Perez Companc expands Peru search

Argentina's Perez Companc del Peru SA has expanded its Peruvian north coast operations by 43,358 hectares with the signing of an exploration and production license for Block XVI with Perupetro SA, the state oil regulatory company. Since 1996, Perez Companc has been operating Petroperu's former oil fields in adjacent Block X in the century-old Talara fields, where production averages 15,000 b/d. And earlier this year, the firm signed a contract with Perupetro to explore offshore Block

June 22, 1998

2 min read

Since 1996, Perez Companc has been operating Petroperu's former oil fields in adjacent Block X in the century-old Talara fields, where production averages 15,000 b/d. And earlier this year, the firm signed a contract with Perupetro to explore offshore Block Z-1.

For its latest block, Perez Companc has committed to acquire and interpret 200 km of 2D seismic data and drill five exploration wells during the 7-year license term.

Perupetro estimates the minimum cost of the program at $6 million.

When Block XVI starts producing, Perez Companc will pay royalties ranging from 23.4% to 51.4%, according to the volume and value of the crude oil produced. Royalties will be 23.4-39.3% if it produces gas and condensates.

The company will expand its activities to include jungle exploration in Ucayali basin Block 34 later this year, once the relevant ministries give final approval to the contract it won in private bidding in April of this year.

Other licenses

Perupetro expects to sign a total of 15 oil and gas exploration and production contracts by the end of the year. The regulatory company is currently negotiating licenses with Spain's Repsol SA for offshore Block Z-4 and northern jungle Block 37, and with Denver's Barrett Resources Corp. for northern jungle Block 39 and central jungle Blocks 40 and 41.

Other companies involved in negotiations include Pan Energy Resources Inc. of Honolulu and Peruvian firm GMP SA.

Peru has 16 active production contracts (producing an average 113,800 b/d as of April) and 29 exploration contracts.

Perupetro estimates the involved companies will invest $4.2 billion, including the $2.5 billion projected for development of the Camisea natural gas project. Total investments, however, will depend on all the companies undertaking their full exploration programs. Companies may withdraw without penalty once they have completed the first exploration stage.

In addition, a final decision on developing Camisea by Royal Dutch/Shell and Mobil Corp. is still pending (OGJ, Apr. 6, 1998, p. 40). Perupetro has given the Shell-Mobil consortium a July 16 deadline to make a decision on whether it will go ahead with the project.