Peru cuts royalties on oil discoveries

Peru said it had modified various contracts to lower royalties by 30 % on oil discoveries in a number of exploration blocks. Energy and Mines Minister Jaime Quijandria said that the government was hopeful the measure will help increase exploration and boost dwindling oil output in the Andean nation.
"This effort, plus an earlier reduction in the value-added tax, is very attractive from an economic point of view," Quijandria said.

Peru produced an average of 96,103 bpd of oil in September, for a monthly total of 2.88 mm barrels. For the first nine months of the year the daily average was 97,012 bpd or a total of 26.48 mm barrels. "Production remains in a slight decline from month to month...," Quijandria added.
Oil output reached 46.47 mm barrels in 1994 but has steadily declined to reach about 35.44 mm barrels in 2001. Peru is a net oil importer. Most of the nation's oil is produced in the northern jungle regions.