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.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Maven Capital Pty Ltd (AFSL No. 418504). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Facebook
Twitter
LinkedIn