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Peru has not adopted the necessary measures to reactivate the hydrocarbons sector and unblock investment to tap the country's oil potential of 9Bb, according to Felipe Cantuarias, president of local hydrocarbons association SPH.
The industry representative highlights that the country has become a net fuel importer which he argues poses an energy security risk.
Latest figures from hydrocarbons licensing authority Perupetro reveal that hydrocarbons production continues at below historical levels.
Liquids and natural gas production this year through May 28 averaged 132,896b/d and 1.18Bf3/d, versus full-year 2017 guidance of 136,975b/d and 1.30Bf3/d. Full-year 2016 output averaged 135,090b/d and 1.35Bf3/d.
Liquids and gas production in 2021 is forecast to average 176,742b/d and 1.49Bf3/d, which when compared to year-to-date numbers would represent an increase of 33% and 26%, respectively.
The question arises, however, of how will Peru reach these targets amid depressed production levels.
In the case of liquids, much of the projected growth hinges on the startup of operations in acreage where there currently is no production, such as blocks 64 (Geopark), 67 (Perenco) and 95 (Gran Tierra Energy).
An important contribution would come from producing block 192 (Pacific Stratus Energy), which is forecast to average 19,800b/d in 2021 versus 2,516b/d in the year-to-date.
The sector received a boost in recent days with news that China's CNPC plans to invest US$2bn to develop gas block 58.
The government is also working to improve contractual terms in the lead up to a planned licensing round, due to be launched this year as part of efforts to spark renewed interest.
The less-than-favorable operating environment has kept upstream investment at bay, with E&P spend hitting a four-year low in 2016 and the number of contracts falling to a record low as some companies return acreage.
Apart from volatile and still low commodity prices, drawn-out licensing and socio-environmental permitting has tempered stakeholder apetite to step up operations, in particular exploration as efforts focus on maintaining production.
Exploration investment in the first two months of 2017 fell 55% year-on-year to US$3.51mn while production outlays rose 25% to US$39.2mn.
There has been no recent registered seismic acquistion and although there has been an uptick in drilling activity, only one of the 26 wells spud in January-April was exploratory. The rest were development.
The BNamericas Project Profiles Database features over 60 upstream developments in Peru, among them: