CHINA FIRM INKS CONTRACT IN PERU

China's state oil company continues to expand its participation in foreign upstream projects with the country's first oil investment in Latin America. Sapet Development Corp., a subsidiary of China National Petroleum Corp. (CNPC), signed an oil and gas production contract with Peru's state oil company Petroleos del Peru covering Block VII alone Peru's northern coast. Sapet is committed to invest at least $25 million during the next 5 years. Work includes drilling 60 wells in

Nov. 8, 1993

2 min read

China's state oil company continues to expand its participation in foreign upstream projects with the country's first oil investment in Latin America.

Sapet Development Corp., a subsidiary of China National Petroleum Corp. (CNPC), signed an oil and gas production contract with Peru's state oil company Petroleos del Peru covering Block VII alone Peru's northern coast. Sapet is committed to invest at least $25 million during the next 5 years.

Work includes drilling 60 wells in the first 3 years and start-up of secondary recovery operations in the first half of the third year.

The 45,466 acre Block VII includes some of Peru's oldest oil fields, including part of the former International Petroleum Corp. concession of La Brea y Parinas.

Production from the block averages 920 b/d of crude, 508 b/d of water, and 681 Mcfd of gas.

Production comes from 257 wells out of 3,312 wells drilled in the area since 1896.

The contract is the seventh Petroperu has signed the past 2 years in a program designed to boost oil and gas production by transferring operation of marginal oil and gas fields to the private sector.

CNPC recently began a campaign of seeking equity interests in oil projects around the world to broaden its sources of crude supply because China is expected to be a net importer of oil before 2000 (OGJ, Oct. 11, p. 21).