GMP to invest in blocks III and IV

Peruvian construction group Graña y Montero (GyM) has announced that its oil and gas subsidiary, Graña y Montero Petrolera (GMP), will invest $560 million in developing blocks III and IV in Peru’s Talara Basin over a period of 10 years.

After a licensing auction on December 12, in which GyM was the only bidder, Peruvian state licensing agency Perupetro awarded GyM a 30-year concession for the two blocks.

The contract, which will take effect in April 2015, calls for GyM to drill at least 90 wells in each block within 10 years of April 2016. GyM has already announced that it hopes to exceed this requirement, planning to drill 560 wells in the two blocks combined, 230 in block III and 330 in block IV.

The two blocks were previously held by Norwegian company Interoil on a contract from 2007 that was ended at the beginning of 2014 after arbitration with Perupetro.

It remains to be seen whether GyM will hold 100 percent of the blocks – as part of the concession, Peruvian state oil company Petroperu holds the right to take as much as a 25-percent stake in the two blocks if it chooses to do so, and has 60 days to make a decision.

GyM already hold the concession for licensing blocks I and V in Talara, producing 1,600 barrels of oil and some 170,000 cubic metres (6 mcf) of natural gas per day.