ENARSA and Lukoil sign MOU for investment of US$ 500 million - Argentina

This article is extracted from International Oil Letter, Vol 24 issue 52, published 22 December 2008.

Lukoil has signed a Memorandum of Understanding (MOU) with ENARSA calling for the investment of roughly US$ 500 million in Argentina, according to the local press. The agreement, which was the result of Argentine President Christina Fernandez's state visit to Russia, is for a three-year term, with the possibility for extension. Lukoil will begin with a US$ 15 million investment in a fuel storage facility to be linked by pipeline to the new 830MW Manuel Belgrano electrical generating plant. Lukoil also intends to supply heating oil or diesel fuel to Argentina.

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Another potentially more significant part of the MOU involves ENARSA issuing an invitation to Lukoil to conduct oil and gas exploration in Argentina, particularly in the company’s extensive inventory of offshore acreage that is largely unexplored. ENARSA’s first bid round for nine offshore blocks closed on 10 December, with no bids received.  Press reports indicate Total could also be interested in partnering with Enarsa, while Petrobras is teaming up with Repsol-YPF to explore offshore Argentina (see below). Lukoil is already active in Venezuela and Colombia.

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