From 2009, when the first offshore bidding round took place in Uruguay, and in particular from the second bidding round that constituted a enormous step in the exploratory history of Uruguay, our country faces a new and nontraditional hydrocarbons upstream activity. Government take, including the National Oil Company association in the case of a discovery, is already fixed under the Production Sharing Contracts in force and do not vary much with the field size. Therefore, a possible strategy to maximize the local revenues (income from Uruguayan services, products and human resources), which constitutes a key part for a sound distribution of petroleum revenues within the country, would be to increase the local content in the supply chain.

Taking into consideration analogous geological basins, and the geological and technical probability of success for offshore Uruguay as a frontier basin, the field size and hydrocarbon potential was evaluated from a stochastic point of view. The cash flow analysis of a hypothetic oil development was carried out, incorporating the actual economic variables of the contracts in force offshore Uruguay, as well as the current fiscal regime. The standard project parameters, investments yardsticks and the government and contractor takes were calculated with the aim to obtain the Uruguayan rent and the relative impact of the local content.

This work constitutes the first approach to the analysis of expenditures and investment during the current stage of exploration, and the eventual phases of appraisal, development and production offshore Uruguay. The technical and economic evaluation applied to a portfolio of offshore prospects models the level of expenditures and investment from exploration to production.

The assessment of the potential impact of the activity on macroeconomic variables is carried out considering the local services and products that would be necessary for each stage, in order to identify the areas where increasing local content will provide the larger impact in the country economy.

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