MercoPress. South Atlantic News Agency

Peru plans to boost oil production to half a million barrels in five years

Daniel Saba, head of Perupetro

Peru forecasts a liquid hydrocarbons production of half a million barrels per day in five years time, said Daniel Saba head of Perupetro the country’s company that awards and supervises all oil and gas contracts.

In an interview with the leading daily of the capital Lima, El Comercio, Saba said that the industry is planning investments of 9 billion US dollars plus any new deposits that could be discovered in the next five years.

Peruvian oil production is currently 160.000 bpd and is expected to double in two years.
Since launching the last round of licensing last May which opened 24 potential areas, Saba has been visiting new companies from Australia, United States, United Kingdom, France, Canada and Colombia

In 2008 companies from Korea and Japan were involved but the whole process ended in a major scandal when telephone bugging disclosed a network of corruption previous to the concessions and which included business people, politicians and even journalists.

Following an in depth judicial investigation, Saba was found not to be guilty and has promised that this time “the transparency of the whole bidding process has several double checks including a committee totally out of bounds for interested companies”.

Nevertheless “we are satisfied with the response since the exploration process takes time and a lot of previous surveying is needed and we are talking of areas virtually virgin to hydrocarbons exploration”, added Saba.

“That is why the areas companies are being awarded are quite large, 500.000 hectares so companies can better focus where they believe there is a potential”.

Saba finally revealed that any company wishing to participate must have drilled at least one well, which before was not necessary, and royalties have increased. Currently Perupetro oversees 90 exploration and exploitation contracts.

The country is already a major natural gas producer from the huge deposits in central Peru in the Camisea area.