What are the process milestones in the first semester?
We have finalized the acquisition agreement of Cepsa Peruana, which holds the block 131 concession where the Los Angeles field is producing. It is relatively small, 800 barrels per day, and we have plans, once we take control and approve the change of corporate guarantor, to increase production from this field and take advantage of some of the synergies with block 107 as well as block 95 in Brittany. There are some announcements that cannot be made, we are dependent on the approval of the corporate guarantor that has been approved by Perupetro and is currently at the Ministry of Energy and Mines (MINEM) and we want it to come out as soon as possible, ideally in October.
In Brittany, we continued our drilling campaign, announcing results up to well 19H and achieving over 20,000 barrels in two months. Overall, the first quarter of production closed very close to the budget and production guide we presented to the market, and compared to last year, production growth is over 20%.
What initiatives do you have underway?
We are drilling well 20H and expect to complete it by the end of September. Once that is completed and commissioned, we will announce our expectations, which is to continue to add reserves and production from the Brittany field. We were originally going to drill until 19 hours and we have been able to add others.
When will the next wells be drilled?
After these twenty hours, come 21 hours, 22 hours, 23 hours, and we end up in the middle of the first quarter of next year.
Read also: PetroTal between returning to exploration in Loreto and purchases in the region
With this progress, will capital expenditures be higher in 2024??
At the beginning of the year, we announced a budget of close to $130 million, and in the press release that we issued after the financial statements for the second half of the year, we announced that this investment will increase, and will rise. To be close to $160 million.
Will they increase production?
We are now facing the challenges of a time of river depletion, and production has been somewhat limited, and we are still committed to the plans, but they are historic levels that we are reaching in the Ucayali and Amazonas rivers.
We are targeting to meet the production guidance of 16,500 to 17,500 barrels per day for the full year. The first semester met that guideline, and now we are in the dry season, it is more difficult and it has moved forward, but once the river conditions improve, we will increase production again to bring them to the production guideline level and end the year in the range that we announced.
Will they be conditioned by this factor?
With the drilling approval, we have developed the wells that we were going to drill next year. So, during the time when the river is rising, we will be able to have a larger production volume. In parallel, we have expanded the plant’s capacity. We were previously very constrained in water re-injection and we have drilled a water re-injection well this year (5W), and by November, we expect to be able to have more re-injection pumps.
Next year, we await approval of the MEIA amendment to manage other secondary permits and the ability to expand the plant, to complete the development of the Brittany field.
Read also: Petrotal plans to drill up to 18 additional wells in Block 95 in Loreto
Factory Facilities Expansion Project
Is the plant expansion the project you presented to Sinas?
It is in Cincy. Unfortunately, the first submission of the file was declared inadmissible in July, and we resubmitted it last week. This will certainly affect the project implementation schedule, the investments we have planned and the growth of Brittany, which depends on this permit.
The document indicated an increase in production to 50 thousand barrels per day. Is this the case?
When you manage permissions, you don’t want to be short, so we have a lot of lag. In the company presentation, we show a forecast of going to 25,000 to 30,000 barrels, and that’s the company’s plans.
Is the investment maintained?
We didn’t change the terms, we just modified the notes which were plan metrics and a specialist signature, but we didn’t change the investment plans.
So, when do you expect to start implementing?
Next year. We’ll actually do the budget for next year and we’ll include all of these executions.
Will its capital be bigger by 2024?
There will be more capital allocated to production facilities. Wells have been drilled wells and a large portion of them will be completed this year, so the main investment next year will be targeted at production facilities.
Will the budget of only $260 million be implemented in 2025?
It will continue for more than a year, we are growing in a typical way, and there will be investments in the next year and the following years as well.
Read also: Petrotal seeks to achieve a value of US$2 billion and be a partner in Block 107
Operation of parts 131 and 107
What are the plans for Lot 131?
We have plans to increase production, we can’t give too many details because we haven’t taken control of the assets, but there are some plans now. It’s not as big as Brittany, it’s a bit smaller. The acquisition is subject to the publication of the Supreme Decree approving the change of the guarantor company.
Will it come this year?
We aim to have it finished by October. There are some times that have already been organized and are being met. The first phase has already been obtained, which is the approval of the Perupetro Board of Directors, and now the file is in Minem.
Do you see synergies with piece 107?
The distance between the Los Angeles field (block 131) and block 107 is about 120 kilometers, they are very close. We are already seeing a comprehensive development strategy for the future. The 107 is under exploration and the crude there is expected to be light, similar to the crude from the Los Angeles field.
Will you take advantage of any infrastructure in Los Angeles for Lot 107?
It may be so, and it should be evaluated later. You have to do the technical work.
Do you see many others in Peru and other countries?
Yes, we want to achieve this growth by continuing with the development plan, as the MEIA region in Brittany is important and seeing opportunities in other countries.
Are you interested in tenders from Perupetro?
Yes, we also see alternatives in Peru. Moreover, the idea is to focus on the region, but we do not stop seeing other countries where opportunities arise.
Are you interested in any gas operations?
We don’t rule out going into some sort of operation or acquiring a company that has gas and oil as well, if that’s a good opportunity. Blocks 131 and 107 are light crude, so we don’t expect gas to come in.
Read also: Petrotal announces the acquisition of Petrolína Petroleum del Perú, which was exploring Area 107
crude oil transportation
Is shipping through Ecuador ok?
Yes, because all the permits have been obtained, all the work and modifications have been completed, and the first vessels should arrive at the port of Pompeii (Ecuador) at the beginning of September and that will be a very important milestone. We did it at a critical moment in terms of river levels, it gave us a lot of information and at the end of the pilot program we will be able to draw some conclusions. In Brazil it started like this, the evacuation route started with a pilot of 120,000 barrels. We adapted the improvements, then we made another sale and then we concluded a permanent contract with peaks of more than 620,000 barrels per month. So the idea is to go step by step and open a new market.
Today, where do you mainly ship?
90% of our production leaves through Brazil. The other 10% is sold in the Iquitos refinery, and what we are doing is looking for other commercial avenues that allow us to diversify, and think about production growth in the coming years.
Will they resume shipping via the North Peru Pipeline (ONP)? What conditions do they need?
ONP has been using it, Petroperú has announced that it has been pumped. What we are waiting for, working on and promoting are some improvements that give greater reliability to this route and we are trying to solve some commercial and financial aspects so that sales can be made. We have spoken with Petroperú and Minim.
Are there improvements to be made in the hydrocarbon sector?
There is always work to be done on permit improvements. The times are sometimes very long. There are some amendments that are proposed to take mining as an analogy, where the duration of contracts extends to the productive life of the reserves. In oil 30 years; 40 years for gas. Sometimes these periods, due to delays in permits, do not allow for all investments to be made, and we have asked to review this duration or to know how to extend the contracts and adjust the royalties in some cases.
I promoted the 2.5 fund, how is it going?
It is a permanent development fund, and we have contributed more than 18 million US dollars and are cooperating to implement infrastructure improvement projects.
Read also: PetroTal acquired a 100% stake in Block 131 for US$5 million.
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(Translation signs)Petroleum(r)Companies(r)Oil(r)Hydrocarbons(r)Loreto(r)Cepsa(r)Huanuco(r)Ucayali
