(MENAFN - Saudi Press Agency) New oil discoveries and prospects for further exploration are drawing investors to Latin America despite heightened tensions triggered by Argentina disputing British sovereignty over the Falkland Islands and its energy-rich deep water, UPI reported.
The prospect of large exportable reserves of oil -- and possibly gas -- within easier reach than oil from the Middle East has far-reaching geopolitical implications that are not lost on the investors, analysts said.
Uruguay invited British and French oil firms to prospect for oil in the country, the Falklands are hopeful of major new finds, Brazil is developing a multibillion-dollar offshore oil and gas production hub, Venezuela is reorganizing its oil industry and Argentina is sparring with Spain to force Repsol YPF to invest more into increasing oil output.
Aware of the developments, China is pouring billions of dollars into acquiring new energy interests in the region. Brazil is helping Cuba to expand its energy profile.
Uruguay's state energy company Ancap said UK's BP, BG Group, Tullow Oil and French oil major Total were awarded eight offshore blocks in an Uruguayan bidding round. Together the companies pledged to invest a total of 1.56 billion.
The four companies' bids beat 19 other offers, indicating the intensity of interest in Uruguay's energy potential.
Nine groups submitted the 19 bids for the eight available blocks. Shell, Exxon Mobil, and consortiums led by Spain's Cepsa and Murphy as well as Argentina's YPF were unsuccessful.
Brazil's success with finding deep-water offshore oil and gas is seen behind Uruguay's initiative to build up its energy industry and reduce dependence on imports from Brazil, Ecuador, Nigeria, Russia, South Africa and Venezuela. Ancap currently imports less than 1 million barrels every four weeks.
Analysts said the 1.56 billion investment over a three-year period could draw more investors to Uruguay's energy exploration program if the prospects looked good.
Uruguay's Industry, Energy and Mining Minister Roberto Kreimerman said at least 6.5 billion of investment could be required through 2015.
Uruguay's intended explorations are likely to be adjacent to Brazil's oil fields.
Sinopec, the biggest oil and petrochemical products company in China, last week completed a deal to buy a 30 percent stake in Petrogal Brasil, responsible for oil and gas exploration and production activities of Portugal's Galp Energia in Brazil. The stake is worth 4.8 billion and Sinopec will also loan Petrogal Brasil 360 million.