PeruPetro, the responsible government agency, has granted independent oil and gas exploration and production company Baron Oil to drill the Cuy-Z34-13-1X exploration well offshore of northwest Peru in Block Z-34.
The well is planned to be drilled in 5764ft of water to a total depth of 12,553ft. Block Z-34 is located in an undrilled deepwater basin and covers an area totaling 3713sq km. Baron’s internal estimates of gross unrisked best estimate (P50) prospective resources for the Cuy Prospect is 413 MMbbl recoverable.
The prospect is located only some 15km from an existing producing field in the shallow offshore/onshore Talara Basin, an area that has already produced 1.7 billion bo. Most of the remaining potential in this area is believed to be located in this deepwater basin.
Uruguayan-based Union Oil and Gas Group (UOGG), Baron’s partner on the block, is continuing farm-out efforts for a partner to share the drilling costs.
"Baron and UOGG have worked hard together over the past few months to produce not just the technical case for the optimum location to drill the Cuy Prospect but also a drilling, casing and mud program that will cope with the unknown pressure environment of this hitherto untested basin and the problems created by the apparent presence of gas hydrates in the upper part of the geological section,” said Malcolm Butler, CEO, Baron. “Getting PeruPetro to accept this as a viable program is a significant step forward. However, the well cannot be drilled until UOGG has brought in a partner with the financial and technical strength to actually operate in this challenging environment, a suitable dynamically-positioned drillship has been located and all necessary permits put in place."
The license remains in suspension through the force majeure clause of the production sharing contract (PSC). Baron owns a 20% carried interest in the Block Z-34 PSC, while UOGG owns the remaining 80% interest.
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