Double-digit growth for Peru upstream production spend

Investment in Peru’s upstream oil and natural gas production totaled US$144mn in the first half, up 12.5% year-on-year.

The latest numbers from hydrocarbons licensing authority Perupetro also show that exploration spend reached US$1.44mn compared with US$1.21mn in the first six months of last year.

The bulk of investment has gone to block 95 - the country’s principal crude producer - and exploration block 107, both in the Amazon and operated by PetroTal, which plans to invest US$2.4bn at block 95 in 2026-35.

This year through end-July, 30 development wells were drilled, 17 of which were spud at block IV, nine at block III and two each at blocks 95 and XIII, and 25 workovers were completed, while no exploration wells or seismic work was reported.

In the same period last year, 37 development wells were drilled, and 74 workovers were completed, and no exploration wells or seismic work was carried out, according to Perupetro data.

Among the factors curbing exploration activity are continuing economic, political, and social turmoil, regulatory and legislative uncertainty, and socio-environmental conflict, as well as wider industry challenges such as those related to the energy transition.

In a related development, Vanessa Cueto, law sustainability program coordinator at DAR, an environment-focused NGO, said in a statement that the “government has been insisting on a series of technical proposals that would weaken environmental and social sustainability in the territories, and that come from both the authorities and private entities, as is the case of the current Perupetro proposal that seeks to modify the law of protected natural areas.”

Read Peru’s hydrocarbons reserves, production ‘at risk’

LICENSING

Meanwhile, the Talara commerce, industries and tourism chamber reported that during a visit to Perupetro, a delegation, which met with the government agency’s top officials, was told that the energy and mines ministry will issue a supreme decree in the coming days to transfer blocks VI and Z-69 to national oil company Petroperú.

In a release, the chamber said the NOC would only carry out workovers during the first two years and that directional drilling would start from the third, adding that Petroperú will seek a partner for exploratory drilling.

Read Petroperú ratifies its interest and capacity to operate lots of Talara

The government’s proposed transfer of acreage to Petroperú has sparked criticism.

“The fundamental principles of free competition and equal treatment that are constitutionally protected will be violated, affecting the transparency that must govern all government administrations,” according to mining, petroleum, and energy industry group SNMPE.

For Peru hydrocarbons association SPH, “a bidding process for these lots would generate greater competition, which would result in better investment conditions, payment of royalties and canons, and also greater production to supply the new Talara refinery.”