BPZ to Start Drilling Offshore Well on Z-1 Block

Houston-based oil and gas company BPZ Energy is due to begin drilling the first of three exploration wells on the Corvina field in northwestern Peru's offshore Z-1 block this week, BPZ business development VP Xavier Suniga told BNamericas.

Drilling of the well is expected to take 4-6 weeks, with testing to be completed in the subsequent two weeks, Suniga said.

The total cost of drilling the three wells is roughly US$14mn, including two new wells at a cost of some US$6mn each and one US$2mn workover well, according to a previous BNamericas report.

BPZ later will drill a third new well if it needs to prove up reserves for its gas export project, which would be the fourth overall well including the workover well in the initial drilling program.

The company had planned to drill the first well in July but pushed back drilling back to this week.

"Offshore drilling logistics are a bit more complicated than onshore. Therefore, due to the importance of this first well and tight drilling equipment supplies, all necessary precautions were taken to achieve success. This is why the previously intended date for beginning of the drilling program was delayed until now," Suniga said in an email.

BPZ has received various inquiries from potential offtakers from the project, but plans to refrain from discussions with companies until it has results from the well testing, Suniga said in the interview.

BPZ is evaluating possible commercial integration with the Suez Energy Andino unit of Belgium's Suez Energy for the following: BPZ's prospective 160MW Nueva Esperanza plant; Suez's 180MW thermo project in southern Ecuador city Arenillas; and a US$25mn pipeline stretching from BPZ's onshore reception point to Suez's project.

BPZ is also considering the addition of a third 80MW turbine to its Peruvian plant as a result of Ecuador's recent energy shortage.

BNamericas will publish a full interview with Xavier Suniga in this week's Electric Power Perspectives.

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