Frontier opportunities open up in Latin America
Uruguay and Argentina may join Brazil in offering frontier exploration acreage along the Atlantic Margin. As mentioned in our inaugural Latin America Upstream Service's month in brief, Brazil's 14th Round will include frontier acreage in the Pelotas and Sergipe deepwater basins, among others. The country is easing local content requirements, improving environmental licensing processes and considering a reduction in royalty rates to further attract interest.
Farther south, Uruguay is rumored to be planning to launch Round III after postponements following the drop in oil prices. Seventeen blocks could be made available with an average size of 4,400 km2. The new terms expected for the round include lower qualification requirements for shallow water blocks, longer exploration periods for ultradeep water areas and higher cost recovery limits.
Argentina plans to offer six to ten offshore blocks in the Austral basin. A significant portion of the country's gas is produced by the Cuenca Marina Austral and the Area Magallanes developments in this basin. We expect onshore processing and transport infrastructure to continue operating at close to full capacity well into the next decade and to be potential bottlenecks for any new discoveries in the area.