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Repsol, Petrobras announce gas and condensate discovered in Peru
LIMA
Petroleumworld.com, Jan 15, 2008Repsol YPF SA, Spain's largest oil producer, confirmed an ``important'' natural-gas discovery in Peru's southeastern jungle, Peruvian President Alan Garcia said.
Repsol, based in Madrid, and its partners discovered more than 2 trillion cubic feet (56 billion cubic meters) of gas in Block 57 bordering the Camisea gas fields where Repsol is a partner, Garcia said. Petroleo Brasileiro SA, which announced the find last month, and ConocoPhillips' Burlington Resources unit also own stakes in the field.
``This important gas find will represent millions of dollars in income for Peru,'' Garcia told reporters in Lima today. ``It will enable us to be self-sufficient in fuel.''
Peru, South America's fifth-largest gas producer, is counting on $5 billion in energy investment projects, including a $3.8 billion gas-export plant being built by Dallas-based Hunt Oil Co., to double output of the fuel and drive 7 percent annual economic growth over the next four years. Petrobras is seeking sources of gas to meet a shortage of the fuel in Brazil where it is building liquefied gas import terminals.
Repsol, which is the field's operator, owns 41 percent of the project, while Petrobras, as Brazil's state-controlled oil company is known, holds 35.15 percent, Rio de Janeiro-based Petrobras said in a statement. Repsol and Petrobras are in the process of buying Burlington Resources' 23.85 percent stake.
The find comes after Repsol suffered from declining production and capped prices in Argentina, and forced sellouts in Bolivia and Venezuela. That prompted Chairman Antonio Brufau to step up efforts to find oil and gas outside Latin America.
The total amount of gas expected in the field is equal to about two years of natural-gas consumption in Spain, Repsol said in a statement.
Petrobras' Share
Petrobras' share of the expected reserves, if proven and found to be commercially viable according to U.S. Securities and Exchange Commission standards, would increase the company's total gas reserves by about 6 percent, according to 2006 reserve figures, the latest available on Petrobras' Web site. It would boost its non-Brazilian Latin American reserves, including those in Bolivia, where Brazil gets half its supplies, by almost a third.
``This is a good start to the year,'' said Jason Kenney, an energy analyst at ING Wholesale Banking in Edinburgh. ``It's a sizeable find and it's gas close to their Camisea project, so it adds value immediately.''
Repsol, a partner in both Camisea and Hunt Oil's project, has also made three heavy crude finds in its northern jungle Block 39, Repsol's Peru country manager, Jose Manuel Gallego, said.
Petrochemical Plants
``This is the result of investor-friendly legislation,'' Gallego said. ``This gas find confirms there are other fields around Camisea and will spur more exploration in the area.''
Block 57, which adds to an estimated 13.4 trillion cubic feet in Camisea, will help cover demand from homes, cars and industry, as well as plans for petrochemical plants over the next 30 to 40 years, Energy Minister Juan Valdivia said today.
Companies including Petrobras, Long Grove, Illinois-based CF Industries Holdings Inc., and Sioux City, Iowa-based Terra Industries Inc., are seeking to build petrochemical plants south of Lima.
The new field is beside blocks 58 and 110, where Petrobras has 100 percent stakes and is exploring for oil and gas.
Repsol fell 30 cents to 24.09 euros in Madrid. Petrobras dropped 0.4 percent to 81.11 reais in Sao Paulo trading.
Story reporting by Alex Emery in Lima and Kristian Rix in Madrid from Bloomberg
- aemery1@bloomberg.net / krix@bloomberg.net
Bloomberg 14 01 08Copyright© 2007 Petroleumworld. All rights reserved.
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