Peru Corvina offshore production platform sailout expected late-July

Offshore staff

HOUSTON – BPZ Energy says fabrication of the CX-15 platform for the Corvina field off Peru continues at the shipyard in China.

Final hull tube assembly is under way, with good progress on production pressure vessels and the topside decks.

Sailaway to Peru on a transport vessel should occur in late July, followed by installation of the platform by end-September 2012. Development drilling should start late this year, although necessary permits are still being processed. 

The revised total cost of the platform is $77 million, above the original estimate due to revisions for production facility design which required installation of additional equipment, and costs associated with the use of company-owned marine equipment.

BPZ says offshore seismic acquisition is around 80% complete on block Z-1. The company is contracting a second boat for seismic work in certain areas because the CGGVeritas’ Vantage vessel could not navigate restricted waters between the platforms and shore, owing to high fishing vessel traffic and unusual currents.

The revised cost of the seismic program for 2012 is estimated at $35 million, due to higher costs related to vessel standby, community affairs, marine support, and the extra boat.

Late last month, BPZ agreed to sell 49% of its 100% interest in the Z-1 license to Pacific Rubiales Energy for $150 million. This transaction should close following approvals from the Peruvian authorities.

Pacific Rubiales has also committed to carry $185 million of BPZ’s share of capital and exploratory expenditures in the block from Jan. 1, 2012, the effective date of the agreement. Thereafter, each partner will share expenditures according to its respective participating interest.

BPZ E&P will perform administrative, regulatory, government, and community-related duties while Pacific Rubiales will be technical operations manager for the block, under an operating services contract with BPZ E&P.

The Corvina field’s gas cap reinjection program, implemented during 1Q 2012, has shown positive results, BPZ adds. As a result, production has been relatively stable over the past four months. 

At Albacora, installation of gas and water reinjection equipment has been completed and the equipment was ready for reinjection start-up early this year. BPZ completed tie-ins and testing of the equipment, and is working to get a final environmental permit to commission equipment to start use of the permanent facilities at Albacora. In the meantime, the company has permission to flare gas until July.

5/14/2012

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