Peru to cut oil and gas royalties to 5 pct to counter price slump
By Marco Aquino
LIMA Nov 11 (Reuters) - Peru is reducing royalties on oil and gas production to about 5 percent on average from the current 20 percent in order to encourage exploration amid slumping prices, the government said Wednesday.
The smaller take should help Peru boost interest in new oil contracts that will come up for bidding soon, said Rafael Zoeger, the president of state energy agency Perupetro.
Peru has repeatedly pushed back auctioning on more than two dozen oil blocks because of a lack of interest in recent years.
"I'd rather get 5 percent on some production than 20 or 30 on none," Zoeger said at a news conference. "We want to find out how to design royalties for the current context of low prices."
Perupetro will tailor royalties for each concession, setting a lower rate for more costly and less accessible areas, he said.
A new system of royalties should be ready by the first quarter of 2016, when Perupetro plans to open bidding on at least six offshore oil blocks, Zoeger said. The auctioning of 26 oil blocks in the Amazon would follow.
Peru is a net oil importer and now produces about 58,000 barrels per day.
Zoeger added that state energy firm Petroperu will likely take control of the country's biggest oil block after Pacific Exploration and Production Corp's two-year service contract expires in 2017. Continuación...