PetroTal Corp., the Peruvian focused E&P company, has announced an oil sales contract with PETROPERU S.A. (Petroperu), a state-owned company, for oil production from the Bretaña oilfield, operated 100% by PetroTal.
Commissioning of the central production facility is underway, and oil production has surpassed 10 000 bpd of oil from the Bretaña oilfield in Peru. This oil sales contract enables PetroTal to ship all oil in excess of its existing 1200 bpd sales agreement with the Iquitos refinery, through the 854 km North Peruvian Oil Pipeline, owned and operated by Petroperu. Petroperu has agreed to purchase the oil at pump station No. 1 located at Saramuro, approximately 460 km from the Bretaña oilfield. The Company will barge the oil to Saramuro at an estimated average cost of US$4.25/bbl. The oil delivered at Saramuro will be sold based on the monthly average reference price of ICE Brent minus US$4.00/bbl. When the oil is ultimately sold by Petroperu at Bayovar, PetroTal will receive a valuation adjustment based on the actual price achieved by Petroperu, whether higher or lower.
This sales contract will allow PetroTal to receive oil sales revenue earlier, allowing PetroTal to maintain strong liquidity. The oil sales contract allows the company to submit monthly invoices, rather than having to wait for the ultimate sale at Bayovar after sufficient oil volumes have been achieved for a tanker to take the oil to its final market. This oil sales contract is initially for one year and can be extended with the agreement of both parties. For Petroperu, the increased oil volumes through the pipeline will enhance economics since Petroperu will earn the previously published pipeline tariffs along with a commercialisation fee.
Manolo Zuniga, President and Chief Executive Officer, commented:
“We’re pleased that Petroperu has exhibited such confidence in oil production from the Bretaña oilfield as our good quality oil output increases. This will ensure that Petroperu has the ability to manage Peru’s expanding oil production and an adequate supply of oil for the Talara refinery expansion when complete”.
PetroTal is a publicly-traded, dual-quoted oil and gas development and production company domiciled in Calgary, Alberta, focused on the development of oil assets in Peru. PetroTal’s flagship asset is the Bretaña oilfield in Peru’s Block 95 where oil production was initiated in June 2018, six months after acquisition. Additionally, the Company has large exploration prospects and is engaged in finding a partner to drill the Osheki prospect and other leads in Block 107. The Company’s management team has significant experience in developing and exploring for oil in all of Peru’s oil producing basins and is led by a Board of Directors that is focused on safely and cost effectively developing the Bretaña oilfield.
Read the article online at: https://www.worldpipelines.com/business-news/02012020/petrotal-and-petroperu-announce-oil-sales-contract/