Peru hydrocarbons licensing authority Perupetro has awarded a two year contract to Pacific Stratus Energy Del Peru, a subsidiary of Pacific Exploration and Production, for operating the onshore Block 192 in the country's Loreto Amazonian region.
Pacific Stratus Energy Del Peru has initiated operations at the block from 30 August, which is located in the Northern Marañon Basin of Peru, beside the Peru-Ecuador international border.
The block, that is claimed to be the largest oil producing one in the country, has been in production for 40 years.
Till 2013 end, gross production for the block was estimated at 725 Million Barrels (MMbbl) with 117,000 barrels per day (bbl/d) as its peak production in 1979.
The block comprises of 17 light, medium and heavy oil fields in total, of which oil is extracted from 12 fields. It accounts for nearly 17% of the entire oil production in the country.
Current production for the block is around 12,000 bbl/d of an average 18.9(o) API oil with a water cut of 97.9%.
The firm remuneration for its services will be based on an R-factor calculation, which is expected to offer a higher percentage during initial production and will gradually lessen as its investment starts paying off.
Initial work programme at the oil block is expected to involve reactivation or work over of wells identified by Pacific Stratus which will be followed by activities subject to well and field performance in the later stage.
Pacific Exploration and Production chief executive officer Ronald Pantin said: "Pacific firmly believes that the reserves and the resource upside on this block have the potential for increased production levels.
"The application of Pacific's strong and proven expertise in heavy oil production and water handling operations should result in production upside through optimisation of current operations, re-activating wells and fields currently shut-in and future development drilling.
"As with all of our activities in all of the countries where we are working, the Company will ensure that Block 192 operations continue to be conducted with the utmost respect for the environment and the social well-being of the local communities."