France’s Total Eyes ‘Elephant’ Oil Discovery Offshore Uruguay

France’s Total Eyes ‘Elephant’ Oil Discovery Offshore Uruguay

France’s Total is to drill one of its most important offshore exploration wells in the Americas this year as it hunts for a giant oil field in Uruguayan waters, Bloomberg reported.

The company plans to start drilling Uruguay’s first offshore well in 40 years – the Raya-1 – this March. With more than 3,411 meters, it is to become the deepest exploration well by water depth on record. The first oil could come as soon as 2021, informed Seeking Alpha.

Total’s Exploration Director in Uruguay, Christian Tichatschke, spoke about company’s preliminary assessment of the field saying that: “There could be an elephant out there. This is what we are chasing. It is a very risky project but we believe we can find something.”

The Raya-1 and subsequent appraisal wells would have to prove resources of more than 1b barrels of oil to make it worth developing at those depths. Even if Raya is a dud, the state-run oil company and sector regulator Ancap still plans to offer 17 blocks, including three returned by BP, in an offshore licensing round that will start this year and finish in 2017.

A discovery could further extend an exploration boom in a country that currently imports all of its oil and gas needs. Total, Tullow Oil Plc, BG Group Plc, and BP Plc have invested more than $1b in exploration activities in Uruguay since they won eight offshore blocks in 2012, said Hector de Santa Ana, E&P Director at the state-run oil company and sector regulator Ancap.

If successful, the exploration activity could also rekindle further interest in the Pelotas Basin, shared by Brazil and Uruguay, even though investors shunned Brazil’s oil licensing round in the basin last year.

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