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Investment Opportunities in Peru: Growth Potential and Favorable Conditions

Discover Peru's vast natural resources, sustained economic growth, and attractive legal framework for investment. Learn about the country's commitment to commercial integration and its strategic location in South America. Explore Peru's exploration activities, production infrastructure, and hydrocarbon opportunities. With a thriving economy and access to multiple global markets, investing in Peru signals a promising future for economic growth and prosperity.

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Investment Opportunities in Peru: Growth Potential and Favorable Conditions

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  1. PERU Oppening to investment AAPG 2009 PERUPETRO S.A. June, 2009

  2. PRESENTATION OUTLINE • 1. PERU OVERVIEW • 2. EXPLORATION ACTIVITIES • 3. PRODUCTION AND INFRASTRUCTURE • 4. HYDROCARBON OPPORTUNITIES -NEW TARGETS.

  3. Why invest in Peru? • Vast Natural Resources: • Ores, hydrocarbons, available lands having proper climates, forests, 2 500 km of coast, hundreds of lakes, snowcapped mountains. • GDP growth: 9.3% annually (2008) • Sustained growth since 2002 and forecast above 6% annually 2009-2011. • Exports tripled in 5 years. • Investment is increasing 20% annually. • Economy committed to the commercial integration process : • Preferential access to CAN, MERCOSUR, USA and EU. • 32 agreements on investment . • Regional Hub • Third largest country in South America / 28 million inhabitants. • Located at the center of the South American Pacific Coast. • Favorable climate for investment: • Country with Investment Grade • Attractive legal framework for Foreign Direct Investment, based on freedom and equality. • First place in Latin America regarding the State receptiveness to investment (WEF). • Second place in Latin America for protecting the Foreign Direct Investment (WB). • Country risk below the Latin American average • One of the lowest inflation in Latin America and a very stable exchange rate (free). • Domestic capital market’s sound growth. • Fiscal surplus of 3.1% (2007).

  4. Access to multiple markets EFTA Russia Russia Canada European Union China USA Japan China Morocco Korea W T O India Mexico: ACE 8 CARICOM Thailand A P E C Central America Comunidad Andina Singapore MERCOSUR ACE 58 Australia Chile: ACE 38 ACE Plus South Africa New Zealand Existing agreements Signed agreements Negotiations underway Imminent negotiations Planned negotiations

  5. Investment plays an important role in the country’s Economic Growth and signals a promising future Sources: Central Reserve Bank of Peru, Ministry of Economy (MEF) and National Institute of Statistic and Information * Preliminary figures

  6. Sustained economic growth with annual forecasted average rate greater than 6% for 2009 – 2011 Source: International Monetary Fund, Central Reserve Bank of Peru and Ministry of Economy. (*) Preliminary figures (**) Estimated figures Peru World 10% 8% 6% GDP Growth (Anual growth %) 4% 9.3% 9.0% 7.6% 2% 6.7% 5.5% 5.1% 5.0% 0% 4.0% 2009** 2010** 2011** 2001 2002 2003 2004 2005 2006 2007 2008*

  7. ... in a framework of macroeconomic stability ... 2008 Average Exchange Rate: 2.92 Inflation Rate 2008: 6.7% Source: Bloomberg Source: CEPAL

  8. PERU-FRAMEWORKORGANIC LAW OF HYDROCARBON • In force since 1993 • The License Contract is a “Contract-Law”, protected by the Peruvian Constitution. Once subscribed it can only be modified by agreement between Parties (PERUPETRO and the Contractor). • The property right over hydrocarbons is transferred to the Contractor at the moment of entering into a License Contract. • Contract Term of 30 years for Oil and 40 for Natural Gas.

  9. PERU-FRAMEWORKORGANIC LAW OF HYDROCARBON • The Contractor has free availability of hydrocarbons and can export them free of taxes. • Import of goods and supplies during the Exploration Phase are exempted of taxes. • IGV (General Sales Tax) Anticipated Devolution during Exploration Phase. • State guarantees exchange and tax regimes in force at the date of entering into a Contract. • Central Bank of Reserve guarantees Companies the availability of foreign currency.

  10. EXPLORATION ACTIVITIES

  11. AREAS WITH HYDROCARBON POTENTIAL IN PERU ARE INCLUDED IN 18 SEDIMENTARY BASIN TUMBES MARANON BASIN SANTIAGO TALARA LANCONES -SECHURA BAGUA HUALLAGA TRUJILLO UCAYALI SALAVERRY LIMA ENE MADRE DE DIOS PISCO TITICACA MOLLENDO MOQUEGUA

  12. EXPLORATION ACTIVITIES HAVE CONSIDERABLY INCREASED

  13. SEISMIC DATA ACQUISITION IS HIGH…

  14. INCREASING THE NUMBER OF EXPLORATORY WELLS AND THE SUCCESS RATES SITUCHE SAN PEDRO KINTERONI

  15. PRODUCTION AND INFRAESTRUCTURE

  16. LIQUID HYDROCARBON PRODUCTION IN PERU 149,000 BPD OIL 76K NGL 73K MAINLY CAMISEA Sales of Camisea increased 50% per year since 2006 Created an important change in energy consumption Mar 09 Nov 07

  17. GAS PRODUCTION IN PERU 319 MMCFD CAMISEA 300 MMCFD Nov 2007 Mar 2009 NW OFFSHORE NW ONSHORE UCAYALI BASIN Gas Production in Camisea originated a sales with sustained growth

  18. HC PRODUCTION • 1. Talara & Tumbes Basins • Onshore • Offshore • 2. Marañon & Ucayali Basins • 3. Titicaca Basin • Abandoned Pirin Oil Field 1 Lancones 2 Sechura 2008 Discovery KINTERONI 1X 2+ TCF CAMISEA 18 TCF (GOIP) 1,000+ MMBC Trench 3 Titicaca Basin NAZCA RIDGE

  19. OIL PRODUCTION & OPEN ACREAGE ITT HEAVYOIL CONVENTIONAL OIL PRODUCTION BLOCKS 1AB & 8 2005 LIGHT OIL DISCOVERY

  20. PIPELINE • CAPACITY 200 MBPD • MARAÑON PRODUCTION • PRESENT PRODUCTION: • 40,000 BPD..... PRODUCTION & PIPELINE INFRASTRUCTURE 16” 252 Km 24 MBPD 24” 306Km 16 MBPD 36” 548 Km

  21. GAS - CONDENSATES PRODUCTION & OPEN ACREAGE 2008 GAS DISCOVERY KINTERONI GAS PRODUCTION

  22. PRODUCTION & PIPELINES INFRASTRUCTURE 18” 170Km 14” 211Km • GAS PIPELINE • CAPACITY 300MMCFD • Future upgrade (450MMCFD) • CAMISEA PRODUCTION • PRESENT PRODUCTION: • 300 MMCFD..... 10” 349Km 32” 211Km 24” 349Km

  23. UCAYALI BASIN CAMISEA AREA - NEW FIELDS & FUTURE PROJECTS KINTERONI 57 N MIPAYA PAGORENI SAN MARTIN 56 Picha 88 Urubamba CASHIRIARI 58 Mainique Gorge Kinteroni (Discovered 2007) Prospects (Next projects in 2009)

  24. UCAYALI BASINGAS & CONDENSATES IN SITU RECUPERABLES GOIS (TCF) FIELD Gas Seco (TCF) LGN (MMB) 3.1+ KINTERONI 2+ ? 3.1+ BLOCK 57 2+ ? CAMISEA FIELD DATA PLUSPETROL 0.5 MIPAYA 0.4 15 3.5 PAGORENI 2.7 180 4.0 3.1 195 BLOCK 56 5.2 4.3 300 SAN MARTIN 8.8 CASHIRIARI 6.4 320 14.0 BLOCK 88 10.7 620 18.0 TOTAL 56 & 88 13.8 815

  25. OIL & GAS DISCOVERIES IN PERU Accumulated Production Proven Reserves • As exploration activity increases, new hydrocarbon discoveries appears.

  26. HYDROCARBON OPPORTUNITIES NEW TARGETS

  27. CONTRACTED AREAS & IN COURSE PROJECTS • As a consequence of intensive promotion and international biddings 2006-2008, PERUPETRO has more than 100 contracts signed in 2009. Last signing ceremony was on April, 2009. • At present investments are mainly focused in heavy oil production in the North Jungle and Natural Gas and Condensates production in Camisea and adjacent Blocks. • An important increase of exploration investment in different areas of the country is expected in the near future.

  28. Alto Purus N.P. Next projects Urumbamba Picha wells Otishi N.P.

  29. REGIONAL HEAVY OIL DEVELOPMENT Heavy Oil Potential Zone ECUADOR BLOCK 39

  30. HEAVY OIL IN NORTH MARAÑON BASIN DEVELOPMENT OF NEW AREAS Heavy Oil Discoveries • In 1970 and 1980 • 400 MMB were discovered in Block 1-AB. • Within 400-500 million barrels discovered between 1998-2006 in Blocks 39 and • 67. • Blocks 39 and 67 partially explored. Additional reserves expected to be discovered. • Oil Production in Block 67 will start in 2011-2012.

  31. JUNE, 2004 APRIL, 2009

  32. THANK YOU VERY MUCH FOR YOUR ATTENTION! FOR FURTHER INFORMATION: www.perupetro.com.pe STAND IP 1940

  33. Despite the world financial crisis, Perú GDP growth of 4.5 % in 2009 and 7% average in the following 4 years are expected. • Increase of contracts, investment and future hydrocarbons production shall contribute to the GDP growth. • Possibilities to use natural gas in new industries like Petrochemical, will place Peru as an exporter in South America. • The execution of the Liquified Natural Gas Project will place Peru like the most important LNG exporter of the Pacific – America region. • Full force of a competitive contracting scheme, macro economic stability and legal safeguards of the country contribute to the present and future succes.

  34. Liquid Hydrocarbons Estimated Production • Production increase mainly due to heavy oil and Natural Gas Liquids.

  35. GREAT NATURAL GAS POTENTIAL Camisea and surrounding areas, Peruvian South Jungle Proven reserves of Natural Gas are 16 TCF, however the area has an additional Gas Potential (probable and possible reserves) of +35 TCF. Nowadays, Blocks 88 & 56 within Natural Gas and NGL production.

  36. TUMBES & TALARA BASINS Offshore & Onshore exploration in old and new areas • TUMBES & TALARA BASINS • Cum. Production: 1,300 MMBO • Reserves (P1+P2+P3):1,200 MMBO • Potential undiscovered hydrocarbon reserves in both basins: • UP TO 2,000 MMBO • (70% OFFSHORE)

  37. ESTIMATED PRODUCTION – NATURAL GAS SALES MMscfd • In 2004, commercial production of Camisea Natural Gas started. • In 2010, Peru to be the first exporter of LNG in the region.

  38. MERCADO GAS NATURAL SITUACIÓN FUTURA • Potencial en áreas cercanas a Camisea de aprox. 36 TCF • A través de Proinversión se viene analizando la mejor opción para la instalación de un gasoducto en la sierra central del país que beneficiará a los departamentos de Ayacucho y Junín así como un gasoducto al departamento de Ancash. • Sistema de Transporte y Distribución de Gas Natural en el Norte del País • Polos Petroquimicos Marcona e Ilo. • Proyectos relacionados con la petroquimica: • Proyecto de fabricación de UREA – CFI Industries • Proyecto de fabricación Amoniaco y Nitrato de Amonio (explosivos para minería) – Nitratos del Perú • Otros (Orica, Sk Corp., Braskem) Potential = 36 TCF

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