Privatization, E&D action heating in Peru

Fig. 1 (explaining Location, Areal extent, and Structure) [135225 bytes]

Privatization efforts and exploration/ development activity are picking up speed in Peru.

Petroperu SA's privatization committee was scheduled to begin selling bid documents for Petroperu's production license contract in jungle Blocks 8 and 8X and a 60% interest in the La Pampilla refinery near Lima.

The simultaneous auctions are scheduled for the end of May, although the committee has not chosen a date. Buyers may bid for the oil fields and the refinery as one unit or separately.

Meanwhile, the committee postponed the date for the sale of Petrolube SA, Petroperu's lubricants business, to about the third week of June from the earlier scheduled Mar. 27.

E&D roundup

A flurry of activity has marked Peru's exploration and development sector in recent weeks:

Six international oil companies and three local firms bought bid documents from Perupetro SA for an exploration and development license covering northern coast Block 12.
Mobil Oil Corp. signed with Perupetro for exploration and development licenses for Blocks 77 and 78 in the Las Piedras and Tambopata areas, respectively, of Peru's Madre de Dios basin.
In the Ucayali basin, Perupetro, instead of calling a second tender, is negotiating licenses for blocks that failed to attract bids last year. Alberto Bruce, Perupetro chairman, said the company is negotiating on two blocks with Houston's Quintana Minerals Corp., operator of northern jungle Block 50; and two with Phillips Petroleum Co., which explored the northern jungle in the 1970s.

Industry officials say terms are stiff for this high risk area, where there has been no exploration. Companies are expected to complete geological and seismic studies and drill one wildcat/year for 5 years, although they can withdraw after one or more wells.

Perupetro reached an agreement with Olympic Oil Co., Houston, which has been negotiating a licensing contract in association with Clayton Williams Co., Houston, for Block 13 covering the northern coast of San Juan fields. The contract is awaiting government approval.
Cia. de Minas Buenaventura SA, Lima, a mining company, is negotiating a contract with Perupetro for Block 85, a small area adjacent to the operations of Maple Gas Co., Dallas, and Block 79, awarded in last year's bid to Pluspetrol SA, Buenos Aires, in association with Korea Petroleum Development Corp. and Yukong Ltd., both of Seoul.
Repsol SA, Madrid, operator and 65% partner with Ampolex Ltd., North Sydney, Australia, in Peru's offshore Block Z-29, let contract to Digicon Geophysical Corp., Houston, for a 4,000 km seismic survey. The partners signed an exploration and development license for the block in the Trujillo basin off Peru's northern coast Mar. 22, 1995. The Arcadian Commander seismic vessel arrived at the port of Salaverry Feb. 24. Repsol estimated the seismic survey will take 40-50 days to complete and plans to drill its first wildcat next year.

Petrolube postponement

The committee postponed Petro-lube's sale at the request of potential bidders.

Industry sources said Venezuela's Maraven SA and Chevron Corp. had made the request. Other companies that bought bid documents include Mobil Corp., YPF SA, Pennzoil Co., and Shell del Peru.

A company consultant said the postponement reflects the aggressive timetable Petroperu's committee has drawn up for the company's privatization. Although most potential buyers had bought bid documents 2 years ago, they were given a tight schedule once Petroperu reactivated the privatization process.

Companies interested in Petrolube also had to wait until recently to update 1995 figures in Petroperu's data room.

Block 12

North Coast Block 12, in the Lancones basin, neighbors the century old Talara oil fields on the other side of the Amotape hills.

The company offering to pay the highest royalty upon determination of commerciality will win the bid. The tender will be awarded at the end of April.

Most of the companies that bought bid documents for Block 12 are operating on the northern coast. They include:

Occidental Petroleum Corp., long time operator of the soon to expire Oxy-Bridas secondary recovery project.
Petrotech International Corp. of Delaware, operating offshore Block Z-2B.
Repsol SA, exploring offshore Block Z-27.
Sapet Development Co., a subsidiary of China National Oil Co., operating Blocks VI and VII.
Local companies GMP SA, Petrolera Rio Bravo SA, and Unipetro ABC, each operating small north coast fields.

Other bidders include:

Enterprise Oil Exploration Ltd., London, a partner in northern jungle Block 65M with Great Western Resources and in Block 50 with YPF and Quintana.
Pluspetrol, operator of exploration and development contracts in northern jungle Block 54 and Block 79 in the Central Ucayali basin.

Mobil blocks

Mobil negotiated for Blocks 77 (Las Piedras) and 78 (Tambopata) for more than a year.

Mobil Exploration & Producing Peru Inc. 33.4% will operate the blocks in partnership with Elf Petroleum BV and Esso Exploration & Production Peru Ltd. 33% each.

Mobil earlier completed a 2 year technical assessment of a 22 million acre area of the Madre de Dios basin, including a seismic survey in the Las Piedras area in late 1994. Mobil also completed environmental impact studies of both blocks.

Mobil also is a partner with Royal Dutch/Shell Group in parallel talks under way with Perupetro for an exploration and development license in Block 75 and a development contract in neighboring Camisea natural gas/condensate fields.

The Camisea talks were to be completed in February but apparently were extended again (OGJ, Feb. 5, p. 44).