Pluspetrol to hike oil production from Peruvian block

By an OGJ Online Correspondent

LIMA, June 6 -- Under a new development contract, Pluspetrol Peru Corp. of Argentina plans to hike oil production from Peruvian Block 1-AB by 25% over 3 years.

The block is now producing 38,000 b/d. Pluspetrol plans to drill 14 new development wells and rework 30 wells over the 3-year period.

Under a new agreement with Perupetro, the state oil agency, Pluspetrol will market oil production from the block and pay royalties, rather than deliver the oil to the agency in exchange for a fee.

Pluspetrol will pay royalties ranging between 8-20%, increasing progressively, on the new oil production. Production from existing wells pays 35% royalties.

Perupetro has also extended the contract to 2015; previously, it was set to expire in 2006.

Pluspetrol has been seeking new terms since it acquired the block from Occidental Petroleum Corp. of the US last year.

The company also plans by the end of June to build a 120-km, $15 million pipeline.