PXP Energy upbeat on affiliate’s Peru exploration project

PXP Energy Corp. yesterday said its affiliate involved in Peru’s Block Z-38 expects to be able to finally start exploration work following favorable changes in Peruvian law.

Citing a disclosure made by Karoon Gas Australia Ltd. at the Australian Stock Exchange, PXP Energy said force majeure declared on Block Z-38 has been lifted, thanks to changes to hydrocarbon laws in Peru.

Peruvian regulators granted Karoon’s application of force majeure related to Block Z-38, which became effective in 2013.

Karoon made the request as it was unable to secure a drilling unit within the timeframe set by law at that time.

At a best-case estimate, Block Z-38 is believed to be containing 1.37 billion barrels of petroleum.

PXP Energy owns 53 percent of United Kingdom-based Pitkin Petroleum Ltd., whose subsidiary Pitkin Petroleum Peru Z-38 SRL has a 25-percent participating interest in the project.

Karoon is working with its other partner, Tullow Oil Peru Ltd., to start drilling an exploration well called Marina-1 by early 2020.

“The well will test the Marina Prospect which has a best-case gross prospective contingent resource of 256 million barrels,” Karoon said.

“The block [Z-38] sits in the heart of the Tumbes Basin, adjacent to the prolific oil-producing Talara Basin, which has produced 1.7 billion barrels to date,” the Australian firm added.

Karoon also said the Tumbes Basin had a proven working petroleum system and that evidence suggests the prospects in Block Z-38 are accessing the same source rocks as the giant onshore Talara Basin fields in Peru.