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Repsol Peru gas lot seen reserved for domestic use
August 27, 2009 / 2:13 AM / in 8 years

Repsol Peru gas lot seen reserved for domestic use

LIMA, Aug 26 (Reuters) - Peru’s government is expected to back a proposal on Thursday that would earmark all natural gas production from the Repsol’s lot 57 for domestic uses, according to a source close to the negotiations.

Critics have put pressure on President Alan Garcia in recent weeks to safeguard domestic gas supplies because of worries that a plan to export the fuel could contribute to shortages for Peruvians.

“The proposal ... is to include lot 57 of Repsol to supply the internal market,” the person said.

A Repsol (REP.MC) official could not be reached for comment and Peruvian government officials declined comment.

Lot 57 has about 2 trillion cubic feet of gas, according to reserve estimates.

Other pieces of the proposal, which Garcia is expected to endorse, include leaving contracts for lots 88 and 56 of the Camisea gas fields unchanged.

Repsol is part of the Camisea consortium led by Argentina’s Pluspetrol. The consortium’s lots 88 and 56 are slated to supply gas to the domestic market and also feed a liquified natural gas export facility that is being built. Its main owner is U.S.-based Hunt Oil.

“The proposal includes maintaining the contracts as they are, because otherwise serious economic losses would be caused and commercial pacts have already been established,” the source said.

The consortium says it has some 14.1 tcf of proven gas reserves that would last through 2047, though a recent study by an energy consulting firm estimated a more modest 8.79 tcf. (Reporting by Teresa Cespedes; Editing by Terry Wade, Leslie Gevirtz)

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