Will Peru break upstream hydrocarbons activity stalemate?

The latest figures from Peru reveal lackluster upstream hydrocarbons field activity as the sector struggles to regain momentum.

On the drilling front, 41 development wells were spud in 2023 versus 91 in 2022, according to numbers from hydrocarbons licensing authority Perupetro.

Of last year’s wells, UNNA drilled 28 (17 at block IV, 11 at block III), followed by Olympic (six at block XIII), Petromont (four at block II) and PetroTal (three at block 95).

Jungle block 95 is the country’s principal crude contributor and the Bretaña Norte 95-2-2-14H development well was the deepest drilled on the acreage in 2023, reaching a depth of 16,849ft.

Source: Perupetro

Exploration flatlined last year, with no wells drilled and no 2D and 3D seismic work carried out.

Source: Perupetro

Source: Perupetro

In an interview with mining, petroleum, and energy industry group SNMPE, Carlos Paredes, former head of national oil company Petroperú and CEO of Intelfin Estudios y Consultoría, argued that public sector signals have not been positive and have led to uncertainty and distrust.

“A shared long-term vision is required in the sector,” Paredes said.

Of particular concern has been the government’s push to assign areas to Petroperú as part of the NOC’s return to exploration and production.

The state operator currently holds blocks I, VI, 192 and Z-69, and criticism has come to the fore over the potential direct assignment of CNPC block X, Peru’s second highest crude contributor, to Petroperú.

Read The SPH demands that the Government ensure that the concession of Lot X respects free competition

Another challenge has been public engagement, although authorities and stakeholders have stepped up efforts, placing emphasis on embedding development clauses in contracts and ensuring that funds reach local communities.

Nevertheless, hydrocarbons activity remains one of the sectors with the most socio-environmental conflicts.

It should also be noted that the number of production and exploration contracts stands at 26 and six, respectively, a figure that has not varied in recent years.

In a bid to determine required upstream investment, Perupetro awarded work to prepare a roadmap.

In its latest inflation report, Peru’s central bank forecasts that hydrocarbons sector GDP will grow 2.9% this year versus previous guidance of 3.6%.