Frontera temporarily halts Peru operations after pipeline shutdown

12 June 2018, Week 23, Issue 717

Frontera Energy has temporarily halted operations at its Block 192 concession in Peru’s Amazonian region of Loreto.

Work was stopped after a suspected oil spillage forced state-led energy producer Petroperu to close part of the Nor Peruano oil pipeline. 

Petroperu declared force majeure on June 4 on a section of the 1,106-km pipeline, which moves crude from jungle oil blocks to the Talara refinery on the Pacific coast, after oil patches were spotted on the Pastaza River some 5 km outside of Block 192. As a result, Frontera called its own force majeure on Block 192 on June 5. 

According to the company, the impact of the shutdown on net output is around 8,600 bpd, although sales volumes in the second quarter are unlikely to be affected amid a build up of inventories. 

"The company is working diligently with Petroperu and local communities to provide resources for the clean-up, and is hopeful that the force majeure period will be of limited duration," Frontera said. 

The 1.3 million acre (5,260 square km) Block 192, which sits between the jungle provinces of Datem del Maranon and Loreto, can produce up to 12,000 bpd of crude, or a fifth of Peru’s domestic output. 

Frontera’s concession to operate the block is due to expire on June 10, 2019, after which control will be handed back to Petroperu. The period of time that the Nor Peruano force majeure is in effect will be added to the end of the concession term. 

Also in Peru, Frontera said it anticipates spudding Delfin Sur-1, the company’s first offshore exploration well, in July. Delfin Sur-1 is part of the 270,000-acre (1,093 square km) Block Z1 that also includes the Corvina and Albacora production fields. 

The company has already begun mobilising the Petrex-10 drilling rig, which will target a large structural closure 4 km from the Corvina production platform. 

Peru accounts for about 15% of Frontera’s overall net production, with the lion's share of its assets located in Colombia. 

The company, known as Pacific Exploration and Production before a name change in June last year, aims to spend between US$450 million and US$500 million in 2018, double the US$236 million it invested in 2017. 

Around half of the investment has been earmarked for maintenance and development drilling and half for infrastructure and exploration.

The investment is expected to deliver between 125 and 135 development wells, 11 to 15 exploratory wells and 15 to 25 work-overs, Frontera said in April.

Edited by

Ryan Stevenson

Managing Editor

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