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Large Crude Build Forces Oil Prices Lower

Large Crude Build Forces Oil Prices Lower

Oil prices slipped on Wednesday…

Uruguay’s First Oil Auction In 7 Years Fails To Attract Any Bids

offshore rig

Uruguay’s first oil auction in seven years that had offered 17 offshore blocks didn’t attract any bids by the April 26 deadline, Uruguay’s state-run oil company ANCAP said.

Although two companies submitted documents to qualify for the Round 3 oil auction in Uruguay’s offshore, none of them expressed further interest by filing offers, ANCAP said in a statement after the deadline expired on Thursday. Those two companies were London-listed Tullow Oil and AziLat Petroleum, a South America-focused oil and gas exploration company. Tullow Oil is currently operator of the offshore Area 15, which it won in the previous round 2, and its partners in that block are Norway’s Statoil and Japan’s Inpex.

Uruguay will consider whether to amend its contract awarding system to adapt it to the current market conditions, ANCAP said.

According to a source at ANCAP who spoke to Reuters, Uruguay’s government could sweeten the terms of the contracts to attract interest in a possible auction to be held in 2019.

The latest auction was the first in Uruguay’s history that an oil bidding round has been deserted, Reuters notes.

While exploration interest offshore Latin America has recently revived—led by Brazil’s promising pre-salt layer—interest in neighboring Uruguay’s offshore has faded after the companies that had won blocks in the previous two rounds haven’t yet made significant oil discoveries.

Related: Oil Markets React Stoically To Rising Rig Count

Many Latin American countries have changed regulations to welcome foreign capital to their oil sectors, and now those countries combined are set to hold this year the highest number of oil auctions in history, aiming to attract international companies to bid on a total of 1,100 oil and gas blocks.

This year Brazil is planning to host yet another large offshore auction, following last month’s auction in which ExxonMobil snapped up eight exploration blocks, leading Big Oil’s aggressive move on acreage next to the coveted pre-salt layer. The bidding resulted in record-high signature bonus proceeds for the government, as oil majors were eager to get into the area ahead of presidential elections later this year.

By Tsvetana Paraskova for Oilprice.com

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