Peru promoting Camisea to new investors

Peru will form a high commission to organize and promote the development of the world-class Camisea natural gas fields, after a long-planned project backed by units of Royal Dutch/Shell and Mobil Corp. collapsed this summer.

Daniel Hokama, minister of energy and mines, outlined plans for Cami- sea's development to Peru's Congress late last month.

Hokama said the commission will begin roadshows in November in Houston and London to seek new investors for the project.

Meanwhile, state oil agency Perupetro SA officially opened its Camisea data room Sept. 1 with a 2-day visit from Elf Aquitaine SA, the first of 18 companies on the waiting list.

Commission's work

The Camisea project, which was given a $2.5 billion price tag in May 1996, when the government signed an appraisal contract with the Shell-Mobil combine, was suspended on July 15 after the combine, on completing the appraisal stage, failed to reach agreement with the government to develop the fields (OGJ, July 20, 1998, Newsletter).

The project's new cost was later calculated at $3 billion, although other estimates take the cost as high as $4 billion, claimed by Shell during final negotiations, when it said that Camisea is a marginal project.

Hokama said the government plans to tender a three-stage project for Camisea early in 1999. The three stages include the development of the fields' gas and condensate, construction of processing facilities and a pipeline from the central southern jungle to Peru's coast, and distribution of the gas.

First, however, the government will select consultants to develop a new project scheme and an investment bank to contact potential bidders and promote the contracts.

All these efforts will be carried out in coordination with the Camisea commission, for which members will soon be appointed. Hokama said that the government would make a final decision on the terms of the tender after meeting with international investors at the November roadshows.

The company or consortium that wins the tender to develop Camisea's production can also bid for the pipeline concession. A separate company, however, will handle the gas distribution end of the project.

The minister said several companies had sent letters expressing their interest, but he declined to disclose them. He said, however, that Shell and/or Mobil could still be interested. Hokama reiterated the government's goal that Camisea gas will reach Lima by 2003.

Data room

Companies on the list to visit the data room on Sept. 1, in order of the date of their requests, included Occidental Petroleum Corp., Mosbacher Energy Co., Coastal Corp., Tecpetrol SA, Pluspetrol SA, Perez Companc, ENI SpA, BHP Petroleum Pty. Ltd., ARCO, YPF SA, Marathon Oil Co., Pennzoil Corp., Phillips Petroleum Co., Mobil, Duke Energy Corp., Texaco Inc., and Total SA.

The information includes data from Shell's 1982-87 exploration campaign that led to the Camisea discoveries, when it shot 2,900 km of seismic and drilled four exploratory and two step-out wells before pulling out after failing to reach agreement with the government at that time. It also includes the 1996-98 evaluation stage completed by Shell Prospecting Development Peru BV (operator) and partner Mobil Exploration & Producing Peru.

Perupetro estimates the total cost of the two campaigns at $450 million.

The Shell-Mobil combine handed all its latest studies and technical data to Perupetro after it decided not to go ahead with the development of the Camisea natural gas fields (OGJ, July 27, 1998, p. 40).

Perupetro said that the companies' principal interest in the Camisea data is on coring and well pressure and production tests undertaken in the recent campaign, as well as the reservoir drainage scheme and the initial plan for the Camisea fields' development.

Meanwhile, Shell-Mobil is drilling ahead with the Pagoreni exploration well on Block 75, neighboring and on trend with the Camisea gas fields.

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