BMI View: While the Peruvian government is trying to garner investor interest in the country's upstream potential, we believe that lack of below-ground prospectivity, a history of strong environmental opposition and a highly competitive regional market will be the key factors diminishing the attractiveness of the country's oil and gas industry over the coming years.
|Crude, NGPL & other liquids prod, 000b/d||170.5||175.6||178.9||183.1||187.4||191.8||195.8|
|Refined products production & ethanol, 000b/d||200.0||202.0||203.0||203.0||203.0||213.1||221.7|
|Dry natural gas production, bcm||12.3||12.8||13.3||13.9||14.5||15.0||15.6|
|Dry natural gas consumption, bcm||12.4||13.2||14.0||14.8||15.7||16.6||17.5|
The main developments in the Peruvian oil and gas sector:
In April 2015, Peru launched bidding for rights to develop the country's largest oil block 1-AB located in the Amazon after several months of negotiations with indigenous groups over pollution. The oil block has been operated by Argentine energy company Pluspetrol since 2001, but its contract ends in August 2015. The winning bid will combine the most favourable financial incentives and the largest number of planned exploratory and development wells. The winning bid will be announced on July 15 2015.
In April 2015, US-based oil and gas firm BPZ Energy failed to encounter commercial volumes of oil at its Albacora A-22D well on block Z-1 offshore Peru. The well was drilled to a measured depth of 4,184.9 metres. The well tested water with no oil shows from the three targeted zones, which are productive in the main part of the field.
State-owned Petroleos del Peru ( PetroPeru) has shelved plans to sell shares on the local stock market in 2015, reports Reuters, citing company President German Velasquez. In November 2014, the national oil company (NOC) announced plans to sell up to a 49% stake to private investors during Q215. Velasquez stated that the share offering would be considered when the company is 'sufficiently attractive'.
In February 2015, Argentine oil company Pluspetrol announced its withdrawal from Block 108, near the municipality of Pichanaki in Peru's Amazonian region of Junin, where it had started exploratory activities for gas deposits in 2014. According to the BBC, the company had been asked by the government to leave the area after a demonstrator in Junin province was killed during four days of violent protests by demonstrators that accused Pluspetrol of contaminating local rivers and soil. However, a company spokesperson denied this claim and stated that Pluspetrol had completed its work in the area.
In December 2014, Perupetro announced the launch of the new international bidding round, which offers seven blocks for production and exploration licence contracts: Block 164 and Block 199 in Maranon basin; Block 169, Block 175, Block 189 and Block 195 in Ucayali basin; Block 187 in Madre de Dios basin.
In early November 2014, Brazilian national oil company (NOC) Petrobras completed the sale of Petrobras Energia Peru (PEP) to the Chinese NOC China National Petroleum Corporation (CNPC) for the sum of USD2.6bn. This transaction supports China's growing interest in Peru, having signed a joint memorandum of cooperation at the APEC summit on November 12 to expand exploration and development efforts in the Andean country .
The presence of Peru's Shining Path rebels in the Camisea gas fields in the Ucayali basin has affected expansion work on the country's main natural gas pipeline, resulting in a delay in its scheduled completion to Q116. The pipeline expansion was 55% complete in the second half of October 2014 and is expected to cost about USD475mn in total, according to the general manager of Transportadora de Gas del Peru (TDP).