Petroperu to upgrade Talara refinery

Eric Watkins
Senior Correspondent

LOS ANGELES, Jan. 28 -- Peru's state-owned Petroperu, in an effort to increase output by as much as 50%, announced plans to modernize its largest refinery this year. Bidding is to begin in March.

Upgrading northern Peru's Talara refinery, which is expected to cost $1 billion, will increase its oil production capacity to 90,000 b/d from 62,000 b/d, according to Petroperu Pres. Cesar Gutierrez.

Work on the renovation is expected to begin in June, said Gutierrez, who added that Brazil's state-run Petroleo Brasileiro SA will serve as a consultant on the project.

Gutierrez also announced plans to invest $8 million for two new oil pipeline segments in northern Peru that would transport an estimated 340 million bbl of heavy crude to the Pacific Coast from Block 67, near the border with Ecuador. The oil was discovered last December.

Gutierrez said Petroperu expects to award the contract for a feasibility study by the end of January.

The existing 250,000 b/d pipeline extends for 852 km, transporting crude from San Jose de Saramuro and Andoas in Loreto department to the Bayovar port on the Pacific Coast.

Gutierrez further announced that Petroperu will begin construction of an oil storage center capable of holding 8 million bbl, saying the $140 million project, expected to be completed in 2009, "would make Peru the principal oil-exporting port on the Pacific Ocean."

While optimistic about future developments, the Latin American nation's efforts to develop its oil and gas industry has seen some recent setbacks.

Earlier this month, Argentina's Pluspetrol announced the temporary closure of a well at Block 1AB, in northern Peru, as a result of protests Jan. 7 by a local indigenous group.

As of Jan. 10 some 3,000 b/d of oil had been shut in after about 80 protestors seized oil facilities.

Members of the Doce de Octubre community reportedly were protesting against what they regard as the company's failure to comply with previously reached agreements to invest in the area.

Block 1AB is the largest oil field in Peru, and produces some 24,000 b/d of crude, about 30% of national production.

Contact Eric Watkins at hippalus@yahoo.com.

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