The basins of interest stretch from the Pelotas of southern Brazil and Uruguay, through Punta del Este and into North Argentina. Historically, this region has seen limited exploration, with relatively few wells drilled across its expansive area of over 500,000 square kilometres. Nonetheless, several international companies, including supermajors, have now secured acreage positions. With work programme commitments estimated to exceed $500 million, significant activity is expected in the coming years.
The geology of the region has gained attention due to recent discoveries offshore Namibia in Apto-Albian basin floor fans and Upper Cretaceous turbidites, charged by a Lower Cretaceous Aptian source rock. While differences exist between the Namibian and South American passive margins, such as a noticeably thicker Tertiary section on the South American side, the same Aptian-aged source interval present in Namibia’s Orange Basin can be seismically correlated to South America. With Cenomanian-Turonian source rocks also potentially developed and mature, and seismic identification of reservoirs similar to those in the Venus and Graff discoveries, recent interest in the region is unsurprising.
In December 2023, 44 blocks in the Pelotas Basin, southern Brazil, were awarded in the 4th Cycle of Permanent Offers. Companies such as Petrobras, Shell, CNOOC, and Chevron received awards, with signature bonuses surpassing $60 million and work programme commitments approaching $400 million, indicating substantial upcoming activity.
In Uruguay, all available offshore acreage has now been licensed. Shell, Apache, and YPF entered the country in 2022, and Challenger Energy most recently confirmed the award of the final licence, OFF-3, in 2024. Work commitments over the next three to four years include acquiring 2,500 square kilometres of 3D seismic in Area OFF-4 (Apache/Shell) and drilling an exploration well in Area OFF-6 (Apache). Chevron has also returned to offshore Uruguay after about 50 years, with a farm-in deal with Challenger on Block OFF-1 announced in March 2024. Under this agreement, Chevron will fund 3D seismic acquisition in 2024/25, intending to drill a well in 2027. Charlestown Capital, heavily invested in Sintana Energy’s Namibian campaigns, has made a significant investment in Challenger Energy, further indicating potential ties to Namibian success.
Further south in the North Argentinian Basin, Argentina, acreage holders include Equinor, YPF, Shell, TotalEnergies, and BP. Equinor and YPF are acquiring 3D seismic on Blocks CAN-102, CAN-108, and CAN-114 in 2024, with Shell and TotalEnergies also likely to acquire new seismic over their blocks this year. Argentina’s first deepwater well, Equinor-operated Argerich-1 in Block CAN-100, has commenced drilling, targeting Cretaceous-aged reservoirs. This initial test of the conjugate margin will be closely monitored by operators and acreage holders on both sides of the Atlantic.
The South Brazil-Uruguay-North Argentina conjugate margin to the Namibian offshore basins has quickly become a South American exploration hotspot. With supermajors holding extensive acreage positions, extensive 3D seismic acquisition on the horizon, and at least three wells planned for drilling by 2027, this region is poised for significant developments and may soon witness a major basin-opening discovery with global impact.
Challenger Energy Group plc (LON:CEG) is a Caribbean and Atlantic margin focused oil and gas company, with a range of petroleum assets located onshore in Trinidad and Tobago, and Suriname, and offshore in the waters of The Bahamas and Uruguay.
