Australian oil and gas explorer Karoon has lifted force majeure from its Block Z-38 offshore Peru, and is looking to drilling the first well at the block in early 2020.
Karoon on Friday said the company had been positively impacted by recent changes to the hydrocarbon law in Peru, which has resulted in force majeure being lifted from Block Z-38.
“Karoon has been actively working with the Peruvian authorities with this outcome in mind, and considers these changes as a step forward for exploration in Peru,” the company said.
Karoon and its new farm-in partner Tullow are working toward drilling the Marina-1 exploration well during early 2020. This will be the first well drilled in Block Z-38.
According to Karoon, the well will test the Marina Prospect which has a best case gross prospective contingent resource of 256 mmbbls at 100% interest (102 mmbbls net to Karoon).
“The block sits in the heart of the Tumbes Basin, adjacent to the prolific oil producing Talara Basin which has produced 1.7 billion bbls to date. The Tumbes Basin has a proven working petroleum system and evidence suggests the prospects in Block Z-38 are accessing the same source rocks as the giant onshore Talara Basin fields,” Karoon said.
“Tullow has a long established track record for exploration and both Karoon and Tullow recognize the high impact of the Marina-1 exploration well in opening up offshore exploration in the Tumbes Basin. As announced in the Resource Update on 8 May 2018, there is a best case gross unrisked prospective resource of 1,373 mmbbls at 100% (549 mmbbls net to Karoon) in 20 leads and prospects in the block,” Karoon said.
Block Z-38 lies 10 kilometers offshore from the coast of northern Peru, 56 kilometers west of the city of Tumbes and 39 kilometers west of Caleta Cruz. The block is in water depths ranging from 300 meters along its eastern boundary to over 3,000 meters in the west and covers an area of 4,875 square kilometers.
To remind, Tullow in January 2018 agreed to acquire a 35% interest in the offshore exploration Block Z-38, Tumbes Basin Peru through a farm-down from Karoon Gas Australia.
The terms of the agreement between Tullow and Karoon include Tullow funding 43.75% of the cost of the first exploration well, capped at $27.5 million (at 100%), beyond which Tullow will pay its 35% share. Tullow will also pay $2 million upon completion with a further $7 million payable upon declaration of commercial discovery and submission of a development plan to Perupetro. The farm-in deal is still subject to government approval.