Peru's Camisea tender process to continue

Peru's Camisea committee will continue to sell bid documents for the development of the Camisea natural gas fields until Aug. 6, 1999, and for the related gas transportation and distribution concession until July 22, according to a spokesman for the committee.

Originally, the development and transportation-distribution projects were proposed as a single, integrated $3 billion project, but negotiations between the government and the original proposed Camisea developers, Royal Dutch/Shell and Mobil Corp., collapsed last year, and the two companies withdrew from the project. That was followed by a new tender process that began last summer (OGJ, July 27, 1998, p. 40).

The government committee called the tenders on May 31 and put documents on sale as of June 4 (OGJ, May 24, 1999, Newsletter). Companies must pay $15,000 for bid documents for the gas field contract and/or the same amount for the transportation and distribution tender.

Companies will present their first envelopes on Sept. 23, 1999, for transportation and distribution and Nov. 18, 1999, for the gas fields development. The second envelopes, with financial offers, will be presented and the winners announced on Sept. 29 for transportation and distribution and on Nov. 24 for the gas fields development, at least under the current timetable.

Gustavo Caillaux, head of the government's privatization commission, said that members of the Camisea committee were to travel to Europe last week and to the U.S. and Canada this week to discuss the terms of the contract with interested companies.

Prospective bidders

The seven companies that bought documents on the first day, according to the committee, included Elf Petroleum Peru, Total, and Argentina's Tecpetrol, all of which bought bid documents for the 40-year contract to exploit the natural gas fields.

Duke Energy International, Esso Exploration & Production Peru, Argentina's Pluspetrol SA, and Mitsubishi Corp. bought bid documents for both the field development-production contract and the transportation and distribution concession, a committee member said.

Luz del Sur, a privatized Peruvian company that distributes electricity to southern Lima, and Colombia's Promigas SA bought documents for the transportation and distribution concession. Also purchasing documents for the transportation and distribution concession were Enron International and Argentina's Techint International.

The company or group operating the gas fields may hold up to a 20% stake in the transportation and distribution concessions but cannot be the operator of these.

Jorge Chamot, who heads the Camisea committee, said on June 8 that up to 12 companies had bought bid documents for the gas fields and another 12 for the transportation and distribution concessions, although he did not supply names. Neither Shell, which discovered the Camisea fields, nor Mobil, which became Shell's partner in the evaluation stage, have bought documents as of presstime-although industry sources in Lima say they may be waiting for a complete set of documents to become available. Other oil executives also commented on what they considered "excessive controls" on the project instead of a free market.

Elf and Esso are Mobil's partners in an ongoing exploration campaign in Peru's Madre de Dios basin, where their first exploration well showed indications of further gas reserves. The Camisea fields hold 11 tcf of proven natural reserves and an estimated 600 million bbl of condensate. Separately, Shell-Mobil subsequently discovered an estimated 3.5 tcf of gas in a neighboring field on Block 75.

Market outlook

Chamot, who made his statements during a presentation to the congressional energy committee, admitted that the Camisea committee is still negotiating take-or-pay electricity contracts with companies that are potential users of the Camisea gas. However, he added that, although many technical and commercial aspects for the concessions are missing, these would be ready when they are needed.

On the positive side, Chamot noted that gas produced from the Camisea fields could be exported as soon as production starts, provided the local market is covered. The government's refusal to discuss gas exports before production began was one of the sticking points in efforts to reach an earlier agreement with Shell-Mobil. The companies withdrew from the Camisea project at the end of a 2-year evaluation stage in May 1998.

Meanwhile, in another positive note for gas-fired power in Peru, that country's congress extended for another year, effective June 9, a ban on granting concessions for the construction of new hydroelectric plants. Energy and Mines Minister Daniel Hokama said, however, that this did not apply to concessions for four or five hydropower plants that are already being processed.