Uruguay`s Union Oil and Gas Group has been awarded the right to conduct exploratory work in the western province of Paysandu. The company received the decree signed by the nation`s president, Tabare Vazquez," Fernandez, adding that UOGG will become the first domestic company to carry out oil and gas prospecting in Uruguay.

The initial contract covers one year of onshore oil exploration, but if crude is found it could be extended by Uruguayan state oil company Ancap, which has a monopoly on oil refining and fuel distribution in the South American country. Studies by UOGG`s geologists indicate a high probability that oil will be discovered and that is why the company has decided to invest in Uruguay.

The company, which is partly foreign owned, will invest between $500,000 and $1 million in the initial stage of studies in that area. UOGG conducts activities in Bolivia, Paraguay, Peru and Uruguay and is planning to launch operations in Argentina and Colombia.