LIMA (Reuters) – State-owned China National Petroleum Corporation (CNPC) plans to invest $2 billion (1.5 billion pounds) in an oil and natural gas block in southern Peru in coming years, Rafael Zoeger, the head of Peru’s state energy agency Perupetro said at a news conference on Tuesday.
CNPC’s block 58 has some 3.9 trillion cubic feet of natural gas reserves, according to government data, enough to increase Peru’s total gas reserves by 27.7 percent.
Zoeger said CNPC had presented its development plan and would carry out the investments between 2017 and 2023. It plans to start drilling 60 wells this year, he said.
Block 58 is located in the Cusco region near Peru’s largest gas block of Camisea, from which gas is exported to Mexico.
Zoeger said Chilean oil and gas producer GeoPark Ltd (GPRK.N) would also likely present a plan to develop block 64 in northern Peru in coming weeks.
He said to encourage more investment in exploration, Perupetro would present the finance and energy ministries with a new royalty scheme for contracts based on productivity of wells and oil prices.