OilVoice - Peruvian Oil Pipeline Project Moves a Step Closer to Approval

Peruvian Oil Pipeline Project Moves a Step Closer to Approval

Friday, March 12, 2010

The proposed Curaray-Andoas oil pipeline project in Peru has moved a step closer to becoming a reality after French independent Perenco has submitted its environmental impact report for the project to the Peruvian government. The project is part of wider heavy crude development in the north of the country.

Perenco believes its wholly-owned Block 67 in the Maranon Basin holds upwards of 300 million barrels of reserves. In addition, the French firm believes that it will be capable of producing as much as 100,000 barrels per day (bpd) at its peak. This figure would be equivalent to around four-fifths of the entire oil output of Peru at present.

In a similar vein to other upstream projects in the Peruvian Amazon a present, the development of Block 67 is being strongly resisted by indigenous communities and an alliance of Western non-governmental organisations (NGOs).

The French firm has already unveiled plans to spend some $359 million on the construction of the 207km pipeline running from the Curaray oil processing plant near the Ecuadorian border to the Andoas station operated by state-run oil firm Petroperu.

Following the forced nationalisation of its Ecuadorian assets in middle of last year, Block 67 in Peru has become Perenco's most important Latin American project. It has been operated by Perenco since 2008 and contains the Paiche, Dorado and Piraña oil fields.

Total investment in the concession has previously been estimated at $2 billion by the company's president François Perrodo.

All things being equal, Perenco is presently expecting to begin production at Block 67 in the year 2013. However, the schedule is subject to delays owing to the aforementioned conflicts with the indigenous groups inhabiting the region.

The problem lies in the projects whereabouts. Parts of the block lie in the Pucacuro national reserve and the Napo-Tigre territorial reserves, previously established to protect un-contacted tribes believed to be living in the area.

The submission of the environmental impact report for the midstream phase shows Perenco is pressing ahead with the Block 67 development regardless of the problems.