Petroperu Returns to Northern Amazon as its Talara Refinery Begins Testing

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Petroperu (Lima, Peru) has been granted a full license for Peru's 192 oil lot. The block is in the northern Amazon rainforest and has an estimated output of 12,000 barrels per day (BBL/d) of oil. The state-owned company is returning to upstream business in the northern Amazonian region after 26 years, according to a statement from Petroperu. Moreover, Petroperu can find a partner to operate the oil block, though this process will require state approval.

Perupetro manages Peru's hydrocarbons contracts. The 192 oil lot has been out of service since February 2020, when Frontera Energy (TSX:FEC) (Toronto, Ontario) stopped operations.

Peruvian oil and gas production in June hit some of its highest levels from the past year. Oil production for June stood at 45,784 BBL/d, the second-strongest output in a year. The northern Amazonian region, where Lot 192 and some of the largest oil fields are located, accounted for almost half of Peru's output in June. The restart of Lot 192 will help Peru boost its oil production and reduce oil imports used for feedstock in the nation's refineries.

Meanwhile, Peru's natural gas production in June averaged 1.46 billion cubic feet per day, the strongest pace in a year. The energy fields in the northern Amazonian region represent almost the entirety of Peru's output. Finally, liquified natural gas (LNG) output in June stood at 83,536 BBL/d, with most of it coming from the northern Amazonian region.

Over the years, Lot 192 has been impacted by constant protests and disputes from indigenous communities. The groups have demanded better clean-up efforts for oil spills, and more protection from energy operations. Despite long-running dialogue and several agreements between the government and local populations, tensions continue to surround Lot 192 and have led to operational disruptions and unrest in the oil asset.

In addition to social and environmental problems, Lot 192 has been impacted by vandalism and violence. These incidents and the block's long-inactive status are some of the reasons why only normal oil output is expected for the next 12 months, according to Petroperu. In addition, Petroperu will face technical difficulties arising from high water output from oil production and rising production costs.

Despite the setbacks and conflicts involved with Lot 192, the restart of this energy asset offers Peru a new opportunity to increase its oil production after years of disruptions in its northern oil fields.

Talara Refinery
Meanwhile, the revamped 95,000-BBL/d Talara Refinery has begun restarting some of its units ahead of its return to normal operations. Since April, the refinery started testing its new distillation unit in an effort to gradually stabilize output. The refinery is expected to be operational in the last quarter of this year.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Project Database can read a detailed plant profile for the Talara Refinery, and click here for a list of active projects at the facility.

The Talara Refinery is in the Piura region near the Pacific Ocean, and it is Peru's second-largest downstream infrastructure, following the 117,000-BBL/d Pampilla Refinery. Projects aimed at revamping the Talara Refinery--and increasing its capacity from 65,000 to 95,000 BBL/d--started several years ago, costing Petroperu about 5 billion Peruvian soles (US$1.27 billion).

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