Peru Government to Seek Bids for All Expiring Oil Blocks

Peru will seek bids on all oil and natural-gas blocks whose contracts are scheduled to expire, a government official said today.

State oil company Petroleos del Peru SA will take as much as a 49 percent stake in 7 blocks currently operated by Maple Energy Plc (MPLE), Interoil Exploration and Production ASA, China National Petroleum Corp., and Pluspetrol SA, which may bid on the areas when their contracts expire, said Aurelio Ochoa, president of state oil contracting agency Perupetro.

“The company that offers the highest investment figure will win the bidding as there will be no automatic contract renewal,” Ochoa told reporters in Lima. “We need to turn around the decline in crude oil output.”

Crude oil production dropped 20 percent over the past decade to 69,399 barrels per day through April as aging oilfields deplete. Peru has lined up $16 billion in energy investment over the next 10 years in a bid to double oil and gas output, according to the Energy Ministry.

Philex Mining Corp. (PX)’s Pitkin Petroleum Plc unit will be permitted to continue oil exploration on Peru’s north coast even after an investigation showed its 314,132-hectare (775,906-acre) concession overlaps the $222 million Olmos irrigation project, as the company is only exploring in 0.3 percent of its concession area, Ochoa said.

To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net