Chile’s state-oil company, ENAP, signed an agreement with U.S. independent oil and gas firm ConocoPhillips to explore and potentially produce shale gas in the Magallanes region of southern Chile, Kallanish Energy learns.
The Coirón bloc project will be rolled out in phases depending on the success of each stage, with ConocoPhillips possibly investing between $70 and $100 million over the next four years, ENAP said.
The deal, announced by ENAP on Tuesday, is yet to be approved by the Chilean energy ministry. It includes a number of commitments ConocoPhillips will need to meet in order for the company to hold a 49% share in the Special Production Contract with the state firm, which will operate the project with a 51% stake.
“The partnership with a leading global company means incorporating resources, expertise and technology into our operations, allowing us to maximize the potential of unconventional hydrocarbons identified in the Magallanes region,” said ENAP’s general manager, Marcelo Tokman.
Earlier this year, the U.S. Geological Survey (USGS) confirmed the existence of significant potential for unconventional gas in the Magallanes region, with 8.3 trillion cubic feet (Tcf) of recoverable tight gas resources. ENAP said this is twice as large as the cumulative gas production in the basin in 70 years of 4.2 Tcf.
Ryan Lance, CEO of ConocoPhillips, said “we are excited to bring our equipment, expertise and technology in this great project,” welcoming the work opportunity in southern Chile.
