South America: Peru

SOUTH AMERICA

Stuart Wilkinson, Contributing Editor

Peru

President Alberto Fujimori decided against selling state-owned refineries and other assets prior to the presidential election that he later won. Privatization in 1999 gave the government $350 million – compared to the $800 million that had been planned. GDP growth is expected to reach 6.5% this year.

Exploration. Oil companies cut spending on E&P by $160 million in 1999, a drop of 10% from 1998. Pluspetrol approved a $30-million investment in its 8/8X fields in the Maranon basin. Occidental, however, cut its exploration budget to $4 million in the same basin. Chevron pulled out of Block 52 in the Ucayali basin, Repsol cancelled negotiations for offshore Block Z-4 and Phillips P&A’d an exploratory well in Block 82.

The government failed to get E&P contracts signed this year after canceling a planned 15-block, offshore bidding round. Denver-based Barrett Resources was the only company to make a significant find in recent years. It signed an exploration contract with Petroperu in September to explore Block 39 in the Maranon basin.

Drilling/development. Wells drilled plummeted 65% last year, although offshore wells remained steady at five. This year, 35 onshore and 10 offshore wells are planned.

In February, Hunt Oil and partners, Pluspetrol (40%) and SK Corp. of South Korea (20%), won the Camisea project tender, pledging royalties of 37.2% on liquids and gas during the 40-year concession. The consortium planned to invest $400 million and drill four wells in the Ucayali basin gas fields by 2003. The Camisea project aims to invest $1.6 billion and drill 25 wells.

Production. In 1999, crude and condensate production stood at 105,927 bpd, down 8.4% from the previous year’s 115,593 bpd. In December, average output was 100,038 bopd, down 11.3% from the same period in 1998. By January 2000, production was 98,845 bopd, a fall of 10.9% compared to the same month in 1999. New finds have failed to compensate for lower production in aging fields.