Enap subsidiary signs offshore Argentina contract

Chile's state oil firm Enap, through its international subsidiary Sipetrol, and Spanish oil firm Repsol YPF have signed a contract with Argentina's state-owned Enarsa to explore two offshore areas in southern Argentina's Austral basin, according to Repsol YPF and Enap statements.

Offshore staff

(Argentina)-Chile's state oil firm Enap, through its international subsidiary Sipetrol, and Spanish oil firm Repsol YPF have signed a contract with Argentina's state-owned Enarsa to explore two offshore areas in southern Argentina's Austral basin, according to Repsol YPF and Enap statements.

The offshore blocks are known as E2 - formerly known as CAM-1 - and CAM-3. The first well will be drilled this year in the Austral basin using seismic data recorded by Repsol YPF and Sipetrol in 2004.

Repsol YPF expects initial exploration investment in the areas will be between $20 million and $50 million, and that investment could reach $500 million in a later production phase.

Each company will have 33.3% participation in the consortium. The contract calls for Repsol YPF and Sipetrol to finance the exploratory stage and Enarsa to pay its share of the costs when commercial production begins, the statement said.

The agreement was signed in Buenos Aires by Sipetrol Argentina president Nelson Muñoz Guerrero, Enarsa president Exequiel Espinoza and Repsol YPF general director for Argentina, Enrique Locutora. Also in attendance at the signing ceremony were Argentina's President Nestor Kirchner, federal planning and public investment minister Julio De Vido, energy secretary Daniel Cameron, Chile's ambassador to Argentina Luis Maira and Enap CEO Enrique Davila.

This contract is part of a greater 10-year agreement signed by Repsol YPF and Enarsa in January 2006 to investigate alternatives for partnering in the exploration and development of hydrocarbons throughout Argentina's continental shelf, the San Jorge Gulf and the Austral basin.

Sipetrol's Argentine assets also include the operation of an offshore platform in the Poseidon exploration block, a hydrocarbons treatment plant (BRTF) currently undergoing a $5 million expansion and 50% participation in production from the Magallanes area.

Sipetrol is also 100% owner and operator of a production concession in the Pampa del Castillo-La Guitarra area in the San Jorge Gulf and a 50% partner in the Campamento Central Canadon Perdido area.

02/09/06

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