Recovery forecast for Peru hydrocarbons investment

A significant recovery in hydrocarbons investment in Peru is expected in 2024 with growth projected at around 7%.

The outlook is part of the government’s supporting arguments for next year’s budget proposal.

The sector spend forecast will be driven by stepped up activity at blocks 58 and 95 to sustain production and exploratory work at block 107, according to information from the economy and finance ministry.

“In 2024, the dynamics of private investment should return to the positive range and grow 2.2%, sustained by the recovery of non-mining investment, in line with the continued dynamism of investment in infrastructure and hydrocarbons, the strengthening of investment expectations, and the more flexible financial conditions,” the ministry said.

“On the contrary, mining investment will continue to be affected by the delay in the start of new projects,” it added.

Not all are convinced, however, of what the ministry sees as an improving operating environment.

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The UN Economic Commission for Latin America and the Caribbean estimates that Peru’s GDP will grow 2.5% in 2024 versus this year’s 1.3%.

THE NUMBERS

The latest data from hydrocarbons licensing authority Perupetro shows that upstream investment in the first eight months of 2023 totaled US$197mn compared with US$185mn in the year ago period.

Through end-August, exploration and production expenditure reached US$196mn and US$1.67mn, respectively, versus US$183mn and US$1.43mn in January-August 2022.

The bulk of the production outlay has gone to blocks 95, 88, 56 and III, and block 107 for exploration.

Peru hydrocarbons investment in US$ millions (Source: Perupetro)

Year	Production	Exploration
2022	324	2.29
2021	310	3.14
2020	185	61.1
2019	567	57.8
2018	561	40.8