Peru's oil production is rebounding as state owned Petroperu continues struggling to meet its financial obligations.
Occidental Petroleum Corp. boosted oil production on its northern jungle block to 58,000 b/d late last month after resuming field maintenance amid renewed negotiations with Petroperu.
Oxy's jungle production had fallen sharply twice in second half 1989 after it halted work on the block because of missed contract payments for delivered oil.
In exploration action, Petroperu signed risk exploration/development contracts with the oil arms of two Peruvian construction companies for small, formerly productive areas on the northern coast and in the Titicaca basin of the southern Andes.
In addition, Halliburton Geophysical is to start seismic and gravimetric surveys by the end of this month on Mobil Oil Exploration & Producing Peru's central jungle blocks.
Further, Petroperu is negotiating an exploration contract on three blocks of about 2.5 million acres each in part of the Block 8 area Petroperu released last year with Texas Crude Oil Inc., Houston.
PRODUCTION REBOUND
Oxy resumed field maintenance Jan. 1 when Petroperu restarted discussions on payment delays, foreign exchange rates, and price structures.
At the same time, Peru's government opened a $60 million line of credit to Petroperu to help it cover contractors' payments.
Petroperu paid Oxy $14.7 million in January, leaving a balance of $600,000.
Another $7 million to be paid Oxy for December oil production fell due Feb. 1.
Separately, Oxy claims $50 million under a provision calling for higher prices for incremental oil produced in excess of an agreed target volume during the past 4 years.
Oxy's Peruvian production fell to an average 29,800 b/d of oil last December, slicing the country's total flow for that month to 105,300 b/d. The company had halted work because Petroperu fell behind in contract payments (OGJ, Dec. 25, 1989, p. 39).
Oxy produced about 70,000 b/d in Peru during November, pushing total national output to 145,100 b/d. It also resorted to a similar work stoppage last October over a contract payment dispute (OGJ, Oct. 30, 1989, p. 31).
Peru's production last month was expected to average 119,000 b/d.
TITICACA PROGRAM
VG Exploracion-Produccion SA, a unit of Vera Gutierrez Contratistas Generales construction company, will spend $5 million on a 6 year exploration program covering 1.235 million acres in the Pirin field area of the Titicaca basin.
VG is to complete geological, geophysical, and geochemical studies and 1 00 line km of seismic surveys in the first 2 years. That will be followed by 200 line km of seismic and two wildcats in the second 2 years and two more wildcats in the third 2 year period.
A Spanish-Chilean group reportedly produced 400,000 bbl of crude from Pirin in the early 1900's. Preliminary studies by Petroperu several years ago put the area's recoverable resources at 100 million bbl of oil.
VG has committed to build a refinery and pipeline if Pirin drilling yields enough production to warrant the projects. Any early production will be barged across Lake Titicaca to Copacabana to offload into Bolivia's pipeline to Chile.
VG seeks agreements with service companies, especially drilling contractors, for work to be paid with crude production.
VG's contract calls for Petroperu to take 30% of production at first.
In addition, VG plans a geothermal power generation project in the region near the contract area.
NORTHERN COAST WORK
GMP, the oil arm of Grana y Montero SA construction company, will explore a contract area of 253,755 acres between Quebrada Mancora and La Cruz, north of Talara on the northern coast.
The area includes Zorritos oil field, abandoned by former state oil company Empresa Petrolera Fiscal in 1965 because of low production and high costs.
It also includes Carpitas field, operated until 1968 by Cia. Petrolera Amotape, a Peruvian company formed by U.S. investors. Amotape's contract was rescinded by the military government when it nationalized Peru's oil industry.
Plans call for GMP to spend as much as $10 million for exploration and development, depending on initial results. Initial spending of $2 million will cover a workover program in Carpitas, where it expects to start production by yearend.
In addition, GMP's exploration program will cover a year of aerial surveys, surface geology on about 250,000 acres, and an integrated geochemical study. During the next 3 years, GMP will drill two wildcats in the Zorritos area and two in the Carpitas area. It also will conduct a 300 line km seismic survey.
GMP also has a 2 year extension option during which it would drill a well to the Mogollon formation at 8,500 ft in Carpitas field.
CENTRAL JUNGLE WORK
Halliburton's work on Mobil's Huallaga basin Blocks 28, 29, and 30-with an option on Block 53-represents the start of work for the first contract awarded under petroleum law revisions of December 1987 (OGJ, Oct. 9, 1989, p. 32).
Halliburton has started clearing the jungle for seismic lines between Tarapoto and Barranca 85 km to the south on the Biabo River.
Mobil has committed to complete 1,600 line km of seismic surveys and 1,800 gravimetric stations in the first 2 years at a cost of as much as $1 million/month.
Sender Geophysical Ltd. of Canada on Jan. 17 completed the first stage of exploration, a 13,000 sq km aeromagnetic survey costing $350,000.
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