Occidental May Sign New E&P Contract in Peru - Minister

LIMA Feb. 22, 2007 (Dow Jones Newswires)

U.S.-based Occidental Petroleum Corp. (OXY) is on the verge of signing a new contract with the government to explore a petroleum block in northern Peru, Energy and Mines Minister Juan Valdivia said Thursday.

In December, Occidental announced it was planning to relinquish three blocks in Peru pending government approval.

At the time, company officials said the move reflected Occidental's growing emphasis on the U.S. and the Middle East.

Occidental officials were not immediately available for comment Thursday.

"Occidental is signing a contract for a block that is very close to the area that Petroperu is exploring," Valdivia said.

In late 2006, Peruvian state oil company Petroperu and Brazil's Petroleo Brasileiro SA (PBR) signed a technical evaluation agreement to study six blocks in the Maranon basin in northern Peru.

The government has made a concerted effort to drum up interest in Peru's flagging oil sector in recent years and has managed to attract significant investment after making contracts more flexible and attractive.

In 2006, for example, the government signed a record 16 new exploration and production contracts.

Copyright (c) 2007 Dow Jones & Company, Inc.

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