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Perupetro discusses upcoming mature field Licensing Round

Perupetro, Peru's national hydrocarbons agency joined the Global E&P Summit to discuss Peru’s upcoming licensing round, great oil and gas potential and reveal available and future business opportunities. As part of the preparations, I had the opportunity to have an extensive interview with Daniel Hokama, General Manager of Perupetro.

One of the most common questions we get is "What is the difference between Perupetro and PetroPeru and what is the role of the organization within the country?”

Daniel Hokama, Perupetro, IN-VR, Oil, Gas, Licensing Round

I'm going to start by explaining the difference between Perupetro: that is our company, and Petroperu. Petroperu is the National Oil Company of Peru, working mostly in midstream and downstream. They are looking into returning to upstream activities, which they stopped in 1993. Perupetro, is the National Hydrocarbon Agency of Peru. We are in charge of the promotion of hydrocarbons, negotiation, supervising of the contracts and we are working very hard in promoting laws and regulation to incentivize investment in upstream.

If a company wants to look into investment opportunities in Peru, whom should they approach?

When talking about upstream opportunities, Perupetro is Peru’s promotion agency, working very closely with the Ministry of Energy and Mines. The Ministry of Energy and Mines is in charge of issuing the laws, regulations, and of course, the direction of the country, in terms of mining and energy.

We know that it is very important to develop our hydrocarbon resources in an efficient way. We are a small country with a lot of potential. We have 18 basins, with only five currently producing.

We have no developments in offshore, so there is a huge opportunity for IOCs to be the first one here. We have only a few companies that are just exploring nowadays, but we already signed agreements with majors such as BP, and Tullow Oil.

We also have IOCs that are very interested to take a look into our offshore basin.

Perfect. When are the offshore blocks opening? Will it be through a licensing round, open door or direct negotiations?

Well, we have a regulation that we are working to change because we want to open our market to all kinds of companies: If an IOC is in the top 100 companies in oil and gas, they can express interest directly with us, provided there is no other IOC interested in the same area. If we have two companies interested in the same area we have to open the market, through a bid.

We have no bonus pay, and our whole database is completely free for all interested companies to access information. In order to gain access you have to request it from Perupetro and process it by yourself. If we have processed information on a block then we also provide it as well.

We are very open to new investments, and we are working very hard in environmental and social issues. We promote coexistence of hydrocarbon activities with fishery, tourism, and agriculture and many more.

We are currently working on the communication of and how important energy is for the development of Peru.

How are you tackling communication challenges? Is it through communication strategy and planning you have in place? Is Perupetro actively involved as an authority? How do you go about it?

Perupetro is very involved in that, with a clear plan to explain the benefits to people and debunk urban legends and myths. Redefining vocabulary is also a key priority as “seismic” and “exploitation” can have negative connotations and mislead people in terms of activities.

Regarding coexistence, actually, in the lower part of our country, we have a very nice beach with small abandoned oil platforms. We were in the process of decommissioning them but the divers community asked us not to do it, because under the sea, under the platform, an entire micro-environment of fish was created, including corals and everything there, so the divers go there and have developed a tourism activity out of it.

They use the platform to dress, put all the equipment and then dive underneath. This is another sign that the hydrocarbon industry and the tourism industry can coexist. In addition to that, the fish that are around the platform are food for bigger ones, so the fisheries start to fish around the platform.

So, there is only the matter of explaining and communicating how we can all work together here.

The hydrocarbon industry in Peru is a formal industry that cares about all the safety and environmental issues, and we expect the same from all our partners. With our assistance, of course.

The reputation of our activities is very important and we have to have sustainable development of all the industries that are developing in the country - in this case in the sea and in-land as well.

This is beautiful. It's really important for a national entity to also care for these matters.This puts us in a position for the next question: What are you currently looking for from investors? Is it long-term commitment, strong technical expertise? What are the qualifications of your potential investor?