PETROPERU SEEKING BUYER FOR PRODUCTIVE OFFSHORE TRACT

Petroleos del Peru (Petroperu) is seeking a buyer for its Petromar offshore exploration and production unit. Peru's national oil company wants to sell Petromar acreage, production, and production installations on Block Z 2b for $200 million, payable at $10 million/year for 20 years, plus a share of future production. Petroperu proposes to close the bidding process Oct. 2, name a buyer by Oct. 19, and hand over Block Z-2b operations by January 1993.

Aug. 31, 1992

2 min read

Petroleos del Peru (Petroperu) is seeking a buyer for its Petromar offshore exploration and production unit.

Peru's national oil company wants to sell Petromar acreage, production, and production installations on Block Z 2b for $200 million, payable at $10 million/year for 20 years, plus a share of future production.

Petroperu proposes to close the bidding process Oct. 2, name a buyer by Oct. 19, and hand over Block Z-2b operations by January 1993.

Petromar Pres. Alberto Bruce Caceres said Petroperu is offering a full interest petroleum exploration and exploitation contract for 30 years for oil and as long as 40 years in the case of gas exploitation. The company seeking the smallest share of current and incremental future production to operate Block Z-2b will be awarded the acreage.

Petromar's sale is the latest announced under Peru's privatization program ordered by President Alberto Fujimori. Petroperu Pres. Jaime Quijandria Salmon said the country in the past 8 months has signed seven exploration contracts with private countries and expects to sign about another 15 by yearend.

WHAT'S FOR SALE

Petromar activity focuses on Block Z-2b in the Pacific Ocean off Northwest Peru. Belco Petroleum Corp. operated the 1 million acre block from 1959 until expropriated by Peru in 1985.

Petroperu estimates Block Z-2b reserves at about 100 million bbl of oil equivalent.

Petromar assets on Block Z-2b include:

426 producing wells, 414 suspended wells, 407 abandoned wells, 16 gas injection wells, and 14 water injection wells.
85 active platforms-43 in water less than 100 ft deep, 13 in 100-200 ft of water, 18 in 200-300 ft of water, and 11 in 300-400 ft of water.
57 gas compressors, 5 barges, and 19 boats.

The company is producing about 16,000 b/d of oil and 58 MMcfd of gas on Block Z-2b. Oil production by yearend is expected to increase to about 18,000 b/d.

Block Z-2b production has been declining since 1976 from a peak of about 30,000 b/d. When Peru took over Belco operations, Block Z-2b production was 28,000-29,000 b/d. Belco maintained production by drilling about 60 wells/year. Petromar drilled three wells on Block Z-2b in 1991. Block Z 2b cumulative production through July 1992 was 244.7 million bbl of oil and 570.8 bcf of gas from five fields.

Bruce estimated Peru's national oil production at 115,000 b/d.