New PetroPeru CEO faces refining, pipeline issues

Peru's government named James Atkins, former Peruvian head of Bolivia's Equipetrol, to serve as chief executive of state-owned PetroPeru.

He replaces Luis Garcia, who resigned in March. PetroPeru also named three new members to the board.

Atkins takes over as the company works to complete a long-delayed $5.4bn upgrade of its 65,000 b/d Talara refinery and examines options for its leaky northern oil pipeline.

The Talara project, in the hands of lead contractor Tecnicas Reunidas of Spain, will increase processing capacity to 95,000 b/d and add units to facilitate the production of diesel with a maximum of 50ppm of sulfur to meet national standards. The project is 70pc complete and should be done in 2020.

The 1,000km northern pipeline faces persistent problems with communities along its jungle segments. The above-ground line has sustained17 acts of sabotage in the past three years, including two this year. Indigenous communities routinely take over installations as a way of forcing negotiations with the government on socio-economic issues. And the pipeline is often cut as a way to generate pay for clean-up operations.

The most recent incident took place on 24 April when protesters took over a pumping station in the northern Loreto region to call attention to problems with electricity supply in the area.

The line has also suffered weather-related problems.

Upstream, PetroPeru is preparing to develop acreage for the first time since its blocks were privatized in the mid-1990s. The company has partnered with regional independent GeoPark to develop block 64 in the northern jungle. GeoPark holds 75pc in the block and could begin production of around 6,000 b/d in 2020.

PetroPeru is also set to take over block 192, near the northern border with Ecuador, when the contract held by Canadian independent Frontera expires in August 2019. Block 192 produced an average of 10,000 b/d in March, the second most productive block in Peru after China's state-owned CNPC's block 10, with an average of 12,684 b/d.

Peru´s total crude production averaged 52,000 b/d in March 2018, up from 42,800 b/d a year earlier.