MONTEVIDEO, Uruguay, April 4 (UPI) -- Paraguay and Uruguay are making independent bids for investors to take more interest in recent exploration that each hopes will yield commercially viable quantities of oil and natural gas.
Uruguay's state-run oil and gas company ANCAP said it hoped that recent discovery of subterranean rock formations could enable the country to become a producer of substantial quantities of shale oil or natural gas.
ANCAP President Raul Sendic cautioned against undue optimism. "It could be nothing or it could be the tip of the iceberg," he said, referring to the geological finds in the central region of Durazno.
He said the rock formations showed great quantities of organic material that likely held the key to substantial hydrocarbon deposits.
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Argentine, U.S. and Russian corporate interests are looking into prospects for the region but the Paraguayan government is also interested in attracting other potential investors and expanding its quest for inland oil and gas resources.
Uruguay is working on oil exploration operations offshore with a consortium that includes Brazil's Petrobras, Argentina's YPF and Portugal's Gal.
The Latin American country is a net importer of oil. While it awaits results of its hydrocarbons quest, Uruguay is struggling to reduce its oil and gas import bills, seeking alternative or renewable energy from biofuels and wind power.
Meanwhile, Paraguay's state-run Petropar oil company is sounding out potential foreign partners for further exploration in the country's Chaco region.
Officials said talks were under way on a concession for exploration in an area close to the Argentine province of Formosa.
Petropar President Juan Gonzalez Meyer said Paraguay needs to secure its energy supplies for a sustainable economic growth. "We are totally dependent on imported fuel and the world situation reminds us all the time about it," Meyer said.
He indicated that Paraguay would need to attract investors to put multimillion-dollar resources into the effort. Drilling a single exploratory well can cost up to $15 million, he said.
Paraguay recently was host to investors from Bahrain and Russia but no deal was reached.
"We would also like to see Brazil's Petrobras interested, since they have expertise and a long proven experience in South America," said Meyer.
Paraguay has pursued investors to help develop its energy sector but has seen international companies lose interest in its unproven deposits and move on to other regions with potentially greater prospects.
Landlocked Paraguay is also hindered by transportation difficulties. The country is bordered by Argentina to the south and southwest, Brazil to the east and northeast and Bolivia to the northwest.
Paraguay lies on both banks of the Paraguay River, which runs through the center of the country from north to south and hopes it may exploit its river transport resources, with help from neighbors, as part of any energy development program.
