Peru is one of the most underexplored high-potential countries in South America. Recent changes in both fiscal and operating conditions for petroleum exploration and development in Peru reflect the governmentís strong desire to attract foreign capital and expertise. Historically, uncertainties caused by expropriation and more recently, the high risk to personal safety combined to delay the development of highly prospective petroleum basins.
Peruís oil production is expected to rise from 126,300 BOPD in 1993 to 132,000 BOPD in 1994. Although these volumes are slightly higher than domestic consumption, Peru exports primarily lower-priced heavy oil, and imports higher-cost light crude and diesel, creating a net trade deficit in petroleum products.
Petroperu, the national oil company, estimated oil and condensate reserves at year-end 1993 at 400 MMBBLS. The United States Geological Survey estimated that undiscovered oil reserves are 4.2 billion barrels at the most likely level of occurrence. Gas production totaled 125 MMCF/D in 1992. Petroperu estimates remaining gas reserves are 7.04 TCF and the United States Geological Survey estimates that undiscovered gas reserves are 23.6 TCF. With the discovery of the Camisea Field, containing gas reserves of 16.6 TCF and 970 MMBBLS of condensate, it is highly probable the USGS estimates will prove to be too low.
Peru has eighteen sedimentary basins covering approximately 755,000 km2, approximately the same area covered by the sedimentary basins in Alberta. The hydrocarbon prospectivity of Peru is ranked as good to excellent within the producing basins and good within the non-producing basins. Excluding the producing Talara and Progresso basins, there have been 192 exploration wells drilled in Peru, or one well per 3,803 km2, compared to one well per 12 km2 in Alberta.
There are at least five areas of investment opportunity in Peruís upstream petroleum sector:
- Low risk exploration in proven basins -- Petroperu has relinquished large areas of land with excellent potential in the Maranon and Ucayali Basins. Most of Block 8 in the Maranon Basin, excluding presently producing fields such as Corrientes (135 MMBBL recoverable oil), has been relinquished. These areas include 25 leads and prospects mapped by the Robertson Group for Petroperu. Similarly, Blocks 31 and 35 in the northwest part of the Ucayali Basin have been made available to the private sector, and 14 undrilled structural prospects have been delineated on these lands.
- High risk exploration in proven basins -- Excellent potential remains for large reserves in deeper or more remote parts of the Maranon Basin, and in the southern Ucayali.
- High risk exploration in unproven basins -- Open acreage is available in lightly explored basins (e.g., Madre de Dios and Santiago basins), characterized by the presence of good source rock, reservoir potential and large surface anticlines. The Madre de Dios Basin is particularly interesting because all five wells drilled so far have encountered oil shows. Drilling by Mobil across the border in Bolivia recovered light oil on drillstem tests from what has been reported to be a 100 MMBBL discovery.
- Development opportunities -- Petroperu has been disposing of marginal fields in the Talara Basin to private companies in the recent past. Block VI is in the process of being transferred to one of four bidding groups and Block X will be privatized later in the year. This process of disposal of marginal properties may be extended to fields in the Maranon and Ucayali Basins later. A private company has been negotiating with Petroperu to participate in the development of the 50 MMBBL Chambira Field.
- Enhanced recovery -- Occidental/Bridas are operating a waterflood project for Petroperu in the Talara Basin and other such contract arrangements are likely to be available.
Although the fiscal regime in Peru is currently regarded as somewhat onerous, a wide range of opportunities other than grassroots exploration exist where deals are made on a case by case basis. If an area (e.g. Block 8 - Maranon Basin) where prospects have been identified could be acquired without paying for the exploration work already done, finding costs would be very low and the economics would be quite attractive.For more information contact:
Petrel Robertson Consulting Ltd.
500, 736- 8th Avenue S.W.
Phone: (403) 218-1618
Fax: (403) 262-9135
This summary, part of Petrel Robertsonís 1995 summary of exploration and development opportunities in 31 countries around the world, has not been updated. Some of the information, particularly relating to political and economic issues, is thus out of date. It is included, however, to demonstrate the breadth and depth of Petrelís work in each of these nations.