MercoPress. South Atlantic News Agency

Chile opens Tierra del Fuego for oil/gas exploration

Chile will call an international bid for the exploration of hydrocarbons in the extreme south of the country during the first half of this year, announced Karen Poniachik, the country's Minister of Energy and Mines.

"We're working in the final details for the public bid of ten blocks which will be announced in the first half of 2007", said Poniachik. "We trust a significant number of international corporations will participate in the bidding process because there's great interest in exploring for oil and gas in Magallanes region, in the extreme south of the country", she added. In 2006 the Chilean government confirmed the existence of natural gas and oil in the Lake Mercedes area in Chilean Tierra del Fuego, but also split the area into ten blocks "to optimize exploration tasks". Chile's government owned oil corporation Enap is also involved in exploration in the area and is legally authorized to associate with foreign private companies. Chile is a net importer of fuel and is desperately looking for new sources of energy to cover the growing demand and overcome the significant dependency on natural gas imports from Argentina which in the last few years have become a problem since Argentine president Nestor Kirchner's administration privileges domestic consumption over exports in spite of contracts. Since 2004, in the peak of winter, Argentina has been limiting the supply of natural gas to Chile, a situation that has worsened, and Santiago estimates will dry up completely in the mid term. Chilean authorities have warned the population that it must begin to adapt to the idea of having to pay higher prices for energy.