New Wave Media

Uruguay is considering extending the length of its oil exploration contracts with foreign companies drilling in its waters in order to shore up investment at a time of plunging crude prices, it said on Wednesday.

 

BP, BG Group, Total, a joint venture of Tullow Oil and Inpex, and a consortium of YPF, Royal Dutch Shell and Galp all have exploration agreements with the South American country and have invested around $2 billion to date.

 

But the recent fall in oil prices has made exploration in Uruguay unattractive, Hector de Santa Ana, exploration manager at state oil and gas company Ancap, said in an interview.

 

"The (current) prices don't tally with any kind of prospect on our maritime shelf," he said. "If we find oil, there is no possible scenario in which this could be profitable and be developed."

 

Under the current contracts, the companies have a set period in which to undertake exploration drilling and then make a decision on whether to proceed. Santa Ana said the contracts could now be amended to allow a one-off 10- to 12-month suspension of the time element.

 

Uruguay imports all its oil, but its energy demands are rising and in 2009 it began to offer international companies contracts to look for hydrocarbons on its territory.