ENARSA, Sipetrol Argentina YPF & Enap Begin Drilling in the Argentine Sea

The joint venture of ENARSA (Energy Argentina SA), YPF and Enap Sipetrol Argentina, a subsidiary of Chile's oil company ENAP, recently launched the Casa Rosada offshore exploration project in the Argentine Sea.

The Ocean Scepter, which has been contracted to do the work, arrived in Argentina in September. The rig will perform exploratory work in the Austral Basin of the San Jorge Gulf located in the Argentine Sea. If successful, this exploration program will help meet the increasing energy demands of the country.

The exploration initiative will require investments exceeding $150 million a year and generate hundreds of jobs directly and indirectly in the provinces of Chubut and Santa Cruz.

The exploration campaign includes two major drilling projects. The first one, which will be operated by YPF, is called the Aurora Project and is located in the San Jorge Gulf (Area GSJM-1). The second project, Helix Project E2 is located in the Austral Basin (Area E2) and will be operated by Enap Sipetrol Argentina.

The Helix Project E2 is operated by the tripartite consortium formed by ENARSA, YPF and Enap Sipetrol Argentina, while the Aurora Project lies exclusively with YPF.

In September 2006, ENARSA, Enap Sipetrol Argentina and YPF signed an agreement to explore, develop and exploit oil deposits in the Area E2 in the Argentine continental shelf, an area of about 14,000 square kilometers off the coast of Santa Cruz and the Strait of Magellan.

Over the next few months, and in the framework of Project Helix E2, the Ocean Scepter will spud the first of two planned exploratory wells that are approximately 1600 meters in depth and approximately 35 kilometers off the coast of province of Santa Cruz.

In this way, as the operator of Area E2, Enap Sipetrol Argentina returns to drill in the Austral Basin in association with ENARSA. The last direct involvement of a state enterprise in offshore activities dates back to the end of the seventies, with the General Enrique Mosconi rig.

The Aurora Project marks a return offshore drilling in the Gulf of San Jorge after 30 years. The first phase of the project envisages drilling four wells to a depth of approximately 2500 meters each. The primary objective is to identify the potential of the area as a producer of hydrocarbons.

Should the exploration phase prove successful, a one-year option on the rig can be exercised to drill additional wells as required for further development.

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