A constitutional government based on an open market economy, Peru has established a welcoming regime for foreign investors to stimulate the development of its early-stage hydrocarbon industry.
The country offers favourable five percent royalty rates and competitive tax rates at 30 percent, while its attractive exploration and regulatory system gives maximum flexibility to operators.
As in Colombia, license contracts include similar levels of exploration commitments, but are defined in terms of exploration work units. This means an operator can make adjustments to its operational activities – for example, from drilling to seismic – without having to obtain regulatory approval.
Peru’s six producing hydrocarbon basins cover about 370,000 km2, and the country is currently producing about 130,000 bopd. Petrominerales plans to drill our first exploratory well in Peru during the first quarter of 2011.
UCAYALI BASIN
Only about 50 wells have been drilled to date in the Basin, but they have collectively produced more than 50 million barrels of oil equivalent from three oil fields since the 1930s. The largest has been the world class, giant Camisea gas and condensate complex, discovered in the southern portion of the Basin in the late 1980s.
While the region has seen little drilling to date, the Ucayali presents a similar tectonic history to the western Canadian sedimentary basin, with multiple opportunities to trap hydrocarbons. Because of the technical experience and skills sets of our exploration team, Petrominerales can draw on proven Canadian knowledge and technical ability to exploit these opportunities. Petrominerales operates and has an 80 percent working interest in Block 126, a 2.6 million-acre parcel that features existing infrastructure including a road, airstrip and pier. The existing La Colpa well tested oil in the late 1980’s by a previous land owner who abandoned the Block due to civil conflict at the time. We have acquired and are interpreting 150 square kilometres of new 3D seismic, we expect to start drilling our first exploration well by the end of the second quarter of 2011.
PANANDEAN ACQUISITION
In April 2010, Petrominerales completed the acquisition of PanAndean Resources plc for approximately US$29 million bringing 6.8 million gross acres (3.9 million net acres) in Peru and a 100 percent working interest in the Antorcha Block in the Middle Magdalena Basin of Colombia. The acquisition of this acreage will give Petrominerales a strategically significant land position in this highly underexplored basin. Petrominerales’ additional Peruvian assets are:
Block 114, Ucayali Basin, Peru.
30 percent working interest in 1.8 million acres, contiguous with Block 126. In 2010, seismic will be acquired; the first well on the block is expected to be drilled in late 2011 or early 2012. Our partners will pay Petrominerales’ share of initial seismic work, the first exploration well, and 50 percent of our costs for the second exploration well.
Block 131, Ucayali Basin, Peru.
30 percent working interest covers 2.4 million acres near Block 126. Again, in 2010, seismic acquisition is planned, and the first well drilled potentially in late 2011 or early 2012. Our partners will pay Petrominerales’ share of initial seismic work, the first exploration well and 50 percent of our costs for the second exploration well.
Block 161, Ucayali Basin, Peru.
80 percent working interest in 1.2 million acres northwest of Block 126. Commitments include a geological and geophysical report from the evaluation of existing data and reprocessing of 2D seismic by June 2012.
Block 141, Titicaca Basin, Peru.
80 percent working interest in 1.3 million acres in southern Peru. Commitments include a geological and geophysical report plus the acquisition of 350 km of 2D seismic by May 2011.
