Bloomberg News

Petrobras, Ecopetrol Boost 2011 Peruvian Oil Exploration

June 03, 2011

(Updates with oil company official’s comment in sixth paragraph, investments in eighth, ninth paragraphs.)

June 3 (Bloomberg) -- Petroleo Brasileiro SA and Colombia’s Ecopetrol SA are among energy companies aiming to increase Peru investments by a combined 50 percent to $1.54 billion this year, said the president of the state oil contracting agency.

Brazil’s state-controlled oil company known as Petrobras, Ecopetrol, Argentina’s Pluspetrol SA and Calgary-based Gran Tierra Energy Inc. will drill a dozen exploration wells in the Amazon jungle and off Peru’s coast this year, twice the average annual figure, Perupetro’s Daniel Saba said June 1 in an interview in Lima. Peru elects a new president in two days.

“With more companies entering Peru, more wells are being drilled,” said Saba, who awarded 14 exploration contracts in October. “Oil companies are in it for the long term and none of them have said they’re leaving.”

The Andean country’s stocks, bonds and currency slumped today on investor fears that former army renegade Ollanta Humala, who pledged to rewrite oil and mining contracts and halt gas exports if elected, may win the June 5 vote. Humala was statistically tied with Keiko Fujimori in the latest poll. Fujimori has promised to try to attract foreign investment.

Peru, which tripled natural gas output to a record 1.03 billion cubic feet a day in April from a year earlier, has lined up $10 billion in energy projects through 2016 in a bid to double crude output and gas reserves, according to the Energy Ministry. Companies including Canada’s Talisman Energy Inc. and Spain’s Repsol YPF SA, which have signed a record 86 contracts to date, invested $987 million last year.

Gas Investment

The outcome of the elections won’t slow a $2 billion expansion of the Camisea gas fields, said Daniel Guerra, spokesman of Buenos Aires-based operator Pluspetrol. Pluspetrol plans to quadruple gas shipments to petrochemical and power plant projects by the end of 2012.

“We believe we’ll be able to work with whoever is elected,” Guerra said in a May 18 interview during a visit to the fields. “It’s in the next government’s interest to bring in more investment in the gas industry.”

Transportadora de Gas del Peru, a seven-company group whose partners include Pluspetrol, is scheduled to finish an $850 million expansion of its gas conduit next year, he said.

Other energy investments in Peru include Perenco SA’s $2 billion oil and pipeline projects, CF Industries Holdings Inc.’s $2 billion petrochemicals complex and Petroperu’s $1.3 billion Talara refinery expansion.

Crude oil for July delivery fell 18 cents to settle at $100.22 a barrel on the New York Mercantile Exchange. Futures have doubled over the past two years.

--Editors: Robin Saponar, Dale Crofts

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net.


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