Projects

CEOPGeneral description

Oil Operation Special Agreements (CEOP)

Pursuant to an international bid, on April 30, 2008 the Chilean Government was granted eight blocks (territory portion) for the exploration of oil and natural gas deposits, in Magallanes Region. ENAP was one of the forerunning companies in this process, and it also acted as a technical entity to advise the Chilean Government in its development.

The blocks granted, and the awarded companies and consortiums were: Tranquilo Block, IPR- Manas; Russfin Block, Apache; Brótula Isla Magdalena and Porvenir Blocks, (all three granted to Greymouth). The awarded companies participate in a 50% association with ENAP in the three remaining blocks, el Coirón (Pan American Energy), Caupolicán (Greymouth) and Lenga (Apache).

Background

• In March 2007, the President of the Republic, Michelle Bachelet, within the framework of "Chile Invierte" plan, announced an international bid to attract gas and oil Exploration and Production investments in ten geographic blocks located in the Magellan Basin.
• On June 8, the Mining Ministry launched the International bidding process in Punta Arenas, which included an active advertisement program, both in Chile and abroad.
• On October 10, a total seven companies and/or consortiums presented offers for nine of the ten blocks under bidding.
• On November 15, the Government granted nine blocks to six international companies. ENAP participates with 50% of the rights in three of these blocks.
• On April 30, 2008 the awarded officially entered into the agreements with the Chilean Government.

Minister of Mining announces CEOP of ENAP and METHANEX in Magallanes

“We have some great news for Chile. The nation’s Comptroller’s Office has approved the Special Operating Contract (CEOP) signed by the Chilean state, ENAP and METHANEX, for the exploration and exploitation of the hydrocarbons fields of the Dorado-Riquelme Block, located 120 kilometers from Punta Arenas”.

With these words, the minister of mining, Santiago González, with the chief executive of ENAP, Rodrigo Azócar and the senior vice-president of METHANEX for Latin America, Paul Schiodtz, when he welcomed the public-private sector alliance for taking advantage of, or strengthening, exploratory work in the area.

 “Should the joint explorations be successful, the natural gas supply will increase for the METHANEX production complex. The joint work of both companies will also generate some 120 jobs, directly and indirectly”, he said.

Minister González expressed his confidence in the work that ENAP and METHANEX are carrying out in the Dorado-Riquelme Block and emphasized that the government had great expectations with respect to this large hydrocarbons potential in the Magallanes basin.

Second METHANEX train

The chief executive of ENAP, Rodrigo Azócar, gave encouraging news for METHANEX, announcing that next November, this global methanol producer could start up its second train “thanks to which this alliance with ENAP will enable the supply of gas for its functioning”.

 “We are today celebrating the success of a state policy that has enabled ENAP and METHANEX to perform exploratory activities that are going to mean a contribution to the development of the Twelfth Region. The CEOPs have much to do with METHANEX’s presence in Magallanes because this company ensures the demand for natural gas as a raw material for producing methanol”, said Rodrigo Azócar.

The senior vice-president for Latin America of METHANEX, Paul Schiodtz, appreciated the final approval of the CEOP by the authorities, stressing that the work model it has been developing with ENAP “is proving its effectiveness in firmly promoting exploration activity in the south of Chile. We expect that the availability of natural gas will increase significantly in the Twelfth Region and contribute to restoring Methanex’s normal operating levels in Chile”, said the executive who stated that his company will invest some US$ 150 million in exploration work from now until 2010.

The drilling of up to 22 new wells is planned for the Dorado-Riquelme Block which, together with the 6 wells drilled in 2008, will have the potential for being an important new source of natural gas supplies for the Twelfth Region.

 Other CEOPs     

With the signing of this new contract, ENAP completes its fourth association with international private-sector companies under special operating contracts for the exploration and exploitation of hydrocarbons in association with the Chilean state.

In 2007, ENAP participated as a partner in three of the 10 CEOPs tendered, which resulted in the association of the state company with the international companies Pan American Energy, Greymouth Petroleum and Apache, in the Coirón, Caupolicán and Lenga blocks respectively.

For its part, METHANEX also participates in the Otway Block through a CEOP between the state of Chile and the WGM Consortium which also comprises the companies Wintershall and Geopark.