Why Tullow is looking at Peru

The Peruvian government's decision earlier this year to repeal decrees that authorized the signing of five offshore acreage contracts with Tullow Oil has not deterred the junior operator from advancing other projects in the country.

"So you might be asking, why Peru? Well, it's got the third highest number of oil seeps in the world. That's not a bad place to start," Tullow executive VP new ventures, Ian Cloke, said during the company's capital markets day.

Cloke said that entry into offshore block Z-38 – not one of the five contracts – is due to be approved around year-end with drilling penciled in for early 2020. In January, London-based Tullow and Karoon Gas Australia announced plans for the latter to farm out a 35% interest in the block to the former.

Cloke highlighted that no wells have been drilled in water depth greater than 400m in Peru, and that commercial terms are "absolutely superb."

In its annual general meeting presentation, Karoon said that the Marina-1 exploration well at Z-38 has the potential to open up offshore exploration in the Tumbes basin. The prospect's gross prospective best estimate resource is 256Mb.

The Australian group added that it is looking at opportunities for rig and vessel sharing to reduce costs.

In September, offshore liquids and natural gas production represented 4.9% and 0.7% of Peru's total liquids and gas output, according to data from hydrocarbons licensing authority Perupetro.

GUYANA-SURINAME BASIN

Cloke also updated Tullow's plans for Guyana, the company's number one priority in terms of multiple high-impact campaigns over the next three years.

The VP announced four drill candidates for the Orinduik offshore block in 2019: Amaila, Aurituk, Jethro and Kumaka.

Suriname is another top-ranked new venture for Tullow with work scheduled to ramp up in 2020, as well are Jamaica and Uruguay, countries where the junior also holds acreage.