By an OGJ correspondent
LIMA, June 17 -- Peru's state oil company Perupetro has signed a 3-year contract with China's Sapet to reactivate oil fields in its north coast Block VII/VI at an estimated cost of $11 million. The contract was signed in Lima Monday after recent negotiations and new royalties.
Oil production from new wells above current production and the reconditioning of existing wells will give Sapet royalties as low as 5% compared with around 40% it will continue to pay on existing production.
The project includes resuming the drilling of new wells and the reconditioning of existing wells. Sapet will also implement two water injection pilot projects aimed at increasing current oil production.
Sapet will continue to pay its current royalties on existing production, but lower royalties for new oil will reduce its overall costs.
Sapet's oil production for the first 5 months of 2003 was 3,026 b/d.