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Planned licensing round builds on area successes.
Peru oil and gas production raised US $2.05 billion in 2007, up from $1.76 billion in 2006 and $1.52 billion the year before that, and the country plans to raise those production revenues with its planned 2008 licensing round, according to Daniel Saba de Andrea, chairman of the board of Perupetro, the state oil company.
Currently, the nation produces about 120,000 b/d of oil and 255 MMcf/d of gas. Most of the gas comes from the giant Camisea field complex.
Peru has production from the Talara, Tumbes, Marañon and Ucayali basins and previous production from a field in the Titicaca Basin.
The nation hasn’t yet announced blocks available for licensing, but it will try to entice operators to the basins with proven pay potential.
Offering the point of view of companies already working in Peru, Pablo Eisner with Repsol YPF said his country has six exploration blocks and two production blocks. Part of that production comes from Camisea field in Block 56.
It is involved in the heavy oil play in the Marañon Basin with Burlington Resources (now part of ConocoPhillips, and Perenco. They companies are acquiring 2-D seismic and have drilled three successful wells, the Buena Vista, Delfin and Raya discoveries.
It shares Block 57 in the Ucayali Basin with Petrobras. That block is on trend with Camisea field. Its Kinteroni-1x on the block found 2 Tcf of gas in the Lower Nia.
Most of the Marañon Basin already is leased, but some land is under study for the licensing round from the heavy oil belt in the northeast to the lighter oil region in the west, according to Justo Fernandez, senior geologist with Perupetro.
In the heavy oil zone, Perenco recently acquired Barrett Resources (Peru) LLC, which holds Block 67 with three fields containing reserves of 300 million bbl of oil. Barrett estimated 1.9 billion bbl on oil in place in the block.
In the west, Situche Central field produces 2,400 b/d of 34º gravity oil from the Vivian formation at 4,600 ft (1,403 m). In the southwest, the Tanguintza 1x gas discovery tested at 6.3 MMcf/d of gas and 478 b/d of condensate.
The first well in Pirin field in the Titicaca Basin led to a field that produced 300,000 bbl oil in the early 1990s from wells west of the north end of Lake Titicaca. The area is underexplored, Fernandez said, and the exploration costs are lower than in the sub-Andean basins.
Fernandez said he believed pay from the nation’s offshore basins could be extended farther south. The Lima Basin has two leads but the latest drilling was conducted in shallow water in 1986. The North Pisco Basin has 18 leads in plays that extend into the South Pisco Basin, but the only well is the Pisco 4x onshore.
Peru is “open for business with highly prospective geology,” said Pier Gormly with ION Geophysical subsidiary GXT. The company teamed up with Perupetro to develop PeruSPAN survey covering the shelf to deepwater in sediments from shallow to basement. It will include prestack depth migration, gravity and magnetic information, interpretations and reports.
According to presentations during a meeting in Houston, local communities favor the jobs and advantages offered by oil and gas development, but some organizations of Peruvian citizens who live in the Amazon oppose the development.
Ronald Egusquiza with Perupetro said the nation’s gross domestic product will grow at a 7% annual rate from 2006 through 2010, and it needs energy to support that growth. Currently, Peru was 27 active contracts, 12 exploration contracts and 15 production contracts. It also has a lower country risk than the Latin American average.
A 2003 petroleum law improved the availability of technical information (much of it free), enhanced economic incentives, shortened the contract negotiation period and ordered new basin studies.
Operators in the country will pay a minimum 5% royalty rate, based on production levels or economic results and a company may choose the option at the time it declares a discovery commercial.
Work programs are flexible, and an oil company can decide its work program, he said. On an exploration contract, the first period normally covers geological studies, the second includes seismic and the third 3-D seismic. A company may void the contract before any new period.
International arbitration is written into the contract.
More information is available at www.perupetro.com.pe.