Petrobras Signs E&P Contract for Block 117 in Peru

Peru's hydrocarbons promotion agency PeruPetro signed an E&P contract with Brazil's federal energy company Petrobras (NYSE: PBR) for block 117 in the country's Loreto department, the agency said in a statement.

Petrobras will have seven years to explore the 1.36 million hectare block, with a possible 10-year extension. The contract gives 30-year oil production rights and 40 years for natural gas.

PeruPetro estimates Petrobras will invest some US$35mn in the minimum work program, which includes geological and geophysical studies, seismic works and the drilling of exploratory wells, the statement said.

The contract for block 117, located in the Maranon basin in the north of the country, was authorized by the government in March this year.

Petrobras also holds exploration contracts for block 112 in Loreto department, block 110 in Ucayali department and block 58 in Cusco department.

The company plans to invest US$90mn in the exploration phase of the three blocks, local news agency Andina reported.

Petrobras also produced 10 million cubic feet of natural gas a day on Piura department's block 10 in 2005.

Meanwhile, Perupetro will receive bids on June 5 for blocks 23 and 24, according to agency information. The contracts will be awarded on June 17.

Block 23 covers 100,292ha and is onshore in the Talara basin. Block 24 covers 111,751ha both onshore and offshore and is in the Sechura basin.

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