Perupetro to Sign 10 E&P Contracts in 1H06

Peru's hydrocarbons promotion agency Perupetro plans to sign 10 new exploration contracts in the first half of 2006, five of which have been approved by the agency's board and are awaiting approval by Peru's President Alejandro Toledo, Perupetro CEO Jose Chavez told BNamericas, clarifying a report by local news agency Andina.

The five pending contracts include: block 117 in the Maranon basin to be signed with Brazil's state oil company Petrobras (NYSE: PBR); blocks 118, 119 and 120 in the Ucayali basin with US oil company Amerada Hess (NYSE: AHC); and block 21 in the northwest basin with UK oil exploration company Gold Oil (LSE: GOO).

US oil company Hunt Oil has already received Toledo's approval for block 76 and has only to sign the contract though a date has not yet been established, Chavez said.

Peruvian oil company Petrolera Monterrico signed an E&P contract on January 19 for block 20 in the Tumbes and Talara basins.

Eight other contracts are currently under negotiation, three of which will likely be signed in the first half of the year, Chavez said.

The contract most likely to be signed first is for block 114 in the Ucayali basin with Irish oil company Pan Andean Resources (LSX: PRE) as the company is just finishing up some paperwork, Chavez said.

Perupetro board president Antonio Cueto estimates each of the 10 new contracts will bring in investments from US$30mn-40mn through the next five years, Andina reported.

Chavez also said the law for the promotion of investment in marginal fields stipulates a total investment of US$125mn over the course of the next five years by the companies affected by this law: Petrobras, Petrolera Monterrico and Peruvian oil E&P companies Mercantile and Rio Bravo.

Perupetro signed 15 oil contracts in 2005, a record over the past 30 years, and Chavez estimates Perupetro will sign roughly 12 this year.

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