Shell, Apache secure acreage offshore Uruguay

Shell and Apache were awarded exploration blocks for offshore acreage in Uruguay's recent licensing round, committing an estimated $200mn to seismic and drilling work over the next four years, the operators of an adjacent licence said June 27.

Shell will undertake exploration activities in the shallow offshore block immediately next to Challenger Energy's OFF-1 licence, OFF-2, as well as the deep water OFF-7 area.

Uruguayan regulator ANCAP says Shell will commission a 3D seismic shoot under the terms of its four-year licensing deal.

Apache, meanwhile, has secured a four-year licence for the OFF-6 deep water licence, with the programme to include the drilling of a single exploration well.

OFF-2 was the only licence to generate bids from more than one explorer, with both Shell and APA submitting proposals.

Challenger Energy was awarded the OFF-1 licence in 2020. It has pegged the licence's reserve potential at above 1.5bn barrels of recoverable oil equivalent in reserves, slightly higher than ANCAP's resource estimate of 1.35bn boe as a P50 "expected ultimate recoverable resource."

OFF-1 is thought to be on-trend with offshore Namibian discoveries made by TotalEnergies and Shell. These Uruguayan blocks are thought to possess similar Cretacous turbidite reservoirs to the ones responsible for "multi-billion-barrel" finds in Namibia.

Challenger Energy it "considers the entry into Uruguay of two well regarded international companies, and the commitment by both to undertake sizeable and meaningful work programs during an initial exploration period (including 3D seismic acquisition and new well drilling), to be a highly positive development, validating both the company's decision to enter Uruguay in 2020 and underscoring the solid technical foundation and excellent value proposition represented by the OFF-1 block. "