Peru’s oil and gas output expected to triple in next 5 years

Jun 17, 2010 02:00 AM

Peru currently produces 160,000 bpd of liquid hydrocarbons, a figure that will more than triple in five years to 500,000 barrels, according to the president of state-owned Perupetro, which negotiates and supervises all of the country's oil and natural gas contracts.
Daniel Saba said that Peru plans to invest $ 9 bn over the next five years "not counting new deposits," and he estimated that daily production will double in two years only taking into account fields already discovered.

After the state company opened international bidding for 24 blocks with gas and oil potential on May 14, Saba said that a road show was launched to present the geological information and potential of the blocks to companies in countries such as Australia, the United States, England, France, Canada and Colombia.
An earlier bid process was suspended last year over the release in late 2008 of a series of taped telephone conversations in which a government official and a board member of Perupetro discussed plans to favour Norwegian firm Discover Petroleum.

Discover, which partnered with state oil company PetroPeru in the auction, was awarded several exploratory blocks before the process was suspended. Saba was never implicated in any wrongdoing.
According to Saba, Peru's basic energy indicators have improved and make its blocks more appealing to companies despite the difficulties, referring to a slow exploration process and the need for previous geophysical work because no information is available on the areas being auctioned off, many of them virgin territories.

He added that the size of the blocks -- roughly 500,000 hectares (1.2 mm acres) -- is currently quite large so that the companies can choose the territories that interest them, although those surface areas will gradually be reduced.
A new requirement specifies that a company that wishes to participate must have drilled a well before, Saba said, adding that royalties have increased and that 90 exploration and export contracts are on offer.

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