Perupetro approved Global Energy's contract for block 95 and Burlington's contract for block 104 on December 15. The energy and mines ministry and the finance ministry should approve both contracts in January, paving the way for them to be signed in February, the spokesperson said.
Both contracts have an exploration period of seven years, which includes six exploration phases, the official said.
Global Energy is expected to invest about US$30mn in block 95, while Burlington should invest US$40mn in block 104, the spokesperson said.
Under the contracts, Global Energy must complete 400 technical exploration units (UTEs) from the third phase, while Burlington must complete 437 UTEs on the larger block 104. One well is equivalent to 400 UTEs, so the companies can either drill one well and/or carry out other exploration activity such as seismic work, the spokesperson said.
If a commercial discovery were made, the production phase would be for 23 years. The contracts are subject to an initial 5% royalty, which would be determined by future production levels.
Global will have a 100% interest in block 95, which covers approximately 1.26 million acres, Harken said in a statement Friday. This would be Global's first contract in Peru.
"Once the company signs the contract we will have a better idea about their development plan and investment in each stage," a spokesperson for Harken's PR firm CTA Public Relations, Bill Conboy, told BNamericas.
Based on how Harken has operated in Colombia, it is likely to begin by re-completing the existing Bretaña 1 well, Conboy said. The Bretaña field in block 95 was identified in the early 1970s. In 1974 the Bretaña 1 well tested 18 degree API gravity oil at rates of approximately 800 barrels of oil a day, the statement said.
The approval follows Global's technical evaluation agreement signed with Perupetro in 2001. Global conducted an extensive study of block 95 that included the reprocessing of seismic data and evaluation of previous well data.
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