Peruvian Gas Exploration

Press, Volume CVII, Issue 31522, 9 November 1967, Page 6

Peruvian Gas Exploration

(N.Z.P A.-Reuter)

LIMA (Peru).

Six years after the discovery of the Aguatiya natural gasfield in eastern Peru, new explorations are to begin in June to see if the reserves are sufficient to warrant construction of a 362-mile pipeline over the Andes to Lima, at a cost of about £32 million. The results will be keenly awaited by the Aguatiya group, a consortium headed by the Mobil Oil Corporation and made up of the Cerro de Paseo Mining Corporation, the Canadian-owned Peruvian Oils and Minerals, Ltd., the Peruvian petroleum company El Oriente, and three German companies, Deutsche Erdoel, Gewerkschaft and Wintershall A.G. The consortium is Investing rather more than £1 million to drill three new wells this year. One will be a step-out well on the same geological structure as the first gas-producing well, which lies about 31 miles north of the Central Peruvian highway, and about 434 miles from Lima, in thick jungle. The other two will be wildcat wells on untested structures at Tahuaya and Pisqui, between 18 and 36 miles north of the original well. The drilling will be done by the Parker Drilling Company, of Texas, and equipment will be flown into position by the Bristol Helicopter Company of Redhill, England. Field Estimate Present estimates of the reserves in the original structure suggest that there are about 7000 million cubic feet of gas. To make building a pipeline worth-while, the geologists will have to prove up to 20,000 million cubic feet. Mobil executives say. Even with these reserves, the field would be a dwarf beside those discovered in Holland and Algeria, which have reserves up to 30 times greater. The Betchel Corporation has produced a feasibility study on the construction of a pipeline able to deliver gas to Lima. Estimates are that if it is begun in June, 1968. it could be finished in December. 1070. The pipeline, which would

begin in thick jungle, would have to cross a 16.000 ft high pass through the Andes. For the first 100 miles it would pass through roadless country, along a path once surveyed for a proposed railway to the river port of Pucallpa, on Peru’s eastern border. Second Problem Apart from the doubt about the size of the reserves, a second question-mark hangs over the future of the pro-ject—no-one is quite sure what use can be made of the gas when it reaches Lima.

Mr Samuel Olden, president of Mobil del Peru, says that the preliminary results of a locally-produced market survey are disappointing. These results, not yet fully analysed, suggest that for the project to be viable all present users of fuel oil in the Lima metropolitan area would have to switch to gas by 1970. He said that Cerro de Pasco was interested in the gas for its ore smelters in La Oroya, but it would be impossible for the firm to bear the entire cost of the project. A further complication is the gigantic Mantaro hydroelectric project in the Central Andes, which should begin to produce power by mid-1971. Projects in hand or planned suggest that available power may well be outrunning Peru’s industrial needs. No-one had yet considered the possibility of exporting the gas, said Mr Olden. To justify the cost of liquification plants, they would have to find much more gas than envisaged at present, but if they did, Japan could be a possible market. The fact that the Aguatiya group was pressing ahead with its drilling programme was indicative of its interest in the field, said Mr Olden. Third Pipeline

The pipeline would be the third across the Andes. Bolivian oil from its fields in the eastern part of the country is already pumped nearly 500 miles to the Chilean port of Arica by the

i Gulf Oil Company and, to the ( north of Peru, the Texas t Petroleum Company has just announced that it is to build < a £17.5 million oil pipeline j from the Putumayo oilfield i over the Colombian Andes to < the Colombian Pacific port of < Tumaco. i