Empresa Nacional del Petroleo of Chile has signed a contract with ConocoPhillips (COP) to jointly explore and exploit oil and gas deposits in the Magallanes region, according to a source "familiar with the agreement" cited by Upstream.
The state-run firm will retain a 51 percent stake in all fields found in the remote region, Reuters reported, based on an anonymous source.
In total, Houston-based COP will invest between $70 and $100 million in Chile, depending on the success of the various stages of the process as they are carried out over the next four years.
The two firms had been working together to complete geographical and geological studies in the region of interest since August 2014. Bloomberg reported that ENAP spent $100 million in oil and gas exploration efforts in 2013 alone.
At the time, ENAP CEO Marcelo Tokman stressed that the agreement was an additional initiative to strengthen the exploration of unconventional oil and gas resources in the southern region.
"Our commitment to Magallanes is to ensure the supply of gas in the long term," Tokman said in a press release, adding that he partnered with the American firm for its access to advanced technologies and scientific resources.
The CEO of ENAP spoke to the local newspaper La Tercera earlier this month and spoke of a plan to solicit $800 million from foreign investors to fund the natural gas exploration in Magallanes.
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On Monday, Sunday Times broke the news that COP rejected a takeover deal from Ineos Chemicals. The buyers had been interested in the oil major's North Sea assets near Britain.
COP has reportedly planned to shut down its North Sea pipeline network, prompting Ineos to offer a buyout. The acquisition would have complemented the chemical company's recent gas field purchases from LetterOne, worth 500 million euros.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More