There were no bids on any of the 17 offshore blocks that Uruguay offered up in its first oil auction in seven years on April 26, but the government might sweeten terms next year, a source with state-run oil company Ancap said.
The auction was held as rising oil prices have renewed energy companies’ interest in Latin America. But interest in Uruguay waned after no significant findings were made by companies that won exploration contracts in two previous bidding rounds.
Thursday’s auction for offshore exploration and production blocks marked the first time an oil bidding round has been deserted in Uruguay.
The source said the government might offer better terms and conditions to revive interest in a possible auction next year.
With more than 1,000 oil and gas blocks on offer in Latin America—mostly in Brazil—2018 is expected to be a competitive year for countries seeking energy investments. Not many companies have room in their portfolios for countries with high geological risk like Uruguay.
Uruguay is in the middle of Brazil’s vast and rich offshore basins and Argentina’s promising coast.
So far in Latin America, the results of what some analysts call “a new energy reform” has delivered mixed results.
Brazil and Mexico have awarded most of their offered blocks, but Colombia had to delay its bidding process and contracts that Peru awarded through direct talks and without an auction have come under fire.
Despite the lack of big discoveries, previous oil exploration in Uruguay has helped it update and improve reservoir data.