Petroperu Returns to Oil Production After 25 Years

On Monday, Peru’s President Pedro Castillo announced that Petroperu assumed the exploitation of the Block I field. This allowed this public company to return to producing oil after 25 years, in which it remained limited to fuel refining, distribution, and marketing.

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Petroperu took over the operations of Block I for the next 22 months as the Peruvian State concluded a 30-year exploitation contract with the private company UNNA Energy.

"It is a fact of enormous significance for both the public company and the country," Castillo said during the delivery ceremony of Block I, which is located in the Piura region on the border with Ecuador.

"Until the 1990s, Petroperu produced up to 187,000 barrels per day, but privatization policies paralyzed its development to the detriment of the country," the Peruvian president commented.

Block I is a small oil field with 99 drilled wells whose average daily production is barely 540 barrels of oil. However, this field will allow Petroperu to supply its own production to the Talara refinery, whose modernization cost the company over US$5 billion.

It will also serve as preparation to exploit blocks 192 and 64, two fields in the Amazon where Petroperu will partner with other private companies so that they directly assume the operations of the wells.

Block 192 is the Peruvian largest oil field and has a basic production of about 10,500 barrels per day. There, Petroperu will be associated with the Canadian oil company Altamesa, which would be the beneficiary of a 30-year exploitation contract that the Castillo administration is expected to approve in early 2022.