Talara basin blocks nearing ‘technical limit’

Blocks in Peru’s northern Talara basin are reaching their technical limit for drilling wells, performing workovers and lowering costs, according to Seferino Yesquén León, board president of hydrocarbons licensing authority Perúpetro.

Yesquén made the comment during a discussion on the sector’s future organized by local energy and oil management school ESGEP.

He highlighted the need to explore deep horizons and deploy enhanced oil recovery, and the opportunity to tap unconventional resources.

Production from these areas will be vital for state oil company Petroperú’s new Talara refinery when it comes online in 2021, the NOC’s chairman Eduardo Guevara Dodds said during the talk.

The concern of Guevara and Yesquén targeted contracts due to expire in the near term, such as Graña y Montero Petrolera blocks I (December 2021) and V (October 2023), and Sapet block VII/VI (October 2023), Perúpetro information shows.

Both agreed, however, that a more attractive royalties scheme is needed for when new companies take over the blocks and/or the current operators continue.

“They [the royalities] have not had a mechanism that allows them to adapt to the new economic conditions,” said Guevara, who argued that “with these royalties the impact has been negative: less reserves, less investment.”

Yesquén said the energy and mines ministry is reviewing a proposed change to the royalties regulation, while a proposal to defer royalties for 90 days to help operators during the current crisis is under review at the economy and finance ministry.

The officials also called for changes in the canon payments framework to guarantee that central government transfers to regional and local authorities are channeled to sustainable development projects.

Yesquén said that COVID-19 has led to the loss over of over 10,000 sector jobs, in particular in the northern region of Piura and jungle region Loreto.

Source: Perupetro (MO = jobs)

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Photo credit: Perúpetro