By an OGJ correspondent
LIMA, June 3 -- China National Petroleum Corp. subsidiary , Sapet Development Corp., which produced 3,012 b/d of oil off Peru's north coast during January-April and 1.35 MMcfd of associated natural gas, plans to invest at least $11 million in 3 year program to expand production from Talara's north coast Blocks VII/VI. Perupetro SA, Peru's state oil agency, will sign the agreement shortly.
The project includes reconditioning existing wells and resuming the drilling of new wells. In addition, Sapet will develop two water injection pilot projects, also aimed at increasing current oil production.
The new oil production will benefit Sapet with lower royalty payments.
Sapet reportedly pays 40% royalties on existing production. Recent legislation allows lower royalties of 15% for new oil production and 5-10% for development of exploration activities in deep waters in the continental shelf.
Sapet will continue to pay its current royalties on existing production, but the lower royalties for new production would reduce its overall cost.
