Presidential meeting could accelerate key pipeline for AVD’s Peru gas play

Published at Jul 15, 2015, in Energy

High-level talks between the governments of Peru and Bolivia could see accelerated development for a major pipeline connecting Antilles Oil & Gas NL’s (ASX:AVD) onshore gas project to export terminals on the Peruvian coast.

AVD is pursing a two-pronged strategy for oil exploration, simultaneously exploring for deep water assets in the Antilles Region of South America and The Caribbean, while targeting near-term production onshore Peru.

AVD MD David Ormerod recently spoke to CommSec analyst Tom Piotrowski on the company’s plans for growth via resource discoveries in the following interview:

The company’s flagship asset in Peru is Block 105, situated in the Titicaca Basin. The company plans to bring Block 105 into production to underwrite its offshore exploration activities.

Geologic surveys show one section of Block 105 containing 29.6 million barrels in prospective resources, and the company is primed for an imminent exploration programme there.

Pipeline could hold the key for Block 105

A key attrition for AVD at Block 105 is its proximity to the producing Pirin Oil Field and its extensive network of railway and pipeline communications, including access to the South Peru Gas Pipeline project, also known as the Camisea Project (SPG).

When completed, the 1,000km long SPG will carry gas from the inland jungle region of Camisea over the Andes Mountains and into the coastal export terminals of the Peruvian coast.

AVD’s upcoming drilling programme at Block 105 should see a well sunk into an equivalent section holding the Camisea gas project’s reservoirs.

AVD plans to shoot seismic surveys over the prospective resource and the wider area in the lead up to the drilling of pinpoint targets.

This creates an opportunity for AVD to work up significant gas resources it can then feed into the SPG, whose demand is predicted to be 500MMcfg/d with a possible expansion to as much as 800MMcfg/d.

Pipeline talks could push ahead development

In a major development for the SPG, the Presidents of Peru and Bolivia met on the 23rd of June 2015 for high level talks during which the pipeline project was discussed.

Both leaders agreed to study ways that Bolivia – a landlocked nation – could gain access to the pipeline to export gas from its domestic resources industry, a move that could boost the link’s supply and accelerate its development.

The SPG is under construction now and scheduled to be completed by 2019 – but the addition of Bolivia as a possible project partner could accelerate that timetable, giving AVD access to an export link much faster as it works to develop its onshore oil and gas resources in Peru.

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