Sonatrach to purchase part of Pluspetrol's share in Camisea project

Peru has authorized Algerian state oil firm Sonatrach to operate in Peru, following its projected purchase of an additional 20% share in the Camisea natural gas and condensate project from Argentina's Pluspetrol.

Sept. 2, 2003

2 min read

By an OGJ correspondent

LIMA, Sept. 2 -- Peru has authorized Algerian state oil firm Sonatrach to operate in Peru, following its projected purchase of an additional 20% share in the Camisea natural gas and condensate project from Argentina's Pluspetrol.

The percentage being acquired is evenly split between upstream and downstream holdings. Until now, Pluspetrol has held 36% of the project's upstream portion and 19.2% of the downstream.

Jaime Quijandria, Peru's economic and finance minister, made the announcement Monday during a conference with the foreign press.

Quijandria said Sonatrach is a prestigous company as an exporter of LNG and natural gas. He added that Sonatrach's decision was to locate a company in Lima and ensure oil operations in other countries. This will be Sonatrach's first approach to Latin America with headquarters to be held in Peru, but seeking business with Ecuador, Colombia, Peru, and Venezuela, Quijandria said.

Peru LNG SRL, operated by Hunt Oil Co., has discussed possible business with Sonatrach.

Pluspetrol, more interested in selling the downstream than the upstream, reportedly needed the funds towards covering part of its costs in the project, which the company so far had mainly handled with its own capital.

Sonatrach has held 10% in each the downstream and upstream projects since the consortium was formed in December 2000.

The cost of the project was originally estimated at $1.6 billion. However, final expenditure could be in the order of $2 billion partly through stricter monitoring and additional environmental restrictions.

Meetings to assess a $75 million credit from the IDB and others from the Andean Development Fund, CAF, are scheduled for Sept. 9. The Export-Import Bank on Aug. 27 rejected a guarantee for loans for as much as $214 million for the Camisea natural gas project (OGJ Online, Aug. 28, 2003).