Uruguay has become one of the first countries to change the terms under which it hopes to attract companies to search for oil in the sediment beneath its waters. So far countries have been reluctant to accept that the tables have turned as the oil price has collapsed. Algeria stuck to its terms, and thus generated less interest than in the past for its round in December. Venezuela is dangling Orinoco contracts in front of companies, but behind the scenes is as ruthless as ever, oil executives say.
One exception is Iraq, which has modified its terms. But it is a special case because there is so much else for oil companies to worry about, including the safety of their staff and infrastructure amid the violence, and the sanctity of any contract they sign given the lack of an oil law.
So Uruguay – better known for beef than oil – is somewhat of a trailblazer. But it’s a trail some analysts expect to become well trodden if the quick rebound the industry hopes for fails to materialise.