Weekly Report - 03 April 2014 (WR-14-13)

PERU | Kiteroni gas field comes on stream. On 31 March Spanish energy firm Repsol announced that production had begun at its Kinteroni gas well in central Peru. First discovered in 2008, the Kinteroni well is located in the 287,120 hectare Lot 57 concession that spans the regions of Cusco, Ucayali and Junín and is believed to contain some 2-3 trillion cubic feet (TCF) of natural gas. As such it is considered one of the five largest natural gas deposits in the world. A Repsol statement said that initial production at Kinteroni was of around 20,000 barrels of oil equivalent (BOE) per day, but that it expected that this figure could more than double by 2016. The announcement was hailed by Peru’s hydrocarbons agency, Perúpetro, which said in a statement that it should help attract more investment to the natural gas sector in general and to central Peru’s vast natural gas fields in particular. Perúpetro highlighted that the US$808m investment that Repsol and its partner in Kinteroni, Brazil’s Petrobras, made in the project should ensure that production reaches 85m cubic feet of gas per day this year, and that the plans to invest a further US$592m in 2014-2018 should help take production levels to a peak of 210m cubic feet of gas per day. In addition, Perúpetro pointed out that Repsol already has plans to conduct further 2D and seismic exploration exercises in the Mapi and Mashira rock formations also located in the Lot 57 with the aim of drilling an exploratory well in the Mashira formation next year and one in the Mapi formation by 2017. Last year, a study by Scotiabank forecasted that Peru’s natural gas production would increase by as much as 6% once production in currently inactive gas fields such as Lot 57 begins. In 2012, the last year for which full figures are available, Peru’s national gas production reached 418m cubic feet. However, on 18 March Perúpetro revealed that in the past 12 months seven gas exploration and exploitation concessions had been cancelled after the companies holding them decided to abandon them. According to Perúpetro, most of these projects were abandoned due to social conflicts and delays in the approval of environmental licenses.

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