Petroperu accelerates talks for Amazon oil block partner
LIMA, June 27 (Reuters) - Peru's state-run oil company Petroperu is in talks with five firms, including Canada's PetroTal (TAL.TO), opens new tab and U.S.-based Upland Oil and Gas, as it seeks a partner to reactivate a key Amazon oil block, a company executive said late Thursday.
Tomas Diaz, manager of Petroperu's exploration and exploitation unit, told Reuters the company expects to reach an agreement for Lot 192 by mid-to-late July.
The reactivation of Lot 192, located near the border with Ecuador, is crucial for supplying Petroperu's newly modernized Talara refinery. The company is grappling with a financial crisis and significant debt following a $6.5 billion overhaul of the plant.
"We are in a direct negotiation process," Diaz said, adding that a meeting with PetroTal is scheduled for next week. "We expect to select our operating partner in about two weeks; it will then be presented to Petroperu's board for approval."
PetroTal and Upland Oil and Gas did not immediately respond to requests for comment.
Petroperu, which holds a 39% stake in Lot 192, has been searching for a new partner since April after Altamesa Energy Canada, which held the remaining 61%, withdrew from the project amid debts to suppliers and local communities.
Diaz stated that any new operator must honor existing service agreements with community-owned companies in the area. Oil firms in the Peruvian Amazon often face conflicts with indigenous communities demanding local jobs and greater social investment.
Petroperu expects the block to produce up to 12,000 barrels per day (bpd) within six months of restarting. That output could rise to around 21,000 bpd after the new operator completes a drilling program.
Diaz also confirmed that Petroperu is in separate talks with PetroTal to renew a contract for crude transport through the Northern Peruvian Pipeline.
The 1,100-kilometer (684-mile) pipeline is currently operational but sits idle without any active contracts.
PetroTal, which operates the nearby Lot 95, previously stopped using the pipeline due to repeated shutdowns caused by attacks on the infrastructure, opting instead to ship its crude by barge to Brazil.
"A new crude transport contract will be positive and make Petroperu's pipeline profitable," Diaz said.
Petroperu posted a first-quarter loss of $111 million, improving on a $183 million loss from the same period a year earlier.
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