PERU: THE OIL AND GAS FUTURE — CAMISEA AND OTHER PROSPECTS

• Jurisdiction: Derecho Internacional

Oil and Gas Development in Latin America
(Mar 1999)
CHAPTER 13A
PERU: THE OIL AND GAS FUTURE — CAMISEA AND OTHER PROSPECTS
JUAN ASSERETO
CHAIRMAN OF THE BOARD PERUPETRO S.A.
Lima, Peru

MARCH 17-19, 1999

I am very pleased to be here in front of so many important legal and Industry experts from Latin America, The United States and Canada.

I would like to make some comments and to share some experiences regarding the oil and gas future in Peru: the CAMISEA project and other important prospects, such as AGUAYTIA.

There are a lot of social and economic benefits involved in the development of such prospects, specially of Camisea. As you know, Camisea is located in the middle of the jungle at the south east of Peru and an immediate consequence of its start would be the regional development. In addition, the whole country would gladly see how the annual deficit of the hydrocarbon trade balance could be reverted, plus, a significant income from taxes.

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As one of the many outputs of this Project, the natural gas will become for the Peruvian consumers, a new choice of energy source, at lower prices than other fuels commonly used. Such market competition would make the Peruvian production and services much more competitive, both in the domestic and foreign markets.

Furthermore, the very low pollution rate of natural gas combustion will better protect the natural environment and life.

In accordance with a Decree enacted on September 1998, the exploitation of natural gas in the Camisea fields was included in the private Investment promotion process ruled by Legislative Decree N° 674, and also created the Special High Level Committee on the Camisea Project, who, from that date on, is the responsible for the outline, coordination and management of the promoting process of the private investment for the Exploitation of the Hydrocarbons located in the Camisea Fields.

Mr. Jorge Camet Dickmann, the nominated President of the Special High Level Committee on the Camisea Project is the authorized person to tell you about the update stage of the Project.

Another Gas Project in Peru is the Aguaytia Project developed under a License Contract in Block 31 located in Padre Abad, Province of the Ucayali Region in the Central Jungle, covering a total area of about 16,630 hectares.

The License Contract was signed on March 30, 1994 by and between PERUPETRO S.A. and the Peruvian Branch of the Maple Gas Corporation del Peru. It was amended on July 25^th , 1996 to include the transference of 99% of the Contract to Aguaytía Energy del Peru S.R. Ltda. which from that date on, would act as the Contract Operator and canalize the investment required for the execution of the Aguaytía Project.

The Aguaytía Project is the first commercial effort to develop a natural gas...