Bid round for Argentina blocks nears end

Four companies presented economic offers on Tuesday for blocks in Round V, a quarterly E&P auction managed by provincial oil company Gas y Petróleo del Neuquén (GyP) under the Neuquén Exploration Plan.

Statoil, Pampa Energía and Retama Argentina vied for the Bajo del Toro Este, Parva Negra Oeste and Las Tacanas Norte blocks, while Chevron bid on Loma del Molle Norte with an offer of more than USD 19 million.

Winners will enter into four-year exploration agreements with GyP, which will initially have a 10% stake in each area. The provincial company can choose to either retain that stake or give it up in exchange for 2.5% of output.

“It is a success to have created GyP and to have strengthened the alliances with the operators under the methodology of the carry, which was once criticised and questioned,” Neuquén Governor Omar Gutiérrez said about the partnership structure for the blocks. “We have defended it and we will continue to defend it, because it allows us to appropriate a greater share of the income from our resources to the province.”

Following the assessment of economic proposals, GyP’s board will have 20-40 days to approve contracts with the winning companies. The contracts will then be subject to approval from Neuquén’s executive branch.

The other areas tendered in the round – Aguada de Castro Oeste, Cerro Arena Sur and La Tropilla I – received no bids.