INVESTMENT OPPORTUNITIES AND FUTURE BIDDING ROUNDS IN PERU

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1 INVESTMENT OPPORTUNITIES AND FUTURE BIDDING ROUNDS IN PERU Dr. Daniel Saba De Andrea Chairman of the Board 17th Latin Oil Week RIO DE JANEIRO 2011

2 PERÚ An attractive country to invest in E&P activities

3 PERÚ Area : 1 285,215 sq km. Population: 30 million inhabitants Urban : 70 % (Lima 30%) Rural : 28% GDP Total : MMUS$ 150,000 GDP per cápita : US$ 5,000

4 GEOGRAPHY OF PERU 3 REGIONS: Coast Andean Mountains Amazon Rainforest

5 PERU: More than 2,000 km long shore In front of the Pacific Ocean It is becoming a regional hub in the South American Pacific area.

6 GDP GROWTH Sustained economic growth during the last 10 years Growth

7 GDP GROWTH FORECAST GDP Growth is expected to increase in (%) GDP AGRICULTURE FISHING MINING AND HYDROCARBONS MANUFACTURE ELECTRICITY AND WATER CONSTRUCTION TRADE SERVICES PROD & IMPORT TAXES Ministry of Economy & Finance of Peru

8 CONTROLED INFLATION 2.3% Average during the last 10 years

9 Special conditions to attract investment in E&P hydrocarbon activities PERU

10 HC OCCURRENCE IN PERU Peru is located within one of the most prolific hydrocarbon mega trends in South America: The Sub Andean Megatrend 1.. Light Oil Areas in the Western Marañon Basin 2. Heavy Oil areas in the Eastern Marañon Basin 3. Ucayali Basin Hydrocarbon Occurrence Camisea and Adjacent condensates and gas fields Hydrocarbon producing fields with nearly 150 years of producing history 5.. Light Oil Areas in the Tumbes and Talara Basins

11 18 SEDIMENTARY BASINS REGION BASINS COAST 10 AMAZON RAINFOREST 6 INTER MOUNTAIN 2 TOTAL AREA : 83 MM ha

12 11 HC DISCOVERIES IN THE LAST 6 YEARS

13 MAIN HYDROCARBON PROVINCES MARAÑON BASIN Cumulative: 1,000 MMBOP Daily: 30,000 BOPD TALARA BASIN Cumulative: 1,500 MMBOP Daily: 44,000 BOPD 33 MMCFGD Trench UCAYALI BASIN Cumulative: 31 MMBOP 105 MMBC 0.3 TCFG Daily: 600 BOPD 85,000 BCD 1,000 MMPCFGD

14 PRODUCTION AND FORECAST er day) LIQUID HYDROCARBONS MBPD Oil NGL Natural Gas Liquids from Camisea and the last light and heavy oil discoveries will increase production within the next years.

15 PRODUCTION AND FORECAST NATURAL GAS MMCFD Petrochemical LNG Internal Market Natural Gas from Camisea produced a sustained growth in gas sales.

16 State private law company, from the Energy and Mines Sector, created in 1993 by Law N Organic Law of Hydrocarbons NEGOTIATES Manages and transfers royalties PROMOTES Subscribe Contracts MONITORS Manages contracts information

17 PERU: INSTITUTIONAL GUARANTY CONTRACT LAW Established under Article 62 of the Peruvian Constitution. Contracts between Government agencies and private investors may only be modified by agreement of the Parties. The Constitution guarantees equal treatment for domestic investments and foreign investments.

18 FRIENDLY ENVIRONMENT FOR INVESTMENT Non discriminatory treatment for the foreign investment. Guarantee private property. Investment agreements with the Government and Dispute Resolution Agreements (OPIC o MIGA). Peru is adherent to the OECD Declaration of International Investment and Multinational Enterprises.

19 COMPANIES OPERATING IN PERÚ

20 CONTRACTED AREAS

21 CONTRACTS SUBSCRIBED EXPLOITATION : 12 EXPLORATION : 120

22 CONTRACTS IN FORCE

23 INVESTMENTS E&P MM US $ 1600,0 1400,0 1200,0 1000,0 800,0 600,0 400,0 200,0 0, Total 120,4 194,3 383,1 359,6 276,8 351,3 688,2 1106,0 1493,7 1149,9 1323,6 Exploitation 108,3 163,8 351,8 347,4 232,8 254,9 551,9 855,0 1128,1 610,8 576,5 Exploration 12,1 30,5 31,3 12,2 44,0 96,4 136,3 251,0 365,6 539,1 747,1

24 BIDDING ROUNDS The Organic Law of Hydrocarbons allows PERUPETRO to carry out contracting by direct negotiation or call - tender. To achieve greater transparency in hydrocarbon contracting and competitive Royalties payment for the State, and in accordance to international market scenery, PERUPETRO opted for public tenders, under the mode of Bidding Rounds.

25 RESULTS The Bidding Round 2010 is the third process carried out by PERUPETRO, based on royalty bids and exploratory works. The number of blocks awarded in the previous bidding rounds was as follow: Companies that submitted letters of interest Companies that qualified Blocks awarded Claims and challenges of bidders 0 0 0

26 CONTRACTED AREAS As a consequence of promotion and international biddings, PERÚPETRO has 85 License Contracts in force and 14 contracts to be subscribed shortly. At present, investments are mainly focused in light and heavy oil production in the North Jungle and Natural Gas and Condensates production in Camisea and adjacent blocks. There will be an important increase of exploration investments in different areas of the country.

27 Thank you very much for your attention