How Peru aims to nearly double crude output in the coming years

Oil production in Peru has been trending upward, even nearing pre-pandemic levels but still below historical highs.

Output in July averaged 42,177b/d, up 14% year-on-year and the fourth consecutive increase for the seventh month after falling from 43,917b/d in July 2019.

Investment by operators has helped sustain production, and although exploration spend has remained flat, this could change with renewed impetus by the government to promote the sector and address structural shortfalls.

Read Peru reports jump in upstream hydrocarbons investment and Peru breaks hydrocarbons exploration drilling drought

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Stepped up efforts to break the malaise which has impacted the upstream industry has led to the establishment of notable, perhaps lofty, production targets.

Hydrocarbons licensing authority Perupetro forecasts output in 2028 will average 74,373b/d, nearly double from 38,649b/d last year.

Production this year through the end of July averaged 41,081b/d, with projections of 53,967b/d in 2025, 58,087b/d the following year and 61,388b/d in 2027.

The growth will be driven by northern jungle acreage, according to the government agency.

In the near term, blocks 8 and 192 are expected to produce 6,000b/d and 10,000b/d, respectively, while block 67 would contribute 2,900b/d in 2026 and block 64, 10,000b/d in 2028.

Another area due to begin output shortly is offshore block Z-1, with 1,500b/d.

Drilling and/or workovers at blocks I, III, IV, V, VI, IX, XIII, XV, 31C, 57 and 95, Peru's principal oil producer, also will underpin the projected output jump.

This month, an investor call was issued to operate blocks I and VI for 30 years.

Further out, authorities have pinned hopes on northern offshore blocks Z-61, Z-62 and Z-63, where Anadarko recently completed seismic work. The drilling of exploration wells is penciled in for 2025-26.

Another instrument the government is using to build-out the sector is the granting of technical evaluation agreements, or CETs in Spanish, which allow for a first option to negotiate an exploration and production license contract if terms are fulfilled.

Perupetro recently established a CET for an area in the Madre de Dios basin, and CETs are currently held by Condor Energy and TotalEnergies, among other companies.

Read Multiple Significant New Oil Leads Identified in Peruvian TEA and Total Energies E&P will carry out studies to evaluate the potential of the Talara and Tumbes basins in northwest Peru