Peru Camisea Contract Talks to Wrap Up Soon
Contract talks between government officials and representatives from the consortia developing the Camisea natural gas project could be wrapped up early this week, Pluspetrol Peru Corp.'s general manager, Norberto Benito, said Monday.
According to Benito, things are going well and "it is possible" that a final version might be ready Monday or Tuesday, he said in a telephone interview.
The upstream phase of the Camisea project is led by operator Pluspetrol Peru Corp.
The Camisea project came onstream in mid-2004, giving a sharp boost to Peru's hydrocarbons industry.
Talks to fine-tune the contracts began in mid-August, shortly after the Alan Garcia government took office.
Three working groups were established, one each to look at the upstream contract, the downstream contract and the gas distribution contract.
Pending points include a new formula to fix domestic gas prices, currently linked to a basket of fuel oils based on international prices.
"That issue is on the verge of being resolved," said Benito.
He declined to give further details until the talks were finished.
Benito also confirmed that the government is pushing Pluspetrol to step up its work at block 56, which lies adjacent to the Camisea fields.
That block will produce natural gas for export and natural gas liquids for export and for the domestic market.
Energy and Mines Minister Juan Valdivia has voiced concern that Peru could have a liquid petroleum gas deficit by mid-2007, requiring imports.
The government's aim is to offset that deficit by having LPG users switch over to natural gas liquids.
"We could have a supply problem by the second half of 2007 and this will obligate us to import. Therefore, we have to take contingency measures and speed up Pluspetrol's investment to increase its production of liquids," Gestion newspaper quoted Valdivia as saying Monday.
According to Benito, however, block 56 is on track to start producing in April 2008 and while it could come onstream slightly earlier it would be a question of weeks, not months.
"If we begin operating earlier, it won't be in 2007," he said.
Benito said the consortium has finished drilling the first well and has started on the second. He was optimistic that three wells would be drilled this year.
Overall investment in development of the block has increased and is now pegged at $720 million as costs have risen, he said.
Gas from the block will supply Peru LNG Co., a group led by U.S.-based Hunt Oil Co. along with SK Corp. (003600.SE) and Repsol YPF (REP) that plans to export liquefied natural gas to Mexico by 2009.
Copyright (c) 2006 Dow Jones & Company, Inc.
- Chevron Starts Up Gorgon Extension Project
- USA EIA Hikes Up 2023 and 2024 Brent Oil Price Forecasts
- Macquarie Group Reveals Oil Market Outlook
- Enagas Opens Logistics Bidding for Mothballed Asturias Terminal
- ADNOC Chief: Shift from Fossil Fuel Unavoidable
- Eni Inks Deal to Build Hybrid Renewables-Gas Plant in Kazakhstan
- Biden Urged to Demand Climate Emergency as Smoke Chokes Washington
- Global Oil Demand for Road Transport to Peak in 2027: BNEF
- Improved Wage Offer Ends North Sea Dispute
- EU Looks to Boost Efforts to Store Captured Carbon Underground
- Saudis Remind Global Oil Market Who is King
- Saudi to Cut Output by 1MM BPD in Solo OPEC+ Move
- Data Science is the Future of Oil and Gas
- Debt Ceiling Deal Becomes Law
- What Do Latest OPEC+ Moves Mean?
- Fatality At North Rankin Complex
- Two Main Forces Have Come Together to Pull Down Commodity Prices
- North America Loses More Rigs
- Par Pacific Completes Buy of ExxonMobil Refinery
- Does the Global Drug Trafficking Industry Affect Oil and Gas?
- Which Generation Is Most in Demand in Oil, Gas Right Now?
- Who Is the Most Prolific Private Oil and Gas Producer in the USA?
- BMI Reveals Latest Brent Oil Price Forecasts
- Is There a Danger That Oil and Gas Runs out of Financing?
- BMI Projects Gasoline Price Through to 2026
- What Will World Oil Demand Be in 2023?
- North America Rig Count Reduction Rumbles On
- What New Oil and Gas Jobs Will Exist in the Future?
- What Does a 2023 USA Recession Mean for Oil and Gas in the Country?
- USA Oil and Gas Supported Nearly 11MM Jobs