"We have fallen behind a bit in signing contracts - we should have signed at least four [this year], and we only signed two," Stumpfle said, adding, "a good year would be if we had signed ten or twenty contracts."
Stumpfle blames the backlog on private companies holding back on their investment plans due to the international oil and gas situation. "That's just the rhythm the companies have. Internationally there have been a lot of changes in interests and different factors that have affected not just us, but various companies," he said.
However, 2004 is looking brighter, Stumpfle said, adding that companies are asking for more information and are attracted to Peru by a new royalty system that allows companies to choose between two different royalty mechanisms if and when they make a discovery on their respective blocks.
The trend in Peru's Amazon region, where exploration is more expensive, is for companies to form consortiums to share the risk. "Today companies prefer to have a 25% interest in four blocks rather than a 100% interest in one block," Stumpfle said. Perupetro signed contracts for block 90 and area XIX last week.
The agency's board has approved two other contracts, which Stumpfle expects the energy ministry to approve soon, but they will not likely be signed until January-February, he said. The contracts are for block 57 with Spain's Repsol YPF and US-based Burlington Resources, and block 100 in the Maranon basin with local company Compania Consultora de Petroleo (CCP).
Apart from these two blocks, Perupetro expects to sign at least four more contracts in 2004, Stumpfle said. One of these could be with US-based oil company Occidental for block 101 in Maranon basin, and another for block 56 in the Amazon with the Camisea upstream consortium. "There are companies that are asking for a lot of information and some are interested, but we still have to figure out the conditions," he said. Estimated investment in new exploration contracts is about US$50mn each "if they complete all the stages," Stumpfle said, adding that companies have the option to withdraw if they lose interest in the block.
Perupetro signed its last contract of the year with Houston-based oil company BPZ on December 12 for area XIX in northern Peru's Tumbes department. The exploration phase is for seven years and, provided that seismic studies are promising, BPZ would drill three exploration wells and invest about US$5mn-6mn, Stumpfle said.
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