Eric Watkins
Senior Correspondent

LOS ANGELES, July 29 -- Chilean Mining Minister Santiago Gonzales said international oil companies (IOCs) that won bids to explore for oil and natural gas in the southernmost regions of Chile can begin drilling in August.

"The comptroller general approved the operating contracts so companies can begin drilling," Gonzalez said. In May, Chile signed contracts with four IOCs for exploration of eight blocks in the southern Magallanes region (OGJ, May 12, 2008, Newsletter).

As part of that bidding round, Chile's mining ministry July 15 awarded the Otway block in the Magallanes region to a consortium of Wintershall, GeoPark Holdings Ltd., and Methanex Corp., collectively WGM.

The award was made to WGM after Total SA, which last year won the Otway block in the round, inexplicably did not sign the special operating contract for the block in May.

The WGM consortium, which plans to invest $30.49 million on the Otway block, said it will acquire 330 line-km of 2D seismic data, 470 sq km of 3D seismic data, and will drill seven exploratory wells.

For its part, Chile's state-run oil company Empresa Nacional del Petroleo (Enap) said it plans to invest $300 million. Enap holds a 50% stake in the Coiron, Caupolican, and Lenga blocks in the Magallanes region.

Two weeks ago, GeoPark discovered an oil field on Chile's Fell block following drilling and testing at its Aonikenk 1 exploration well (OGJ Online, July 16, 2008).

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