachik said Thursday.

Among the winning bidders were France's Total SA (TOT); Apache Canada Ltd., a unit of Apache Corp. (APA); Panamerican Energy LLC and Greymouth Petroleum Holding Ltd.

The government tendered 10 blocks, but one didn't receive any bids, Poniachik said. She didn't rule out launching a new tender for that block.

Greymouth, a New Zealand company, won four blocks, one of which will be jointly explored and developed with Chilean state oil and gas company Empresa Nacional del Petroleo, or Enap.

Apache won two blocks, one of which will be jointly explored and developed with Enap. Panamerican Energy and Total each won a block, and the ninth block was awarded to a consortium made up of International Petroleum Resources - a small company operating in Egypt - and Manas Petroleum Corp. (MNAP), according to the ministry.

The final contracts will be signed in the next few months, and companies have a six-month period to start exploring once the contracts are inked, Poniachik said.

The government is considering tendering other areas in the country, she said, "as at current international prices, projects that weren't attractive before are now interesting."

The tender for the oil and gas blocks is part of the government's effort to diversify its energy sources after Argentina reduced its natural gas exports to Chile in 2004.

The nine blocks tendered are located in the southernmost Magallanes region.

Chile currently imports 98% of its crude oil, 96% of its coal and 75% of its natural gas. Argentina is Chile's sole natural gas supplier.

Copyright (c) 2007 Dow Jones & Company, Inc.